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Latest Apple product creates anticipation in newspaper industry

Monday, January 25, 2010 | 12:01 a.m. CST; updated 8:43 p.m. CST, Wednesday, January 27, 2010

COLUMBIA–What Apple will unveil Wednesday could shift the future of e-reading and be a tool to increase the viability of newspapers.

Consumers and publishers will keep a close eye on Apple when it reveals its newest product, unofficially called the Apple Tablet or the iSlate by those speculating on the release. Apple has kept quiet other than announcing the presentation.

“All the talk about an Apple tablet or e-reader is pure speculation right now,” said Roger Fidler, program director for digital publishing at the Reynolds Journalism Institute. “We won’t know what the new device is until Wednesday.”

This hasn’t stopped the speculation on the potential the tablet computer holds. Sean Reily, a fellow at the journalism institute this year, said Apple’s previous success has given the product a lot of attention.

Apple, whose Macbooks are strongly recommended for journalism students by the Missouri School of Journalism, has built its reputation with products such as the iPod and the iPhone, devices viewed as revolutionary at the time of their respective releases.

While some consumers are anticipating the product, another interested party is newspaper publishers, who in recent years have been struggling with declining subscription rates, declining advertising revenue and sometimes bankruptcy.

Reily, who is studying business models that newspapers can implement for e-readers, said the tablet holds potential for an effective way of producing the news.

“E-readers bring the editor’s decision on what to read just like a newspaper,” Reily said. “Someone curates the content and provides it to you. It is very different than the dot-com experience where you choose your content.”

The Amazon Kindle, the leader in e-reader device sales, currently sells subscriptions for its Kindle edition of newspapers and magazines worldwide, including The New York Times, USA Today, Time, Newsweek and The Economist.

Although only the major market newspapers currently have e-reader editions, Fidler said smaller newspapers are likely to develop e-reader editions when it becomes “economical and profitable for these papers to produce them.”

The Kindle edition of these publications consists of a single column of text and a few photos. The Apple Tablet is rumored to be a full-color touch screen device with the ability to deliver bigger files through Wi-Fi, allowing for a richer display.

The heart of the business model for newspapers ­— revenue from subscriptions and advertising — would be the same in the transition from print to e-readers.

“With e-readers and tablets, newspaper publishers are assuming that people will be willing to pay for the convenience of having a more print-like package of news and advertising automatically delivered to the devices,” Fidler said.

The economic health of newspapers in the future appears to be tied to charging for its digital content, which most newspapers currently place online for free.

The fee could be resisted by customers at first. Reily said this is a comparable situation to a time when watching TV was free for everyone.

“If you would have told my dad when I was a kid you would have to pay for TV content, he would have thought you were crazy,” Reily said.

Over time, however, paying for cable and satellite TV became commonplace. Reily is among those who think that eventually, paying for online news content will be the standard.

Reily described the current situation as critical, saying companies need to develop a new way for selling newspapers other than by paper copies.

“We know print is shrinking fast,” Reily said. “We don’t make enough money back on ads online, where the content is free. Companies are going out of business if they don't find new ways to monetize the cost of creating their content. The company I work for is in bankruptcy.”

The Los Angeles Times, for whom Reily works, is owned by The Tribune Company, which filed for Chapter 11 Bankruptcy in December 2008. Newspapers big and small are struggling and need a change in fortune.

Even with the anticipated positive effects the tablet and similar future products, there is also a fear of failure that lurks underneath it all.

“If you can’t bring revenue for the e-readers, the people who created the content will go out of business,” Reily said.

Another fear, Fidler said, is that newspaper publishers could suffer the same fate that music companies experienced when the rise of digital sales through iTunes and other online music stores led to a decline in profit.


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Comments

michael salmons January 25, 2010 | 10:31 a.m.

Only if it works well, allows access to free networks and is reasonably priced. Apple stuff traditionally has a premium price. Granted, in some cases the hardware is very nice, but if they want this to be a tool for the masses, they will have to take the Kindle and Nook head on price and feature wise.

Really, the sensible thing to do would be for media companies to get on board asap and pony up to bring the price down below the kindle, throwing in trial subscriptions with the deal. As long as the iSlate does something useful beyond reading papers and books (like websurfing, productivity and graphics apps for which Apple already has a reputation to protect), I would be one of those wiggy people waiting in line for it at midnight the night before. If not, I and most people will be moderately interested. We'll see if "moderate"'s good enough for Apple.

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