Can you make money from the iPad?

ipadHow good is the iPad? And can anyone make money from it?

We’ve had a couple of months now to use the tool and download loads of applications (or mini programs) whilst using it to surf the internet and access email.

So, how good is it? Will it make money – for anyone – and if so, who?

Let’s start with, is the iPad any good?

Well yes, I give it a B+. That is because it liberates digital books, movies and magazines from a desk and moves them onto a easy to watch portable screen where I can ‘enjoy’ reading / listening / watch digital media again.

But, I only give it a B+, and that it because if fails the beach and bath test and only just makes the bed test.

You see, the difference between a real (ie paper) book and a digital book (on a computer) is that the real book can be taken to the Bs – that is beach, bath, bed, bench, bus and, yes, the bog.

Now, the iPad is sufficiently portable to work on the bus – so great for commuters and travellers. The long battery life also supports this usage. I took mine on a 24 hour boat trip and we had fun with the games and luckily I remembered to download the latest editions of The Times and Financial Times to my iPad so I could read these on route.

The 10 hour battery life was more than enough.

The iPad also works well inside the house or office, so can be read on the sofa and, can just about be read in bed – but if you are likely to fall asleep with your nightly read you might prefer a softback book or newspaper to land on your nose.

The iPad can be used outside, especially if you can avoid very bright days, and I used it to navigate myself around Manchester, UK´s city centre using the excellent google maps (not too much risk of a bright day in Manchester).

However, where the iPad doesn’t work is on the beach. The sun is too bright, the sand too course, and whilst you worry about dropping or having it stolen the real risk is the humidity, or heaven forbid, a wave.

At the end of the day, the iPad is a beautifully designed but sensitive instrument. It is remarkably light, but still much heavier than a paperback and weighs more like a hard back.

So, it scores a B+. It is a remarkable leap forward for digital publishers and hence, it rightly creates lots of excitement.

Who will make the money?

However, the iPad is only as good as the software/ content / media / apps which you load onto it. So, the future of the iPad depends on what we fill our iPads with and whether the publishers can turn a profit.

A failure to turn a profit for publishers – or at least generate significant revenues – will turn the iPad into a desert. In otherwords, if publishers of games, books, movies, music, books or information or digital tools can’t make money, they won’t develop and so the things you can do with your beautiful iPad will be nothing.

Okay, so who will make the money? In the first instance Apple – but the success of this new medium and therefore Apple’s long term profitability will depend on users buying all the digital media they can.

Don’t forget, Apple also takes a huge 30% cut on anything sold through its istores. So, let’s take 3 major brands and see if they will make money with the iPad.

Financial Times

The FT has an excellent iPad application which is free until the end of July. When this becomes a paying product, I will subscribe. I love the ability to both see the latest data (ie like a website) but also download the current edition (to read off line, on a plane, boat or train). The business news and need to know data of the FT makes this a ‘must have’ for business people like myself. Yes, I will pay for this.

The FT iPad edition currently has a single advertiser which it has inserted into each article – so the advertising doesn’t require me to use a horrid navigation style to reach the articles I want. However, how much can the FT sell this space for? Quite a lot – but to just one advertiser?

Well, the ability to sell space to more advertisers depends on page views – do I reach more on the FT iPad than I used to on the FT website? I can’t measure this for sure – but I think the answer is yes.

The Times

The Times also has a clear iPad strategy and they can also put their online content behind a paywall which means I have to pay to read The Times one way or another. I choose to pay the iPad subscription and I’m glad I did. It is much better than an online subscription.

Each day I download that day’s edition and having read /scrolled it, then I am satisfied that I know all the important stories (as well as being able to see that Arsenal still haven’t signed a new goal keeper).

The Times’ navigation works in a different way, and it tries to force you to scroll through the pages – like flicking through the pages of a magazine – because this allows The Times to add adverts for IBM and Lloyds Bank in between the articles. I find these adverts annoying and I prefer the navigation structure of the FT – albeit that The Times will be able to measure a large increase in page views – because I am flicking through very quickly.

The other major

development is that the opinion elements of The Times has taken a much higher profile place on the iPad edition. Some of these commentators are excellent, such as the ex-editor of The Economist, and these unique pieces of content plus the overall editorial selection of The Times will keep me as a subscriber.

I am, though, less confident about The Times’ advertising model.

Rough Guides

I also downloaded the Rough Guide to Spain through Apple’s iBookstore. My advice to you: don’t!

The Rough Guide to Spain is very disappointing. Instead of a 600 page print book, it turns into 1500 pages on the iPad. I am constantly scrolling to find what I want but it all seems to be about Madrid.

I also used the search facility – to find a small spanish pueblo called ‘Cati’ and I had a series of problems. Firstly, the village was not included (but it did feature in my 10 year old Lonely Planet Guide) and secondly, the search brought up every word that included the term ‘cati’ so any page which included the word ‘communication’ was included. I search through all the results and after 10 minutes found that the book didn’t have what I wanted.

Nor did the book contain a single entry on the region of the Maestrazgo region – where I wanted to visit. This region is akin to Northumberland in the England, so is a significant omission.

All the iPad book did in this instance is demonstrate the lack of content and editorial organisation and that my 10 year old Lonely Planet guide was better. If I’d picked it up in a bookshop I would never have bought it.

So, a refund would be in order, right? Oh no, that is against Apple’s policy. So I’m stuck with a useless book that cost 15 GBP and I can’t even give it to someone else or donate to a library. Useless!

Others

Of course, the iPad offers lots of other media activities, free YouTube videos, Doodle Jump games, Checkers/ Draughts etc… and especially useful are the google maps which are massively improved for the ability to zoom and slide in and out of the maps.

So, games will work well on the iPad, but the repeat revenues will belong to the media groups.

So, the iPad winners are

Okay, so who wins? Clearly Apple do. There are enough quality products and variety that every iPad owner will enjoy the machine and keep recommending friends and colleagues to get one too.

Apple also take 30% on sales – so they don’t care who wins – so long as some companies do.

Okay, now the losers. The book publishers. These businesses face a massive increase in costs to rebuild their content to deliver value on the iPad – this is not going to be economically viable for 99% of books. A few key reference books yes – but I don’t see the Rough Guide brand surviving unless it move very quickly.

Now the survivers. The newspapers. These media products have so much to offer, great stories, unique comment, top quality photography that adding video and live feeds is a natural next step. The FT have already done this and The Times is now including video feeds from Sky.

Also, News International (owners of The Times) are plugging the iPad edition massively in their print papers.

Yes, the traffic to The Times online website has dropped 70% since the pay wall went up – but that is okay because it wasn’t generating profits anyway. Better to have 30 committed readers that advertisers want to reach than 100 that don’t really know why they are on the website.

However, the FT will do better still. The iPad is a natural business information tool and information publishing companies will be looking to deliver their unique content into the iPad.

Of course, the newspapers which close down their free online content and drive the best of their traffic to iPad subscriptions will do well as they will make money whilst also getting rid of the cost burden of maintaining free services online. However, this route works better for larger media groups that also have the news and sports videos to integrate into their iPad editions.

The losers have to be the books. And magazines will fit somewhere in between. Specialist magazines should thrive whilst smaller national newspapers will be bought up and re-purposed.

And local newspapers? It will be tough to take these loss making businesses into a successful digital format whilst beating off competitors for the jobs, cars and property advertisers that have already corrupted their business model.

So yes, the iPad does offer media a great opportunity, but it will also massively reform the media landscape.

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