Monday, April 8, 2013

CEO of Scoopkit replies to TNM post on newspaper apps abandoning their own digital advertising futures

We get mail: the CEO of Scoopkit, NYC developer of replica edition apps for newspapers, which then appear under the Scoopkit name inside the App Store, has responded to this post which appeared last month – As many newspapers abandon the ad model digital publishing vendors are there to pick it back up and profit.

I am a reader of your blog and fan of your passion for our industry, especially when it comes to digital strategies.

I'm also the CEO of Scoopkit and it was great to see you mention our company in one of your posts last month. You brought up several important issues, but when you talked about Scoopkit's business model, I found that some aspects would deserve a closer look and some clarification.

Lets start with this: "new apps appear in the Apple App Store – 54 as of this morning – all appearing under the name Scoopkit, not that of the newspaper publisher".

Having been in the industry for a while we know that most publishers spent years building up their brand and are rightfully very protective about it, I would be too. When Scoopkit partners with a publisher and creates an App for one of its publications we make sure the App is published under the _publisher's_ brand name. Take "Coastal View News" as an example for a great publication brand: Readers who search for "Coastal View News" on the iTunes store, will see the Costal View News App come up as the first search results (see screenshot). The App Logo, colors, description, and everything else can branded and customized by the publisher who owns the brand.

"Scoopkit" only appears as the responsible "Developer" for the App. This is an important distinction, because it means that the Publisher remains in full control of their brand at all times, while Scoopkit's job is to take care of the technical details that come with developing, submitting and maintaining an App in dozens of App Stores on countless different devices. What I'm getting at is: Apps appear under the publishers' name and brand.

Another statement I'd like to look at is "the newspaper publisher makes nothing from the apps, nor do they get charged anything.". You are absolutely right in the latter part, the publishers do not get charged anything. Both, the publisher and Scoopkit however make a lot from the Apps: They are a great tool for publishers to regain relevance among younger demographics, service readers outside their distribution area; sales people love them to show off ads to local advertisers or sell digital ads themselves. Last but not least, App usage can be reported as digital circulation. For Scoopkit, every additional App increases our ad network's reach, makes us more attractive to national advertisers and allows us to continue to improve the user experience.

Speaking of user experience, you highlight an important aspect: "The apps, well, they are simply PDF of most broadsheet newspapers without any attempt made to make them interactive." This is a key point for us and a valuable lesson we learned from our publishing partners: Initially we worked on both, purpose built, interactive Apps and print-replica versions. Very soon however our publishing partners told us that big-budget interactive apps just weren't the best way to go for them. Here is why: Creating interactive content and re-layouting an entire newspaper for several different tablet devices is a pretty expensive exercise. It can take 5-10 man days per issue. At a rate of 4 issues a month that amounts to 1 additional FTE, a substantial cost item for the businesses we work with.

Thinking about the reader experience is equally important: We constantly ask users what they expect from a local-free-paper App and how we can improve our product.

The responses we get paint a very clear picture: Readers prefer tablet-tailored layouts for reading in-depth articles in the New York Times or the WSJ. When it comes to their community paper however, they feel more at home flicking through the familiar print layout, finding the obituaries at the same spot they have always been and looking over pages of restaurant coupons on a nice full-screen display.

Given all the above, I see a very different future than: "[...] the relationship can not last. [..] with all the revenue going to the vendor, and neither circulation or ad revenue coming in, the newspaper's days are numbered."

There are countless opportunities for publishers to create digital revenues, from obvious ones like selling premium ads (with way higher CPMs than simple web banners) to more creative approaches like coupon referrals or in-app purchases. Nobody has found the holy grail yet though and we are all still learning. This is why we emphasize partnerships. For a publisher, teaming up with a partner reduces the investment risk (or in the case of Scoopkit removes it all together).

For companies like us, working with a large number of publishers gives us the opportunity to learn a lot faster and enable everyone to succeed in monetizing digital content a lot sooner.

"Finally then, without the newspaper the vendor has no audience to sell themselves." I couldn't agree more, and thats why I believe we are in a relationship thats made to last.

Please feel free to post this reply on your website, I'm sure there are lots of opinions out there and I enjoy the discussion.

– Christian Fruehwirth, CEO, Scoopkit

1 Comment:

Konstantinos said...

I thought that nothing could be funnier than the publishers' expectation to "regain relevance among younger demographics" by rolling out replica editions.

But I literally stopped reading after this:

"Creating interactive content and re-layouting an entire newspaper for several different tablet devices is a pretty expensive exercise."

Tablet presence is, by design, meant to be a carefully curated experience; highly interactive; with powerful and unique ways of story-telling; planned AT THE SAME TIME that they start planning for print; with specific advertising models that can help drive those higher costs.

I have nothing against Scoopkit and their way of bringing content to the tablet stores. But, speaking for myself, I do not download any replica edition just to read it passively on my tablet, as this medium is designed for an enhanced experience.

I think those publishers need to speak with some digital producers as soon as possible...