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% 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% 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% will pay, but if the number was 25%, 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.

8 thoughts on “Why Apple’s iPad won’t save newspapers

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

    Why? Maybe not in the future. Apple claims it sold 300k iPads the first day, so in the years to come it surely will sell much more than 1M…and then there will be competition running Win7 or Android, where the digital newspaper could be delivered as well.

    But overall, I don’t feel any savior is needed – newspapers just continue to exist, since there always will be a need of a newspaper.

  2. @Peter – Why? Because the total number of people with iPads will always be a lower number than the total number of people who can currently read print newspapers.

  3. “Why? Because the total number of people with iPads will always be a lower number than the total number of people who can currently read print newspapers.”

    10 years ago you could have said the same thing about mobile phones. Now I think kids are more likely to own and use a phone than they are going to be able to read and write! 10 years may be too long for newspapers to wait though.

  4. @Craig – Two points.

    First mobile phones are generic, the iPad is a specific brand. No single phone brand has anything like 100% market share. That’s equally unlikely to happen with tablets.

    Second, mobile phone penetration is high in the first world, but not on the third world. But even though there are more mobiles than people in rich countries there are still many people who don’t have one.

    So, even if we accept all tablets as being equal, it’s still unlikely 100% of people who can read will own one in the immediate future.

  5. I dont understand your reference to the 3rd world… and why it is relevant to your point…?

    “There are many people who dont have a mobile phone”. With respect, these people will be dead / consumer irrelevant in 5-10 years.

    The masses – the future, have mobiles + want to use more convenient, more relevant, more timely information devices.

    Stop getting so caught up on one device. THe ipad isnt about the ipad – its about the new breed of device.

    Your arguement that the future will want the “previlege” to go out of the way of their busy lives, buy something bulky and physical, and pay to read out of date news is not likely.

    Yes the ipad wont save newspapers, but the ipad isnt about the “iPad”.

  6. @Nathan – It’s simple numbers. However you cut it the audience for iPad delivered newspapers will be smaller than the audience for printed newspapers.

    In the immediate future, that audience will much smaller in every market. In poor countries, that audience will be much smaller for a lot longer.

    Mobile phone penetration might well be more than 100% in rich countries. In New Zealand there are around 120 active mobile phones for every 100 citizens. But that doesn’t mean every citizen has a mobile phone.

    Even if we take old people and young children out of the equation, the total proportion of mobile phone owners is still less than 100% of the total population. It might not be much less than 100%, but it less.

    Print newspapers can be read by 100% of the literate population. Electronic newspapers can be read by some number less than 100% of the literate population.

    That’s by definition a smaller audience.

  7. Bill, I think it’s foolish to make a future prediction, based off current numbers.

    Print newspapers, could be read by 100% of the literate population: BUT: much less than 100% have the desire to want the limited accessibility + usefulness of it. This will only reduce in the future with better substitute products.

    Yes, electronic newspapers can CURRENTLY be read by less than 100%. But this will only increase in the future as technology improves.

    Using your logic, you could make the arguement:

    “AUSTRALIA WILL NEVER BEAT THE USA IN TENNIS, BECAUASE THE USA HAS A LARGER POPULATION”….

    • @Nathan – I think we’re getting sidetracked.

      I’m saying even if everyone had an iPad, it still wouldn’t save the newspaper business. At least not if publishers like Rupert Murdoch persist with their current business model.

      You want to debate the even if part.

      To me it’s self-evident that not every person will own an iPad. Not tomorrow, not five years from now, not even ten years from now. Just as 25 years or more since the first mobiles appear not everyone owns one.

      But let’s get past that and agree to differ.

      Publishers still have many obstacles before they have a viable business model for online news.

      Convincing the population to buy iPads (or similar) is only one step in the process.

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