4 questions about Apple's new News app, answered
Apple on Monday announced a new news reading app with a simple name, News.
Here are key questions about the app and what it may mean for media organizations, including partners such as The New York Times, ESPN, Bloomberg and The Atlantic.
Given the ubiquity of iPhones and iPads in the market, will it change the way journalism is delivered or consumed?
Alan Mutter, a newspaper analyst in San Francisco, notes how the typical news site now gets most of its traffic from search engine referrals, as well as Facebook, Twitter, Instagram and other social channels.
Additional aggregation services raise the possibility that existing news sites will get less and less traffic from consumers who go directly to them or their apps, he says.
Ken Doctor, a media analyst in Santa Cruz, California, points to the changes in consumption represented by the Apple deal as an ongoing journey, not a cliff we're suddenly vaulting over. It's a "dual world where readers will continue to read on big news brands — new and old — and will read on other distribution platforms like Facebook and Apple."
Will this change how news organizations present news to readers? Apple's Newsstand had let a reader consume a newspaper or magazine piece in the same format as the original version.
Doctor says the big change confronting everybody is obviously smartphone delivery for news apps. If 50 percent of news is now accessed on smart phones, that will rise to 75 percent within three years. So, yes, a small screen will dictate different presentation of news. "All reading of news will have to conform."
Mutter underscores that "the way people consume news already has changed profoundly. People use digital vs. print. People timeshift TV consumption vs. parking themselves in front of the set at a particular time."
Yes, consumption will change for the same reasons that weekday print circulation of newspapers dropped by 50 percent in just a decade and will likely accelerate as an older print readership dies off. Mutter notes that the median age of a New York Times print reader is 60 vs. 37 for the U.S. population as a whole.
Although Bloomberg did not comment for this article, Bloomberg Media CEO Justin Smith said in a blog post that the app "promises a rich experience that combines the immersive design of a print magazine and the interactivity of digital media."
Will this help or hurt readership of the outlets cutting deals with Apple, such as The New York Times, The Atlantic and The Economist?
Mutter says it will certainly broaden consumption of articles among a growing group of "casual readers." But, he believes, "incidental readers don’t have the same value as someone who subscribes to a newspaper or website."
So, he wonders, how long can a publisher afford to "invest heavily in content when they are picking up dimes from partners like Facebook and Apple when they used to collect dollars directly from local advertisers?"
"To be blunt, I don’t see the business model yet for sustaining journalism as we know it in the future. Partnering with the big digital platforms may be palliative, but it is not a cure for what ails the publishing industry."
Doctor sees the Apple partnership as a net plus for media outlets and notes that executives at the bigger news brands are already harnessing analytics very well. They'll track minute by minute what the impact will be.
"Of course, the question is one of cannibalization and what they will lose. But analytics tell you what you gain in readership and advertising as opposed to cannibalization and loss of readers on your own site. But I think this will be a net plus for smart publishers."
What does this mean for Flipboard?
Mutter has substantial experience with media startups and believes it's bad news for Flipboard, which he says is backed by $160 million in venture capital and may not have a buyer. In his mind, it just can't compete with Facebook, Apple and Google as they "invest heavily in algorithms and platforms designed to predict and customize content delivery to the vast audiences they touch every waking minute of every day."
What he calls "the Big Three" are improving at executing what Flipboard created. That could mean Flipboard is threatened with irrelevance.
"That’s why we say: You can tell the pioneers in Silicon Valley because they have the arrows in their backs."
Flipboard Chief Executive Officer Mike McCue told Bloomberg he's not worried about the competition and has known Apple was coming.
Doctor concedes that Flipboard once looked revolutionary. It turns out, he says, that it was "an intriguing development."
"It must now find its next place as we go forward in digital distribution," says Doctor.
As for the economics of it all, publishers will keep 100 percent of the advertising they sell within the app.