Is the Wall Street Journal's iPad Strategy Working?
The Wall Street Journal decided to try an interesting experiment with its iPad app. It is charging about $4 per week for access. That's a lot. To view the publication on Apple's newest gadget, you must pay more than you would to read the WSJ by any other means -- you pay $1.50 per week for iPhone/other mobile device, $2 for online access, $2.29 for print, and $2.69 for print plus online. Yet in the first two weeks of sales, the WSJ has 3,200 new subscribers for its iPad app. Is its strategy working?
The WSJ's pricing breakdown above might seem a little bit crazy. It expects iPad subscribers to pay more than anyone else. Why would they? The Wall Street Journal may realize that iPad owners aren't just any segment of the population -- they're a specific group of people who enjoy consuming information and can afford to buy a luxurious technology to do so. Those are the precise characteristics of consumers who might be willing to pay more for the WSJ's app.
In the first two weeks, the Journal's got 3,200 bites. That might not sound like a lot, especially given that 500,000 iPads reportedly sold in the first week. But according to one estimate, that would likely put it in the top-3 most paid-for apps.
Those 3,200 are also in addition to 30,000 current subscribers who are enjoying a free iPad trial. Once that ends, you can be sure that a fair number will grudgingly pay to continue enjoying the publication on their new iPads. How high a rate of retention the Journal's app will have at that time is probably the biggest test. But 10% new subscribers growth isn't too shabby.
At the end of April, the 3G iPad will also be released. It's certainly possible that additional avid WSJ readers are waiting to purchase this version of the device. After all, business travelers are much better off buying this upcoming version of the iPad, and they make up the target audience for the WSJ app.
Anyone interested in seeing whether the iPad transforms the profitability of media should keep an eye on the success of the Journal's app. If the publication can manage to sell a hefty number of iPad subscriptions at its lofty price point, there's definitely hope for boosting media companies' profitability through subscriber revenue based on this new technology. If iPad WSJ app subscriptions struggle, however, then that's probably bad news for the industry.