Apple’s Newsstand went live on the 12th October, and according to all initial reports it’s been a roaring success.
It was certainly expected to help publishers. However, its impact is hugely outstripping expectations with the download rate for Newsstand-enabled apps suddenly booming: for example, the New York Times found their app download rate jumped to seven times the previous level. That might simply be users downloading the container app without making any purchases – except publishers on the Newsstand are also reporting that their sales through the store have jumped, too, with Conde Nast, Future and others announcing purchases at multiple times the previous levels.
So why is it having such a large effect?
There are a number of factors going on here:
1. Title browsing. Before, magazine and newspaper apps were scattered throughout the App Store’s category system, some under Lifestyle or Sports, some under Books, all mixed in with games and utility apps and other types of content. With all Newsstand-enabled apps now under a single Magazines and Newspapers category, it’s much easier for users to browse through available titles and discover publications they’re interested in but wouldn’t have though to search for.
2. Release hype. The publicity surrounding the release of Newsstand has undoubtedly contributed to the swift take-up, driving more users to take a look at what’s available. However, the vast majority of users who don’t follow tech news closely will discover Newsstand not through a press release but by noticing the new icon on their iPad – and unlike the initial buzz, that will continue to push users to Newsstand with every new iPad sold.
3. ‘Empty bookshelf’ syndrome. One theory widely quoted is that the Newsstand layout exploits a psychological tendency to want to fill empty shelves. Users see the empty spaces so browse for content to fill it with – and of course, once you’ve downloaded a publication and tried a couple of free issues, you’re much more likely to decide to purchase a subscription.
4. iPad as a content delivery platform. The iPad was already widely recognised as an important target for publishers, but the addition of Newsstand cements magazine and newspaper reading as a core reason to use the device. That works in both directions, such that consumers who have bought iPads for other reasons are more likely to try digital publications; and consumers who are interested in reading digital publications are more likely to purchase an iPad.
5. Green pastures. The Newsstand is relatively uncluttered for now, having only recently been introduced, so there’s less competition between titles. That will change as more and more publications make the switch, but an increasing number of titles on Newsstand will mean a growing audience as well as more competition.
6. Users more likely to subscribe. With a unified subscription system and a unified store, all integrated with iTunes payment systems, the barriers to users purchasing a recurring subscription are lower than ever.
7. Users more likely to remain subscribed. Before subscription support, users might install a magazine app, read it once, and then simply not think to come back to it. Subscriptions made that less likely, but the user still had to go and pro-actively download new editions, delaying gratification of the impulse to read the publication and making it more likely that the user wouldn’t get around to looking at it. Newsstand pre-emptively downloads latest editions and alerts the user to them, avoiding that delay and keeping them engaged with the title.
8. Growing popularity of the iPad. And finally, that’s all against the background of an ever-growing user base for the iPad. Apple sold another 11 million iPads in their financial Q4 (corresponding roughly to the calendar Q3), and despite increasing competition from the Kindle Fire and other Android-based tablets the number of people looking for content on their iPads just keeps increasing.
Will it last?
Some of those factors will become less relevant as time goes on, and the effect is likely to vary by publisher and by title; there’s no question that being chosen by Apple as one of their Featured apps hugely multiplies the Newsstand boost. However, many of the factors listed should remain relevant as long as the iPad maintains its dominant market position; and some factors, such as the increased ‘stickiness’ of subscriptions, will only kick in over the coming months.