James Murdoch says apps cannibalize newspapers

MONACO Fri Nov 12, 2010 9:38am EST

Visitors check out the new Apple iPads at an Apple retail store in Madrid in this May 28, 2010 file photo. REUTERS/Susana Vera

Visitors check out the new Apple iPads at an Apple retail store in Madrid in this May 28, 2010 file photo.

Credit: Reuters/Susana Vera

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MONACO (Reuters) - Sales of newspaper apps for devices like the Apple iPad are cannibalizing sales of physical newspapers, James Murdoch, head of News Corp's operations in Europe and Asia, said on Friday.

News Corp in June closed its free Times of London website. The Times, the Sunday Times and Britain's best-selling Sunday tabloid the News of the World -- also owned by News Corp -- are now available online only to paying subscribers.

News Corp's British newspaper arm News International said this month the titles had lost up to 90 percent of their online readership and now had 105,000 paying customers, including those who had bought the iPad and Amazon Kindle apps.

The exercise is being closely watched by the newspaper industry, which has lost readers and advertising revenues to free alternative news sources online and is seeking new business models for the digital age.

Rupert Murdoch, News Corp's chief executive and James's father, has called the iPad a game-changer for news media, and many in the industry agree, thanks to the iPad's large screen, high resolution and capacity for interactive features.

James Murdoch welcomed the opportunity to sell through Apple's iTunes online store, despite the fact that Apple takes 30 percent of the publisher's revenue.

"We go to the iTunes store because it's frictionless. They charge a percentage but the guy on the newstand and the newsagent charge a percentage, and they don't even merchandise it properly," he told the Monaco Media Forum.

But he said apps for mobile devices, with which readers typically engage far more than they do with computer websites, were more dangerous to print sales.

"The problem with the apps is that they are much more directly cannibalistic of the print products than the website," he said. "People interact with it much more like they do with the traditional product.

Apple began selling the tablet computer in April and had sold 7.5 million by the end of September. Other manufacturers have responded with their own tablets.

(Reporting by Georgina Prodhan; Editing by Jon Loades-Carter)

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Comments (8)
dhjdhj wrote:
Yep — same way that pesky electricity cannibalized gas and refrigeration cannibalized the ice transport business and….well, you get the idea….it’s called ‘progress’

Nov 12, 2010 9:33am EST  --  Report as abuse
ARJTurgot wrote:
ain’t competition a beotch. A business model based on hiring the notorious and obnoxious to say the provocative can get you talked about, but not make you money.

The answer? Why all these libs should join we me in forming a cartel so we can restrict trade and fix prices.

Tim Berners-Lee is smarter than you. Deal with it.

Nov 12, 2010 10:33am EST  --  Report as abuse
5280hi wrote:
“Smart” people are refusing to be brainwashed by the propaganda that Rupert Murdoch and his buddies in the Supreme Court are spewing. Consumers don’t buy inferior products that don’t meet their needs.

Nov 12, 2010 10:48am EST  --  Report as abuse
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