Bailout

If websites don?t cannibalize, how about apps?

By Felix Salmon

James Murdoch seems to have decided that free websites might not really cannibalize newspapers after all:

Sales of newspaper apps for devices like the Apple iPad are cannibalizing sales of physical newspapers, James Murdoch, head of News Corp’s operations in Europe and Asia, said Friday…

He said apps for mobile devices, with which readers typically engage far more than they do with computer websites, were more dangerous to print sales.

“The problem with the apps is that they are much more directly cannibalistic of the print products than the website,” he said. “People interact with it much more like they do with the traditional product.

This is intuitively true, but I’m not persuaded yet. For one thing, everybody thought that free websites were cannibalizing print newspapers, before we changed our minds. Rupert Murdoch, of course, was the loudest such person, saying that “an industry that gives away its content is simply cannibalizing its ability to produce good reporting.” And so long as such statements are based on gut feeling rather than any kind of quantitative analysis, they’re pretty worthless.

What’s more, News Corp is still putting enormous paywalls up around its UK newspaper websites, to no good effect. If James Murdoch is coming around to the idea that websites don’t cannibalize newspapers after all, what’s the point?

My feeling is that James Murdoch is probably half right here: there are some people who will directly replace a print subscription with a tablet subscription. Equally, however, there are surely also people who will find that a tablet subscription enhances the value they get from the physical newspaper, and increases their loyalty to it. Is the first group larger than the second? One thing we know for sure is that it’s far too early to tell.

Full post as published by Macroprudential on November 12, 2010 (boomark / email).