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Publishers Grab Onto iPad as a Life Preserver

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Condé Nast and the Associated Press might be reading through rose-colored glasses.

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As soon as readers began trading in their ink-stained fingertips for grease-smudged touchscreens, the print publishers found themselves far behind the curve. Unprepared for the mass exodus from subscription fees and newsstand prices, publishers chose to remain arrogant and ignore the growing trend of online blogs -- refusing to believe that readers would prefer free, fast, and amateur to slow, cumbersome, and costly. (See Magazine Survival Depends on Digital).

But now, as publishers recognize the opportunity inherent in e-readers like Kindle (AMZN), Nook (BKS), Sony Reader (SNE), and iPad (AAPL), deals are being struck, partnerships are forged, and apps are being developed to bring the experience of reading a magazine onto a digital notepad.

But merely introducing a pay structure for digital content that's free on the Web, will it be that easy for the industry to bounce back?

Condé Nast is betting hard that it will. Already teamed up with Apple on a GQ iPhone app, the publisher will also unveil an iPad version of the magazine starting with the April issue. The next month will see iPad versions of Vanity Fair and Wired, followed by The New Yorker and Glamour sometime in the summer.

The iPad experiment will undergo some beta testing at first, as editorial director Thomas J. Wallace told The New York Times. "We need to know a little bit more about what kind of a product we can make, how consumers will respond to it, what the distribution system will be," he explained.

The publisher is wisely choosing magazines that will span the broadest demographics as possible -- targeting both genders and a variety of age groups and lifestyles. Even development of the apps will be done both in-house and externally -- Wired being the first -- to test the practicality of each method. President of Condé Nast Digital Sarah Chubb claimed, "We're taking a two-track approach partly because we want to learn everything that we can."

Also gunning for an iPad payment structure is the Associated Press. No stranger to implementing questionable fees for its content, the AP will introduce a paid subscription app for the iPad that will soon complement online access fees in 2011. According to the Financial Times, AP's chief revenue officer Jane Seagrave believes consumers are more willing to pony up money to access content on tablet computers than in a Web browser.

Next year, Seagrave's words might come back to haunt her.

Unlike the majority of Apple's products, the iPad is already hamstrung by limited appeal and a lukewarm initial response. And when even the company admits it's not meant to be a replacement for your laptop, the user base shrinks further. Although Apple would be wise to market the iPad as a suped-up e-reader to compete with the likes of the Kindle and Nook, its notoriously heavy-handed control over pricing and subscriber information doesn't sit well with some publishers, as indicated by CNet's Jim Dalrymple.

And DRM is never popular with consumers.

But the biggest deterrent to entering into a payment structure is the rampant availability of free content on the Web -- even the very same content by the publishers themselves! And yet, when newspapers move behind a pay wall -- as The New York Times will do next year -- thereby blocking any free content online, only a fraction of readers will stick around. Nearly every survey concludes that an overwhelming majority will move on to a different site once a pay structure is introduced.

Which goes to show you: Publishers are still ridiculously out of touch. But is it any surprise? News Corp's (NWS) Rupert Murdoch grumbled he'd rather have fewer paying customers visit his sites than have them read free content off of Google (GOOG). Does that sound like a guy who has a firm grasp at where the publishing industry should be in 2010?

Publishers can close the barn door if they want. The free content horse is already galloping toward the horizon.
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