Peter Kafka

Recent Posts by Peter Kafka

Why Is Time Charging $5 for Its iPad App?

One subplot amid the iPad hype: A lot of grumbling about the cost of the apps, particularly from established media companies.

Example A: Time Magazine, which is asking $4.99 a week for its app–the same price you’d pay if you bought the paper edition at a newsstand.

The electronic version of the weekly does contain some bonus features, like extra photos and video clips. And some iPad users seem to be okay with it: As I type this, the app is ranked No. 16 on the iTunes “top paid” list.

But to hear the digerati tell it, Time Inc. is crazy to ask users to pony up full price for a digital good that’s available for free on the Web–even for Apple’s (AAPL) iPad browser. What are the people at Time Warner’s (TWX) magazine unit thinking?

I asked them and got this response:

We are offering a compelling, robust and beautiful product. The production of this high quality, fact-checked reporting takes resources. We believe there is a real value to this product and as consumers experience it, they will agree. We are currently only offering single copy sales, just like at your local newsstand–and, the price is the same as the physical newsstand. We will soon be offering subscriptions–both digital subscriptions and print/digital bundled subscriptions. We anticipate these subscriptions will be discounted off the newsstand price.

Two notes:

  • We’re less than a week into the great iPad experiment and none of this pricing is set in stone. So it’s entirely possible that Time Inc. will eventually lower the price for some of its iPad apps. But the company can’t do that if it starts low to begin with.
  • Note that the publisher says it will offer subscriptions at a discount from newsstand prices–not from paper prices. That’s because magazine publishers famously give away their subscriptions for a fraction of their cost. If you Google “Time magazine subscription,” for instance, the first thing you’ll see is a $20-per-year offer, (“Save 92% of the cover price!”). I wouldn’t be surprised at all to see a scenario whereby the publisher asks subscribers to pay more for a tablet subscription than for a paper-and-ink version, at least for some titles.

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