Why Apple’s iPad won’t save newspapers

Rupert Murdoch says Apple’s iPad is a “potential saviour of newspapers“. His wishful thinking doesn’t stand close scrutiny.

On the plus side moving to the iPad will save publishers the cost of printing on mashed dead trees, wrapping and distributing.

Apple’s 30 percent revenue cut is the same as the mark-up made by newsagents and other physical outlets selling newspapers – so no savings there.

Editorial costs will remain the same. So the savings will be relatively small.

However you cut it, fewer readers will buy a digital newspaper than a printed newspaper.

You don’t need special equipment to read a printed newspaper. Apple may have sold a million iPads, but that’s not even 0.1 percent of the potential newspaper readership.

Even if this obstacle was overcome, fewer readers will pay for digital subscriptions than print subscriptions. The evidence suggests only 5 percent will pay, but if the number was 25 percent, copy sales revenue would still fall.

Fewer readers means less advertising revenue.

And there will fewer readers per subscription. Readers pass printed newspapers on to other readers. Copy protection makes is harder to pass-on a digital newspaper.

This means still less advertising revenue.

True, iPad readers, who are identifiable are worth more to advertisers than unidentifiable print newspaper readers.

We’ll put aside for now the idea that free online newspapers will get the lion’s share of advertising.

The numbers don’t stack up to support the idea that the iPad will save the newspaper industry.

Apple’s iPad is the first of a wave of products which will rebuild the media landscape. They’ll change media, but they are not the panacea Rupert Murdoch says they are.