Will High News and Magazine Pricing Hurt iPad Adoption?

Will High News and Magazine Pricing Hurt iPad Adoption?
Everyone and their cousin is reporting that a subscription to theWallStreet Journal on the iPad will run around $18. Ouch. While it is certainly cheaper than the current “dead tree” , is much more than people are usually used to paying for digital content. Think about it this way, if you get the 3G iPad and a subscription to the WSJ, you’ve just added about $50 to your monthly nut. That’s not peanuts.

Moreover Engadget is reporting that when prices are announced for iPad content, “magazines to be at or near newsstand prices”.

All this raises a few thoughts/questions for me…

Familiarity Breeds Adoption…

When Steve Jobs introduced the iPad he made a big deal out of the fact that many people already have a few years of familiarity with the device thanks to the iPhone or iPod touch. It is no small thing. The learning curve with the iPad will be relatively small. That alone will give it some momentum right out of the gate.

Mix in new subscription fees and approaches however and I can;t help but wonder if this “familiarity advantage” is, to some extent, lost.

Who Is Buying…

Will High News and Magazine Pricing Hurt iPad Adoption?At $18 a month I’m not sure the WSJ is going to win over many new subscribers. I DO, however, suspect that people who already read the WSJ and get an iPad will want to subscribe. They won’t, I suspect, pay the $30 AND the $18 to get both versions. (Moreover, when people can get the online version for much much less…) The result is that the WSJ will LOSE $12 on each subscriber who converts to the iPad edition. Sure the WSJ will save on printing, materials and shipping but does that come to $12 a month? I highly doubt it. Will it help them maintain current advertisers and gain new ones? Maybe but who knows.

In other words, the SUCCESS of the WSJ iPad app may actually COST them some real dollars.

Losing The iPhone App Advantage…

Will High News and Magazine Pricing Hurt iPad Adoption?
IPhone applications are a bargain. There’s no other way to put it. When the App Store first opened there were numerous applications that were priced in the $9.99 range. Developers quickly learned that only a few applications will sell in large numbers priced at close to $10. A deflationary cycle began that brought down the average price of most applications to $.99 or a dollar 99. At this point it’s rare to find an application across $4.95 let alone $9.99. In applications that cost more than that are few and far between. (Although the few that I have purchased that higher prices are well worth it.)

While I feel for developers, after all this certainly makes it a challenge to earn a living creating apps, I also believe that it’s one of the key factors that has played into the rapid adoption of the iPhone and iPod touch. Knowing that you can get just about anything on the iPhone for free or for under two dollars is a great incentive to having one or the other. If applications for the new device cost significantly more I can’t imagine it won’t have some impact on application sales numbers and perhaps even sales of the device itself. Bear in mind that the people who have pre-ordered the device are, by and large, early adopters. The market isn’t made by early adopters will buy a device such as this going mainstream. If applications cost 15 or $20 per item, if newspaper subscriptions cost an additional $20 per month, and it magazines cost exactly the same as they do on the newsstand would take some of the wind out of the iPad’s sails? I think so.

Time will tell but something tells me that a better way to go would be for developers and content providers to keep prices low and try to go for volume. If today’s report is accurate, however, that’s not what we’ll see… at least at first. And in the long run that could be a problem.

Yes, this is new territory and the pricing of apps for the iPad will have to be fluid until developers and content providers figure out what the market will accept but starting high? We’ll see if this is the right call soon enough…


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About the Author

Dan Cohen
Having a father who was heavily involved in early laser and fiber-optical research, Dan grew up surrounded by technology and gadgets. Dan’s father brought home one of the very first video games when he was young and Dan remembers seeing a “pre-release” touchtone phone. (When he asked his father what the “#” and “*” buttons were his dad said, “Some day, far in the future, we’ll have some use for them.”) Technology seemed to be in Dan’s blood but at some point he took a different path and ended up in the clergy. His passion for technology and gadgets never left him. Dan is married to Raina Goldberg who is also an avid user of Apple products. They live in New Jersey with their golden doodle Nava.

1 Comment on "Will High News and Magazine Pricing Hurt iPad Adoption?"

  1. I’d be willing to pay $18/*year*, but certainly not $18/*month*. That’s highway robbery in the online world. It sounds to me like the WSJ is simply trying to move the online world *back* to a pay-wall model, and preferably at the highest price they possibly can. Doug predicts: epic fail.

    I’m also willing to pay a reasonable fee to avoid having to look at ads and pop-ups–that’s what I get right now with my subscription to Salon.com. But again, Salon charges something like $40/*year*. I can’t speak for anyone else, but in the last couple of years I’ve been busily cutting down on my monthly stuff to save money; I sure ain’t adding anything back *in* unless absolutely necessary.

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