With the Apple (NASDAQ: AAPL) Tablet, newspapers doing what they should have done: thinking about the possible impact to their business and trying to find ways to mitigate it. This comes 15 years after the industry ignored the internet and a decade after it disregarded Google (NASDAQ: GOOG). Of course, unwilling to admit its salient and severe fallibility, the newspaper folks are saying that they don't want the Tablet to destroy print the way the iPod destroyed the music industry.
The newspapers are apparently worried that circulation could plunge, driving profits through the floor and jeopardizing their abilities to operate. They are concerned that properties like the New York Times Co.'s (NYSE: NYT) Boston Globe could wind up selling for a single-digit percentage of the original purchase price.
For now, the plan seems to be to sell digital version of print products through an industrywide storefront that would allow them to bypass Apple-owned sales venues such as iTunes and the App Store. Building an alternative will add some points to margin but are likely to cost the industry a large amount of audience. So, this is probably a losing strategy -- but, it's what we've come to expect from the print industry.
The commitment to a strategy based on the original print product is clear in this approach, as it has been to all previous efforts to contend with a changing market. Print replica editions went nowhere. Holding back content from the web for exclusive print use was as successful as most newspaper industry efforts.
Newspapers have been reluctant to relinquish control to a third-party sales environment, as evidenced by the venom spewed over Amazon's (NASDAQ: AMZN) demand for a hefty percentage of newspaper sales for its Kindle device. The same dynamic would be at play with the Apple Tablet.
The good news: newspapers will keep control of their content.
The bad news: there will be a hell of a lot less content to keep control of.
Closing Bell: Dubai sends jitters throughout the market (S, BBY)
Heinz looking good after the second quarter?
Why isn't Bank of America updating its shareholders on CEO situation?
Reader Comments (Page 1 of 1)
10-02-2009 @ 12:53PM
Beltway Greg said...
See the music industry. The same thing is happening again. They keep throwing fast balls to fast ball hitters. Information distribution was such an easy business and essentially each newspaper had a local monopoly. Now they're being challenged and they aren't up to the task.
Move along nothing to see here except a dying industry.
10-02-2009 @ 3:32PM
thedude said...
Maybe I'm wrong but as far as I know there is no such thing as an Apple Tablet and last I knew Apple was denying any such product
Everyone needs a source of local news and it will be smart newpapers that adapt themselves to creating an online presence strong enough to be that source. They can easily survive on just ad revenue as current subscription costs barely cover the price of delivering the paper let alone printing and content creation
Any paper that gets proactive could easily provide content via RSS feeds (or some other iteration of subscription) including printable coupons.
Based on the fact that print media is already suffering it doesn't appear as if you are offering any real information here. Unless of course you are announcing the release of an Apple Tablet (which I repeat does not exist to my knowledge)
Now of course there are already plenty of tablet computers available (including the HP multi touch I am using right now) that will play a larger role in the future of print medias rebirth or death or shall we call it a renaisance(sp?) ?
The fact that Apple does have a strong footprint on music with it's iPod (a device which I do not nor will I ever own due to poor music quality and even worse software) is moot as their paltry 4% grasp on the computing industry and their overpriced hardware will not be a sizable threat to print media
Finally where do you get the idea the newspapers resist the idea of the Apple Tablet (vaporware?) But let us assume that it happens. People were used to taking their music with them in the form of a walkman but do you think they will opt to carry an iPod an Apple Tablet and a Notebook computer topped off with an ereader of some form ? Not this guy !
Of course kids these days are used to being loaded down with crap in over heavy backpacks so maybe they will.
10-03-2009 @ 8:46PM
kenc29 said...
Uhm, the iPod did NOT destroy the music industry. It saved the music industry which was being destroyed by piracy on P2P networks like Limewire.
What the music industry doesn't like about the iPod is that it has become the defacto 800 pound gorilla, replacing WalMart. The industry didn't like when WalMart controlled the CD market, and they don't like that Apple seems to be replacing them. The industry sees this as an opportunity lost in controlling their own destiny. That's what they don't like.
What the publishing industry is facing is something similar to what happened to music in that Google is eating the publishing industry's advertising dollars, and the internet is replacing print. This is ALREADY happening. The writing is already on the wall for newspapers. Apple hasn't even released a media tablet and we already know the print media industry is in inevitable decline. Apple's reported entry is one way to monetize the business. If the publishers have another way, then by all means they should roll out their plans. What happened in the music industry is that the publishers had no coordinated plan and Apple did. Let's hope the publishing industry has a plan, but I think it's too late. Too much information is already free. Setting up subscription services at this stage of the game is too little too late.