Magazines that have invested heavily in online apps are finding that the payoff is smaller than their investment now and may continue to be for years to come.
Those publishers who have taken the plunge and hired staff and put money into upfront and development costs are finding that their investments are being met at worst with a yawn by advertisers and at best lukewarm ad interest, according to a story in Brandweek.
While there is a lot of hype and a very few success stories, audiences are too small to have much impact.
"The problem with apps is, not a ton of people are downloading them," said Martin Walker, a publishing industry consultant. "It's a very small business at the moment. Apple still owns it and they won't let you sell subs. You can't make money on something where you're selling a few thousand copies."Forthcoming tablets that support the Android platform are expected to offer a subscription option, but that opportunity won't come without extra cost. Until developers come up with a way to let publishers create apps that will work on multiple devices, publishers will have to spend more to customize their apps for each screen size and operating system.Publishers privately downplay their apps' development costs. But whether they grow their apps in-house or use an outside developer, development and ongoing staffing costs are adding up.Even for companies that profess not to be hiring a lot of additional people, there are the hidden costs of staffers' time that could have been spent on other products."There's a lot of investment for the future," said Andy Sareyan, president of consumer brands at Meredith Corp.'s magazine group, which expects to create apps for Better Homes and Gardens, Fitness and its other titles. But, he added, "there will be a time when these are profitable. When that time is, I don't know."
The Brandweek story notes that publishers, making apps free, may be may be replicating a mistake they made 15 years ago when they used websites as a upsell bonus and then found it hard to charge for online ads.