Last week’s launch of the Apple iPad was probably a bigger splash than I expected in any possible way. I mean, I expected the product to be successful – any Apple product generally is, and the first Apple product to pave the way into an entirely new market will do well because it’s the first; but as of today Apple’s passed the 500,000 mark when it comes to iPads sold, and they’ve only been available for over a week. If trends go strong, Apple could very well rack up over a million iPads sold in its first month.
A lot of people like the iPad, a lot of people hate it, and there are both valid and completely invalid reasons on both sides of that line (I’ve written about as much about irrational Apple hate lately as I have about irrational Apple love) but the one thing that’s caught my eye is the visible explosion of the app market with the launch of the iPad. Selling apps is nothing new – the App store is populated with free and paid apps available for your iPhone, Android phone, Blackberry, and more, and for as much as I disagree with the people who claim the iPad is just a glorified iPod Touch, they’ve been available for iPod Touch users as well.
What’s different though is that with the launch of the iPad, all of the apps launched have made use of the iPad as a platform – somewhere between buying software for a shiny new computer (as well as downloading freeware) and apps for a mobile phone. Clearly Apple’s model is closer to apps for a mobile phone than software for a computer, but with the announcement of iPhone OS 4.0, Apple’s portable devices and tablets are looking more and more like computers every day.
The point though is this: the app market has exploded and people are willing to do two things:
- Buy apps by the bushel (but decline to pay for PC software)
- Buy apps but demand Web content remain free (within reason)
Let’s dive into both of these below the jump.
First, let’s take a look at how willing people are to just buy apps, no matter what purpose they serve; whether they compliment free services or replace them, whether they’re worthwhile or not:
Buy apps by the bushel (but decline to pay for PC software)
The app market is doing really well, and part of the model is that people are more willing to pay for apps that they can take around with them on a mobile device than they are to buy software for a PC or laptop (unless they really need it or feel like they want it.) Part of it is portability, and part of it is affordability, since the ability to take a well made app with you on the go on your smartphone has value in and of itself, and most apps are relatively well priced and most popularly downloaded apps are around the $5 US mark or below.
The interesting phenomenon here is that the market for apps on mobile devices is pretty big, and even with the launch of the iPad the App Store saw thousands of downloads within the first weekend the iPad was on the market. The model has some issues; for example the iPad is a separate device from the iPod Touch or iPhone, so if you have a license for an app on one you can’t use it for the other – you’ll have to either download it again or download the version specifically for that device. Regardless, it’s amazing how willing people are to drop anywhere from $0.99 to $10 for an app to go on their iPad or their iPhone, but even a shareware license for a utility on their desktop or laptop for about $7 is too much.
I understand that part of this has to do with intrinsic value – if you believe the Scrabble app for the iPad has more value to you than your favorite FTP app for your PC, then that’s an easy choice. It’s still remarkable though that people are willing to shovel money at apps that don’t appear to have intrinsic value – like the iPhone fart app, for example. People are willing to pay for that, but some have difficulty paying for mp3 downloads from iTunes or Amazon.
This is an important fact, and while I can’t entirely explain it, it leads into the second point.
Buy apps but demand Web content remain free (within reason)
This part of the equation came from a not that Gary Vaynerchuk posted on Twitter; we’ve already made it clear that people are willing to drop money on apps more than they are on traditional software, but people are not only willing to spend money on apps that optimize and bring in Web content to their mobile device or their iPad but they don’t want to pay for that content.
For example, the New York Times has an iPad app that’s remarkably successful. People are willing to download and pay for it and get their news through it for a price. At the same time, the notion of moving to a more Wall Street Journal model where even the Web site requires a paid subscription is an idea that most people, even those who are willing to pay for the app, resist fiercely. The moral of the story is that most people still resist the idea that Web content should be anything but free, but when it comes to optimizing it and streaming it to my portable device or my specialized device, most people are willing to either pay for the optimization or the special features that come with something like an app for their device.
This is important as well – people have a sense of ownership when they pay for an app; they feel like they’re actually getting something tangible, something they feel that they really really own. That sense of tangible ownership is all the difference. When you feel like you’ve purchased something that’s designed to help you customize and personalize the content you absorb, that’s a good feeling. When you feel like you’re paying for a key to a wall that you really don’t think you should have to deal with because there’s nothing special about it (just another news site, for example) then people shy away and are more eager to investigate other options.
This is the reason why the New York Times is having trouble with the idea of making its main news site subscription-based, but has no qualms–or problems–making it’s iPad app and iPhone app subscription-based.
This leads us to the final point:
Can the iPad Save Content Production on the Web?
The short answer is “possibly, with enough help.” The trick is that the iPad itself won’t save content producers from themsevles; neither will Android mobile phones, or the iPhone, or any other smartphone. Neither will subscription models that drive customers away instead of bringing them into the content that a producer creates. What will save content producers is the ability to quickly and creatively provide paid content optimization and added features, not paid content itself.
People will be willing to pay $0.99 for your iPhone app if you give them a way to easily search, save, and watch all of the videos you’ve posted to your site, or if you give them a feature unavailable on your Web site, like tabs for categories of article, the ability to connect with other members of your site community directly, or something similar. The point is that buyers and people interested in your content need to feel as though your apps really offer something unique and special over the Web or mobile Web experience. In order for someone to spend money, they’ll need to feel like your app doesn’t just optimize your content for their device, but they’ll want to feel as though you’ve done something to improve their experience.
If more content producers could do that in more than just one way (I’ll bet different audiences would like different apps, as long as you don’t flood them with options and clones) or even offer the gateway to their content for free and then premium content for additional fees, the revenue from people looking to take their content and communities on the go with them could very well help pay for the operations required to investigate, produce, and build that content. Will it get the publishing industry and video or music providers back to where they were in their single-stream, owner-to-consumer heyday? Likely not, but it may be able to provide enough revenue to make some of those operations worthwhile, and get us back to things like investigative journalism and dedicated reporting.
It’s a hard road, and an uphill battle, but the sheer popularity of the iTunes App Store proves that it’s possible. There may be a light – however dim – at the end of the tunnel for content producers, and they can simultaneously give their consumers and customers what they want without being forced to restrict access to information in order to make money.