Subsidizing the News

In a recent post on his blog, creator of Instapaper Marco Arment writes about the unwelcome presence of ads in the mobile news experience and difference in the perception of value between physical and digital media. He singles out The New York Times as a prime example of a mobile news experience that he simply cannot accept. As it turns out, I am well qualified to comment on this subject since I engineered The Times’ iPhone and iPad news apps from design to release.

Lets address some of Marco’s points:

Most entire apps (including mine) cost $4.99 or less, once, and [The New Yorker] magazine is $4.99 for just one issue. Ignoring what content and apps “should” cost, and despite knowing that this is a very good magazine, this felt expensive.

I completely agree with Marco’s sentiment here. Digital newspapers and magazines just feel way too expensive. This is especially true for folks like me who never really bought the legacy physical versions. Are they really more expensive? No, obviously not.

In fact, digital newspapers are actually cheaper if you account for the added conveniences that they provide, such as instantaneous on-demand content delivery, high resolution photography/video, breaking news alerts, adjustable font sizes and favorite lists. There are equally as many fewer inconveniences, such as wet papers, smudged ink, dirty fingers, dead trees and garbage.

So, why do we perceive newspaper apps as less valuable than their physical versions, despite the added value? In my opinion there are two reasons. First, digital news is interpreted within the context of the Internet, where a plethora of second hand sources provide similar information for free (blogs, Twitter, etc). The other reason is simply that they are too new. Customers haven’t been taught the value of an iPad app. On the other side of that coin, publishers haven’t had enough time to refine the user experience of their apps.

Publishers have done an especially poor job of explaining why you must have ads in your news:

I don’t regret paying for Ars Premier or Consumer Reports because I get a clean, ad-free, reader-friendly experience in exchange. But I hesitate to pay for The New York Times because I know it’s still going to be full of ads…

In the case of The New York Times, your subscription or purchase price does not cover the cost of production. The remainder of that cost is subsidized through advertisements. Nothing new here.

In theory, The Times could offer a higher subscription rate in turn for a removal of the ads. (The apps could easily support this, believe me.) However the idea breaks down in practice. The advertising rates for the grey lady are based on her ability to reach a core group of affluent and loyal readers. These people would jump at the chance to pay a higher price for less ads, or even just to support the company! The remaining majority of readers that would continue to receive ads would be inconsistent, transient readers without much disposable income — and college students — who are basically worthless for luxury brand targeted advertising.

Or maybe it’s just me. I just don’t feel comfortable paying for an iPad or web publication, no matter how good it is, and then having ads shoved down my throat. It makes me feel ripped off: what did I pay for?

That’s just it. You’ve been conditioned by the free web and the ad experience is still immature and lame. Don’t feel bad about it. I struggle with the same feelings.

Read Marco’s complete post Double-dipping.

7 months ago  /  1 note