I wrote last week about some key findings on mobile news consumption from the Pew Center’s “State of the News Media 2012” report. Tablet ownership is rising and altering the digital news landscape. Consumers are using mobile devices to supplement their news intake and are going directly to the news source, bypassing social media recommendations. These results are positive developments in the future of digital media. Yet, the thorny revenue issue remains. How can news organizations capitalize on the rise of tablets and generate new income streams?
The Pew study does offer some insights into the economics of tablet news consumption. Many news organizations believe that tablets, with their high-resolution screens and interactive features, can operate under a different revenue model than news content released on computers or even mobile phones. Consumers may be willing to pay for digital content on a tablet, and advertisers may be willing to spend more on tablet ads.
Despite this hope, Pew finds that “getting people to pay for content still appears to be a challenge even on the tablet.” Just 14% of tablet users have paid directly for news content on their tablet. Generating advertising revenue on the tablet also remains uncertain because of the power of platform owners like Apple and Google. As the study points out,
“To sell ads on mobile apps, for example, news organizations must give some of the revenue to the platform owner. Apple takes 40% of the revenue for ads sold within iPad and iPhone devices, for example, while Google takes a 30% cut on the price of an app sold on Android devices.”
That said, the report finds that there is one promising demographic when it comes to tablet news revenue: power news users. These users rely mainly on their tablet apps for accessing news and consume news much more avidly than those who rely on their internet browser. Power news users tend to be wealthier, better educated and more likely to pay for news content, all of which makes them ideal targets for news organizations and advertisers. Attracting these high value users to your news brand may ultimately be the key to digital revenue.