Why iPad apps will be used to report the collapse of paywalls

Two items in this week’s news highlight the differing challenges that digital media delivery is bringing to print businesses.

First was the release of paywall plans from News International, which could shape the future of journalism and will certainly be the most conclusive test so far of readers’ willingness to pay for online content.

The new sites from The Times, with a fresh newsy look, and The Sunday Times, with a magazine-like feel, each reflect the immediate daily read or longer shelf life of their printed sisters and both relaunched last week. Later this month, a paywall will go up around them and, for most media planners, less than 10% of their online audience is expected to return.

The Murdoch-backed move has inspired a debate within the quality press on the best way to embrace digital change. The News International view is that high quality journalism is valuable intellectual property, which is not cheap to produce and needs to be paid for. If superficial online audiences drift away and a small core of true loyalists remain, then better to have a small online business that generates revenue, rather than a website with lots of traffic and no money.

In contrast, The Guardian’s approach – championed by editor Alan Rusbridger – is that content on the web is free and good journalism should be open to all. That may mean there’s no immediate subscription revenue, but there’s a bigger (if more fleeting) audience to monetise in other ways.

The fault lines are clearly drawn between one news organisation with a focus on making money through its journalism and one more liberal approach that champions the merits of journalism for its own sake. If I was to bet on which model will be more profitable, I’d be inclined to put my money on News International. But we all know that the internet has changed the rules and my hunch remains that the paywall will crumble in the face of the overwhelming democratisation of the internet.

Meanwhile, the rest of the industry is watching from the sidelines. All of us know it’s absolutely right that the market leader has to try and find a paid-for model for online content, but all believe that should The Times experiment work it would be a triumph of hope over expectation. Just ask the music industry.

Whatever happens, it’s clear that the legacy cost model of newspaper production – printing presses, bulk paper, distribution vans – seems like a throwback to a different age. That business model requires huge incomes to meet high fixed costs; in contrast, web-based production transforms newspaper economics.

So, while The Times may lose 90% of its online audience behind a paywall, it might also lose 90% of the title’s offline cost base. Will it work? No one knows. If it does, then first mover advantage could well be critical, since few readers are likely to sign up to multiple subscription news sites, especially with so much high quality journalism available for free across the web and BBC.

At the same time, Friday was the launch day for Apple’s iPad in the UK. High street stores Currys, Dixons and PC World are each stocking the iPad at launch across 139 UK outlets in a breakthrough deal with electronics retailer DSGi.

The iPad may change magazine publishing – especially in the business-to-business sector – just as much as the News International paywall plan may change consumer journalism. The iPad is not cheap – with a likely retail value of more than £400 for even the most basic version, so this is not likely to fall into the sort of mass adoption, at least anytime soon, that we have seen from cheaper technologies like mobile phones or MP3 players.

But it is a beautiful piece of kit and likely to get fast take-up in the sleek offices of media land and the City. It’s killer application is that it has the portability of a mobile phone, with the screen size of a laptop. That potentially makes it a game changer for the companies serving those professionals/ light enough to be carried and read on the train or Tube, with a screen size big enough for an enjoyable reading experience that you just don’t get on a BlackBerry or a phone.

Expect the folks at Centaur to be working out how Marketing Week, Creative Review, NMA or The Lawyer might be better delivered to their upmarket, professional readership via the rich and interactive experience of the iPad, with the potential for links to related articles and video, rather than the conventional printed magazine. Likewise, for specialist publications, the iPad could transform the dull medical journals of a hospital consultant into an accessible library.

I’ll bet the first thing those professional magazines will report in their iPad apps will be the collapse of the paywall.