La Presse spent $40 million to develop its iPad app.
Friday marks the one-year anniversary of La Presse’s $40-million gamble that its future lies in an iPad app.
La Presse marks the occasion with a press release (reproduced below) in which it lauds the fact that it’s now installed in more than 450,000 tablets, making it the most popular Newsstand app in Canada. It also reminds people that it’s about to launch its first Android app, which will be available on some Samsung Galaxy and Nexus tablets starting next week.
The company does a lot of self-congratulating, throwing out some statistics to suggest how successful it has been with this giant gamble. It points out how much time people spend with the app (44 minutes on weekdays, 50 minutes on Sundays and 73 minutes on Saturdays) as well as favourable demographics (58% are in the 25-54 demo, compared to 50% for a paper like the Globe and Mail), and even a stat suggesting people like the adds on the app.
The most interesting statistic is that “nearly 30% of La Presse’s overall ad revenue” comes from the iPad app. Even if we assume that print ad revenue is falling sharply, that’s still an impressive stat.
Because La Presse+ is free, its business model is entirely based on advertising. As I explained six months ago in my analysis, La Presse has priced its iPad ads along the lines of print ads, figuring that it can create an environment where the ads are noticed like print ads are, instead of ignored like most online ads.
We don’t have access to much financial information from La Presse, because the company is privately held by Gesca, which is in turn owned by Square Victoria Communications Group, which is in turn owned by Power Corporation. But even if some bad-news figures are being held close to the vest, that 30% ad revenue figure is pretty impressive.
We can also compare the 450,000 figure to La Presse’s goals. The company had hoped to reach 200,000 readers by September, but got that in May. It hoped to get 400,000 by December, and announced in January that it had surpassed that mark in installations.
When I met with La Presse last year, the estimate was an average of 1.5 readers per tablet, since many families share them. That estimate was later confirmed by a CROP survey. But when you consider the number of people actually reading at least one issue a week (versus those who download the app and rarely use it), the ratio is closer to 1:1. Late last summer, it gave a figure of 250,000 tablets installed and 196,000 people consulting at least one issue a week. At the end of November, it was 340,000 tablets and 250,000 weekly readers. That gap will probably increase as time goes on.
At 250,000 people a week reading at least one edition of La Presse+, the tablet has a bit less than a third of the reach of the print newspaper, or about half that of the printed Gazette.
From her on out, the road gets more difficult. There will be a surge once the Android app version comes out, but then with all the geeks and early adopters already on board, and a big chunk of the general population, it will be up to convincing the hundreds of thousands still sticking with print to shift over to the iPad. And then, eventually, the big decision of what happens to the print paper.
I was handed a free copy of La Presse — on a Saturday morning — at a metro station last week. So clearly they’re not planning on shutting it down any time soon.
La Presse+ is still not perfect. It’s improved its live-news system, even while the iPad edition itself remains a once-a-day thing. It’s also added crosswords and other missing pieces since it launched.
For online readers without tablets, it remains a bit annoying. Its pages can be shared online, but videos aren’t, and dossiers with multiple articles aren’t linked to each other, making it pointless to share many major stories from the app.
Unfortunately much of this is apparently by design. The environment of the iPad app is the reason they can charge so much to advertisers. Put those same stories on a website, and you’re back to the ignorable banner ads that get pennies on the dollar. If this is the future of newspapers, it’s going to be kind of an awkward one for people who read news on anything but a tablet.
So far I haven’t heard of any major media organizations making big changes as a result of La Presse+. But if it continues gaining readers and ad revenue, that may change in the near future.