Can the $99 iPhone save newspapers?

Communciator TOS by ted.sali

I am not a card-carrying member of the Steve Jobs Cult by any means, but the smug “Mac vs. PC” commercials aside, when it comes to innovation and marketing savvy, I bow before Apple’s altar.

Yesterday’s announcement of the “new” iPhone 3G S wasn’t greeted very warmly by some of its hardcore fan base (“Apple took a card out of the automobile manufacturer promo catalog… Say it’s new for 2009 by providing a minor feature upgrade!” — Geoff Livingston) but what caught my attention was that, effective yesterday, the standard iPhone 3G that everyone raves about is now only $99.

That’s huge on a number of levels, as many of the hardcore early adopters will bite the bullet and upgrade to the 3G S, but more importantly, there will likely be a flood of new customers jumping on the now very affordable 3G bandwagon. Despite being a loyal Verizon Wireless customer and Blackberry fan, I’m even considering it myself!

Particularly interesting to me, though, was the potential affect this could have on newspapers, print and digital, as Nieman Labs’ intentionally provocative tweet highlighted: “The race between e-readers and smartphones is over.”

It’s somewhat hyperbolic, of course — ereaders are a much better platform for long-form text — but as the actual article points out, almost everyone has a cell phone nowadays, and smart phone users are voracious consumers of news:

• The U.S. has 270.3 million wireless subscribers, which is the equivalent of 87 percent of the entire population.  At the end of 2005 the penetration was just 69 percent.  It looks like only centenarians and some of the sub-teen population are still cellphone-less.
• Nielsen says there are 53.4 million mobile internet users in the U.S. (this would be about 20 percent of the 270.3 million wireless subscribers reported above, but undoubtedly the fraction is growing).
• Of these, 22.3 million are using their mobile phone to access news.
• “App phone users” — those smart-phone users who have downloaded apps — report spending an average of two hours a day using their phone; 40 percent of that time is devoted to app use; app users interact with their phone an average of 30 times a day.

The Kindle DX was announced amidst a lot of buzz that it would be the digital savior of newspapers, but the flawed plan that was announced by the participating newspapers positioned it to be little more than an incremental revenue stream. Never mind Amazon’s real target is the academic market, looking to replace expensive textbooks with… an expensive digital alternative; the newspaper angle is gravy, and felt more like a juke move for PR purposes.

Smartphones are a more likely “savior” for news organizations, traditional and new media, partly because of the much larger user base, and partly because of more compatible usage patterns. News is typically consumed in small doses, on the run, in between other activities; nowadays, on the morning commute, there are just as many noses buried in smartphone screens as there are in inky broadsheets.

The keys to success will be mobile-optimized websites featuring highly curated, timely and targeted content, complemented by branded, multi-platform apps that offer an integrated advertising presence for a single sponsor.

I’d pay $3-$5 for a customizable, lightly ad-supported New York Times app; and I’d even consider a free app + low monthly subscription rate from them as well. If I ran in political circles (no pun intended), a similar option for Politico would be appealing. An ESPN app that fully integrated their fantasy leagues and offered localized news is another possible example.

ETA: Just saw this post on min, “Apple Keeps the Mobile Mojo Moving“, that makes an interesting point:

Apple is now allowing publishers to charge for content within the app and according to any model they like. In essence, this clears the way for subscriber plans and for incremental content upgrades… Also important for publishers will be Apple’s new content push notification system. Now applications can inform you through a unified alert system that new content is ready for you to pull into an app. Call it semi-push.

This is a huge change for content publishers of all kinds, not just news media!

On a related note, tying in to my recent accidental manifesto on properly valuing content, Nieman Labs’ has another interesting story on the Newport Daily News’ attempt to defy conventional wisdom by charging MORE for their online content, in an effort “to get people back into the printed product.”

The idea: Charge enough for the online content that the paper-and-ink product looks a lot more attractive. Don’t undercut your primary product with a free alternative that doesn’t make you money. And provide an online edition for those customers who have a compelling reason to pay for content. “Our goal was to get people back into the printed product,” publisher Albert K. Sherman, Jr. told me. He said some readers, when hearing about the plan, asked “why would they pay for it on the Internet when they can go buy the printed paper? And that’s perfect — that’s what we want.”

Crazy? Like a fox, perhaps.

Which smartphone do you own, what are you reading on it, and how much would you pay to read it? Comment or tweet with #contentapp.

Written by Guy LeCharles Gonzalez

Guy LeCharles Gonzalez is the Chief Content Officer for LibraryPass, and former publisher & marketing director for Writer’s Digest. Previously, he was also project lead for the Panorama Project; director, content strategy & audience development for Library Journal & School Library Journal; and founding director of programming & business development for the original Digital Book World.

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