USA Today Delays Charging for IPad App, Putting Ad Sales First

Does This Sound Like Early Days of the Internet to Anyone Else?

by Nat Ives
Published: June 21, 2010

         

NEW YORK (AdAge.com) -- USA Today isn't ready to start charging for its iPad app after all, at least not for another 90 days and probably not before next year, saying the ad revenue is outweighing the potential circulation revenue from readers.

The reasoning sounds a lot like publishers' thinking in the early days of the internet as they decided to chase big audiences and ad revenue by posting their news for free.

"It's generating so many impressions, and we have such advertising demand for this that it would be a very poor business decision right now to put up a pay wall," said David Hunke, president and publisher of USA Today.

Paid Content reported earlier today that USA Today had delayed its plan to charge.

USA Today had been planning to start charging consumers for its app after an initial 90-day phase during which presenting sponsor Marriott got all the ad space. But the free app has been downloaded more than 538,000 times so far, and advertisers are eager to appear there, Mr. Hunke said.

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Four advertisers are taking the place of Marriott for the app's next 90 days of free: Barnes & Noble, Chrysler, Coca-Cola and Capital One. In theory USA Today could switch to paid at that point, but it's more likely to wait much longer than that.

"My new horizon on this is to take a look at the first of the year," Mr. Hunke said. "We're clearly going to make some decisions at that time about how much is free, how much is premium."

"In the end we certainly want to find a way to be paid for USA Today's content in digital delivery," Mr. Hunke added. "That's still a belief. But I don't think we know enough yet."

Many newspaper publishers now think they made a mistake when they went free on the web, relying too much on unreliable advertisers and cannibalizing print sales. Some are thinking about charging for some content on the web, but of course by now face competition from countless free news sites -- including almost every other newspaper's.

Many publishers also think the iPad is a chance for a do-over. If they just charge from the beginning, the reasoning goes, consumers will never become trained to expect free news on this platform. The New York Times is developing a paid app to go along with the pay meter for its website next year, but in the meantime has released a free app that only includes a small portion of its coverage.