Will Apple Tablet Boost Publishing Industry?

There’s a very informative story in the New York Times today about the impact the Apple tablet computer, which will be introduced on Wednesday in San Francisco, will have on creating revenue for potential media content providers. The potential though, may come with a price not only for consumers that subscribe, but for media outlets that provide their content. As the piece states:

People who have seen the tablet say Apple will market it not just as a way to read news, books and other material, but also a way for companies to charge for all that content. By marrying its famously slick software and slender designs with the iTunes payment system, Apple could help create a way for media companies to alter the economics and consumer attitudes of the digital era.

This opportunity, however, comes with a sizable catch: Steven P. Jobs.

Mr. Jobs, the chief executive, made Apple the most important distributor of music by imposing its own will on the music labels, bullying them into accepting Apple’s pricing and other terms. Apple sold lots of music, but the music labels claimed that iTunes had destroyed the concept of the album and damaged their already deteriorating bottom lines.

With the new tablet, media companies could be submitting themselves to similar pricing restrictions and sacrificing their direct relationship with customers to Apple.

“The iPhone was a harbinger,” said Trip Hawkins, a founder of Electronic Arts and now chief executive of Digital Chocolate, which makes games for cellphones. “When you have a device that is this convenient and fun for consumers to use, you can get a lot more people interested in paying for and engaging with the content. Big media companies should be all over this like a cheap suit.”

Media companies, including the New York Times, have been creating models for not only developing content in tablet formats, but  pricing models as well for the digital marketplace.

A dearth of ad sales has closed numerous publications over the past couple of years. With subscriptions down, advertisers were losing eyeballs for their products and thus placed their outreach elsewhere, notably in social media. Now, a paid subscription service delivered in a digital format that is amenable to users may be the key to luring some of these advertisers back to the tablet version of news and lifestyle publications.

Whether the media content providers can make money from the cost structure imposed, will be a key factor. As the piece points out:

Media companies may have to swallow hard before tethering their futures to any high-tech company, let alone Apple. Many publishers believe their economic health depends on finding a direct line to their customers, and it is not clear whether Apple — and other aggregators of Internet content — will allow that.

There’s no question the iPhone has had a revolutionary affect on communications. Will Apple’s new tablet create a revolution for publishers as well? That may be a question that makes or breaks an entire industry.

Tom Cosentino

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