The company that owns Philadelphia’s two daily newspapers, the Philadelphia Inquirer and the Philadelphia Daily News, last week announced a pilot program that looks to me like a peek at the future of newspapers: buy a digital subscription and get an Android tablet computer at half price.
Here’s what you get: An inexpensive tablet computer (for about, say, $200) already loaded with the newspapers’ apps and links to the website of the two papers, Philly.com.
Here’s what the newspapers hope they get: more revenue from digital subscriptions priced at less than $100 a year, an opportunity to keep readers as even readers abandon their ink-on-paper subscriptions, and a whole lot of data on what consumers are clicking on and reading on the tablet.
At some point in the next few years, tablet prices will come down far enough — you know they will — that it will make economic sense for newspapers to give away tablet computers to anyone who buys a digital subscription.
In fact, it may be imperative. A survey by Cambridge’s Forrester Research in 2010 found that almost a full one-third of tablet owners read print newspapers less often. (Sixty percent reported no change in their newspaper reading habits, while 8 percent — this is odd and interesting — said they read print newspapers more often since they bought their tablet.)
The Philadelphia papers’ strategy, writes Jeff Sonderman of The Poynter Institute, makes sense because “subsidizing a reader’s first tablet, with your news apps baked in, lets you shape that transition in a way that keeps your media brand in their daily habits.”
The Apple iPad debuted only 18 months ago, and since then Apple has sold somewhere between 5 million and 8 million iPads. Now everybody’s in the tablet market — Samsung, Sony, Levono, Dell, HP, T-Mobile, BlackBerry, Asus.
The basic model of the first iPad sold for $499. Samsung now offers a Wi-Fi equipped Android tablet for $349.
I certainly am no expert on the costs of computer manufacturing or the ways of retail pricing, but, for comparison’s sake, look at the retail price of Apple’s iPod over the past 10 years.
- Oct 2001 5GB iPod: $399
- July 2011 8GB iPod Nano: $149
That’s a reduction in price of nearly two-thirds over 10 years. If Samsung’s engineers are able to cut the price of good tablet computer in half over the four of five years, to $175, and newspapers can get them at wholesale prices, then the smart economic move for newspapers would be to give the tablets away and make money on subscription and advertising.
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