The iPad Effect

It’s no secret that advertisers prefer pixels over print, except perhaps in community newspapers. But now, the advent of the iPad is posing a challenge to the traditional Internet as an advertising platform.

Beautiful applications … are drawing consumers. WIRED, a technology magazine owned by Condé Nast, claimed to sell 24,000 downloads within 24 hours, at $5 each.

Newspaper and magazine apps are popular with advertisers, who pay up to 10 cents per reader—several times what newspapers tend to charge for web ads—for the privilege of appearing on a sexy new device.

The iPad’s effect on media firms extends well beyond its screen. The device contains a web browser as well as an app store, bringing together the world of paid content and the open web, where print content tends to be free.

It’s as though a newsstand carried two versions of every magazine—one costly, the other inferior, but free.

Media firms that were already coming to believe that the web is a mediocre advertising platform have drawn a stark conclusion: they should pull back from the free web.

This may drive online news content behind paywalls.

James Moroney, publisher of the Dallas Morning News, says the release of a paid iPad application later this year is likely to coincide with the erection of a paywall on the Dallas.com website. It’s illogical to charge for one but not the other, he says.

To pay or not to pay. That is the question.

h/t: THE ECONOMIST

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