Design Planning

Last week, Apple made a policy revision to the App Store that will now allow developers to sell additional content through free apps. This change may seem subtle to the casual observer, but as Brian Chen of Wired points out, this seemingly minor change actually points the way to Apple’s broader potential to save the newspaper and publishing industries:

Picture a free magazine app that offers one sample issue and the ability to purchase future issues afterward. Or a newspaper app that only displays text articles with pictures, but paying a fee within the app unlocks an entire new digital experience packed with music and video. This is an example of the “freemium” model that Wired magazine’s Chris Anderson explains in his book Free . . . It’s plausible to imagine that a freemium strategy would be much more effective through a tablet app than a website. If the tablet is indeed designed like a 10-inch iPod Touch or iPhone, as insiders have described it, then publishers developing apps will be able to take advantage of features such as the accelerometer, GPS, live video streaming and multitouch to innovate the way they engage with their audience — and, ultimately, persuade them to pay.

As I’ve said in the past, freemium and content convergence are Apple’s doorways into redefining the print industry while simultaneously giving the tablet form factor a unique place in people’s lives (well beyond what the Kindle and Sony Reader have achieved). This is another great example of Apple’s platform thinking at work — they are poised to create new economics for the newspaper and print industries through a retail, distribution, and hardware ecosystem. Such an ecosystem certainly makes Microsoft’s Courier tablet demo look like a lonely piece of hardware.

But this much is obvious.

What has yet to be seen is whether newspapers and publishers can complete the picture with innovative content partnerships and build sustainable business models for the tablet ecosystem. Simply going the route of the Dallas Morning News and Amazon revenue-sharing model will be unsustainable for newspapers. Remember what James Moroney, publisher of the Dallas Morning News said in his testimony to Congress about the fate of the newspaper industry (quoted by Malcolm Gladwell in his review of Chris Anderson’s Free):

They [Amazon] want seventy per cent of the subscription revenue, I get thirty per cent, they get seventy per cent. On top of that, they have said we get the right to republish your intellectual property to any portable device.

And herein lies the most difficult part of getting this right. With music and film, Apple’s  iTunes created a new marketplace and service ecosystem around content that is in ever-increasing demand. That is to say, music and movies didn’t have to be reinvented to develop the iTunes experience — they just needed to be digitally rendered, distributed and delivered. But in the case of newspapers and publishers, the experience needs to be entirely re-imagined before people are willing to pay a premium.

Otherwise, we’ll just continue to consume the smorgasbord of free content at our fingertips.