This is How You Don’t Do It: New York Times Wants To Charge Small Fortune for iPad App – Maybe

There’s this friend of mine – let’s call him Tommy – who has a really thick skull. See, opportunities get presented to him almost daily, yet he turns them down for one reason or another. Recently, a big freelancing gig landed in his lap which would’ve made him some good cash. But he turned it down because he didn’t want to “cut into his free time,” which mostly consists of eating Doritos and playing Halo 2. Good times.

Steve Jobs came to the New York Times and handed them a present – make an iPad app and get some free advertising at the keynote speech where he introduces the fabled unicorn. They unveil it, and everyone oohs and aahs.

Except now, no one can figure out how to price the thing. From Valleywag comes this tale of dumbness:

On one side, a Times source explains, you have print circulation, which thinks it should control the iPad since it’s just another way to distribute the paper. They’d like to charge $20 to $30 per month for the Times‘ forthcoming iPad app, basically the product already demonstrated on stage with Steve Jobs, the source said. Why so much? Because they’re said to be afraid people will cancel the print paper if they can get the same thing on their iPad. Nevermind that iPad distribution comes with none of the paper or delivery costs associated with print, or that there’s already a free electronic edition available to subscribers who cancel.

On the other side, you have the Times‘ digital operation, which is pushing to charge $10 per month for the iPad edition and is said to be up in arms over print circulation’s pricing. The digital side will provide interactive content for the iPad no matter what happens, but does not want print circulation to have control of pricing, marketing and other facets of the product. It’s something of an uphill battle since print circ has had control of other e-editions, for example for the Kindle, which are also seen on the digital side as overpriced.

I love magazines. I’m not so much a newspaper guy, but a lot of people still involve a paper somewhere in their daily routines. Print media as a whole has been sinking slowly for the past 5 years, what with Craigslist killing off classified sales and the internet killing off newsstand sales. The way to get out of this is to monetize the web, but $240-360 a year? That’s just greedy.

This is a MAMMOTH opportunity for old media. Some people get it, some don’t. In the end, it will be interesting to see who comes out on top.

Or there’s the other option: Valleywag’s source is talking out their ass, and this is all conjecture.

Comments

  1. Good story until you got to the crude statement at the end! It really displays a lack of sensibility.

    Now, as to pricing… is $120/year reasonable? I don’t think so. Provide two versions of the app– a light one with limited access to the stories– and a full featured one that costs a chunk, say $20, with the first month free. Then price the newspaper at, say, $5 per month. The financial analysis by the Times is all off. The focus shouldn’t be on the limited number of people who will drop the hard copy paper and thus lose the Times money, but rather on the thousands of people who now read the Times on line for FREE but who will pony up for the convenience of the iPad version–which will mean lots of NEW cash coming in that they wouldn’t have received otherwise!

  2. @robinson: agree with your observations, although I wonder what happens to NYT’s advertising rates – are they still tied to print circulation? Is there a way to get an unbiased (in the eyes of advertisers) online readership count?

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