Posted in Concepts, Marketing
6/05 2011

The Pointlessness of Paid News Applications


Britain’s The Daily Telegraph has just released its new iPad application, that has gone from offering a few free leading articles to offering completely chargeable content.

Now, I have nothing against paid content, great content  and journalism costs money to create and if it’s above average in quality, then I’m willing to pay.

However, The Telegraph believes that its iPad application is synonmous with a pre-internet era printed newspaper, and is charging accordingly $1.99 per day. Per day! Or $16.99 per month.

This model only makes sense if you consume content from one location, that’s it that’s all. However, with the internet and a zero marginal cost of publishing, that’s not how most people consume content. They’ll read a few articles per day from each source.

Hence, my average daily cost per article from The Telegraph would be around 40 cents if I were to read 5 articles a day. That’s a lot to pay per article! Pre-Internet, if you were to read 15-20% of one newspaper, roughly, 20-30 articles, you may be paying the equivalent of 10 cents per article. If you remember that the marginal cost of delivering the article is much higher due to distribution and newsprint costs, then the equivalent article today should be valued at between 2 and 5 cents.

So, if the The Telegraph wants to charge, this is what is should do.

1. Create a value per article. This can vary based on the contents of the article. An in-depth report with multi-media graphics may be 5-10 cents whilst a standard article may be 2 cents.

2. Have readers by credits through in-app purchase.

3. Suggest to readers that subscription might be better if they are heavy readers.

4. Offer a few articles per day for free, as news is an experience good, and you need to read it to know if you like the style of the paper.

There is another way to look at iPad newspapers. If you suggest that people should pay because the iPad app experience is so much better than the web experience, but the content is no better or doesn’t merit being charged for, then you should charge for that experience. Make the iPad app payable in the app store. Charge $5 one time, one off. The value is in the reading medium, not in the content.