[Why are publishers abandoning apps and betting on the Web? VisionMobile Senior Analyst Andreas Pappas looks into the flight of magazine publishers from native iOS apps to web-based platforms]
The Story
When the iPad first appeared on the market, publishers immediately saw its potential as a media-consumption device. Indeed they were right: iPad (and tablet) users are more likely to buy content than smartphone users. What they were not right about though was that native apps were the right vehicle to break into this market. A number of high-profile publishers have been recently abandoning native apps in favour of the mobile web. Among these are the Financial Times which moved to mobile web last year and MIT Technology Review magazine which is migrating this year. These moves come after investing significant time & money in developing native apps, and seeing their high-expectations failing to materialise.
Native apps are not for everyone
Publishers flocked to the iPad thinking that developing and maintaining a native app would be quick, and cost-effective. The reality has been far from this: content providers can rarely support in-house app-development, resorting to expensive outsourced development. They often struggle to support the number of different formats for their content: a version for the web, for the iPad, landscape for the iPad, for Android, and one for small screens. Mobile web offers a lower-cost alternative that can better leverage in-house resources and minimise device & screen fragmentation effects, allowing publishers to reach much further at a lower cost. However, native solutions do exist: native platforms such as Mag+ are purpose built publishing services that lack in flexibility but have a significant cost advantage compared to proprietary native apps.
Apple’s gatekeeping function is not always welcome
Apple’s role as the gatekeeper in the tablet market affords it considerable bargaining power against publishers. Apple has been leveraging this power to retain control of user data and the billing relationship, maintaining the 30% revenue cut on content purchased on their platform. The move to Newsstand, Apple’s separate distribution channel for publishers, brought some concessions on Apple’s part: they allowed consumers to opt-in for sharing their data with publishers, allowed subscription-based purchases and avoided double-charging for content already purchased through the publisher on independent platforms (e.g web). Nonetheless, the 30% revenue cut still hurts publishers as their profit margins are often much thinner than this rate. As a result some publishers have to either sell Newsstand content at a loss or charge more than they do on other platforms. If their business can absorb the loss, and benefit nonetheless, then it makes sense for them to continue offering their products through Apple’s store. However, as the cases of FT and MIT indicate, this is not always the case and other solutions should be sought.
The way users consume content has changed
Aggregator services such as Flipboard and Longform are changing the way users consume content. In such an environment publishers struggle to engage users in the way that print publications did, i.e. in reading an issue cover-to-cover. In addition, publishers often cannibalise their content by offering it on a number of platforms, most commonly on the web, and quite often for free, or at least cheaper as in the case of Wired magazine. This dilutes the value proposition for consumers: why pay for the native iPad app when I can get it on the web, which I can also access on the iPad, in some cases at lower or no cost. While native apps can probably provide a better, customised and personalised user experience than web apps, the difference rarely justifies the added cost, but most importantly does not justify the price premium.
– Andreas Pappas Looking for more insights? Check out our Mobile Insider series; each issue delves into a single trend and strips it down to its essential components, giving a full report in an easy-to-digest, 5-page format.
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