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Could Mobile Be a Boon For Media Companies?

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Tina Products/Markets Analyst
February 1, 2013

According to the results of a survey run by Alliance for Audited Media (picked up by eMarketer), all newspaper, magazine, and business publications in North America will make their content available for mobile devices through apps by the end of 2013, compared to 90% at the end of 2012. Publishers in North America expect mobile to comprise a larger chunk of revenues by the end of 2014 (see chart below).

 

Publishers are not only making their content available for the channel where viewers’ eyes are (mobile), many are monetizing on this opportunity by using a paywall to charge readers for access, with some publishers charging higher prices for digital and mobile versions of their subscriptions. Although recent data suggests that many users may not want to pay for access to mobile versions of publications, over half of media companies expect to reach profitability through mobile apps by the end of 2014.

 

Hence, despite the bleak implications for print, this shift to mobile may actually turn out to be a blessing in disguise for media companies. Although publishers may currently be seeing a decline in viewership, they may be able to recoup losses in circulation revenues through higher profit per digital/mobile subscriber. Over the long run, there is a possibility they will end up being as profitable as they were before the mobile boom,

  1. as there will always be a significant percentage of smartphone and tablet owners who are willing to pay for access (25% and 15% of smartphone and tablet owners, respectively),
  2. if media companies see a high enough viewership,
  3. and especially as smartphone and tablet penetration rises.

 

It would be interesting to see how this transition to mobile has affected advertising pricing for publications. Would this all shift publication advertising into a new pricing paradigm, if it hasn’t already?

 

 

Based on the charts above, below are some key highlights and takeaways I think are important for mobile marketers & advertisers to consider.

KEY HIGHLIGHTS:

  • All media companies will make their content available for the mobile channel by the end of this year.
  • In 2012, mobile accounted for 10%-19% of circulation revenues for 9% of media companies surveyed.
  • By the end of 2014, mobile will account for 10%-19% of circulation revenues for 27% of media companies.

KEY TAKEAWAYS:

  • The decline of print and shift to digital and mobile may seem to be disadvantageous for publishers on the outset, but could turn out to be a boon for media companies.
  • Publishers will charge what the market can bear; as more consumers shift to viewing content on mobile devices, publishers may charge higher prices for mobile subscriptions to compensate for lost print circulation revenues.
  • However, publishers may decide to lower prices to attract more paid customers once the number of digital subscribers plateaus.
  • There will always be those consumers willing to pay to access digital content, so publishers will profit.
  • This will likely affect advertising revenue for publications for all ad channels as publishers face changing media consumption habits with the shift to mobile.

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