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January 27, 2010

Apple Tablet: Will It Rule Media Like iTunes Rules Music?
By David Sims
TMCnet Contributing Editor

You have to admire the almost touching pathos of The New York Times reporting

'Almost all media companies have run aground in the Internet Age as they gave away their print and video content on the Web and watched paying customers drift away as a result,' the Times writes, looking over its own shoulder.

It's a problem nobody's been able to crack yet. Since there's so much good free content available online, people are unwilling to pay for it just to get a brand name vendor, except in limited instances, such as The Wall Street Journal's 'pay wall' - cordoning off content available only to subscribers. As a consequence, the content has become the bait to lure eyeballs to the site to view advertising.

Case in point: Long Island newspaper Newsday, recently purchased by the Dolan family for an upwards of $650 million, in late October, offered complete access to its online content for $5 a week, or $260 a year. 

Three months later, according to The New York Observer, a grand total of 35 people have accepted the offer. Thirty-five. And the Web site redesign and relaunch alone cost the Dolans $4 million: "With those 35 people, they've grossed about $9,000." It does not bode well as a model for monetizing the industry, let's put it that way.

Granted, that's James Dolan, the man currently turning The New York Knicks into a national punchline, a man whose business sense tells him paying Stephon Marbury millions of dollars to sit and watch Knicks games is a good deal. But competent business people are having trouble too. The New York Observer, a grand total of 35 people have accepted the offer. Thirty-five. And the Web site redesign and relaunch alone cost the Dolans $4 million: 'With those 35 people, they've grossed about $9,000.' It does not bode well as a model for monetizing the industry, let's put it that way. oh so hopefully that the new Apple (News - Alert) Tablet will give dying Old Media dinosaurs like, ahem, The New York Times, a way to monetize online content.

In fact, the Times itself, run by the only slightly more business-savvy Arthur Sulzberger Jr., seems to be heading towards a metered pay model for its content, mindful of the debacle of the now-abandoned pay wall approach of TimesSelect, which charged for 'premium' content including columnists Tom Friedman and Maureen Dowd, who saw a dramatic fall-off in online readership as a result.

With the new Apple tablet, the Times says, 'marrying its famously slick software and slender designs with the iTunes payment system... media companies could be submitting themselves to similar pricing restrictions' as apply on iTunes, and 'sacrificing their direct relationship with customers to Apple.'

The Times is also reporting as fact, not merely rumor, that the Apple tablet 'will run all the applications of the iPhone (News - Alert) and iPod Touch, have a persistent wireless connection over 3G cellphone networks and Wi-Fi, and will be built with a 10-inch color display, allowing newspapers, magazines and book publishers to deliver their products with an eye to the design that had grabbed readers in print.'

What will happen? Nobody knows, but Thomas J. Wallace, editorial director of Condé Nast tells the Times that “Apple upended the smartphone market with the introduction of the iPhone, and it’s likely that they will, if they enter the tablet market, lead the pace there. 2010 is going to be the year of the tablet.”

David Sims is a contributing editor for TMCnet. To read more of David’s articles, please visit his columnist page. He also blogs for TMCnet here.

Edited by Stefania Viscusi