Should newspapers offer subscribers a deal on tablets? The idea’s being tried again despite earlier flop

October 31, 2012

Sometimes what's old is new, even in the newspaper business.

You may have seen the news earlier this week that the British newspaper The Times plans to offer a discount deal on a new Google Nexus 7 tablet to attract subscribers. That idea was tried here in the States and flopped. 

The Times deal is focused on its digital edition, but a similar kind of deal in Philadelphia also included its print edition. Here's what happened.

When sister publications The Philadelphia Inquirer and The Philadelphia Daily News last fall offered subscribers a hefty discount on a tablet for either $129 plus a one-year subscription or for $99 plus a two-year subscription to either paper, then-owners Philadelphia Media Network thought they had found a way to stay competitive in the race for digital eyeballs.  

Specifically, the Philadelphia Media Network offered subscribers a deal on the the Arnova 10 G2 tablet from Archos, a tablet pre-loaded with the papers' three paid apps and ready access to the publications' free site, Philly.com.

The 10.1-inch Wi-Fi tablet was fairly current for the time featuring a 1 GHz processor, 1024 x 600 pixel touch screen display, and Google's Android 2.3 Gingerbread OS. It also supports Flash, plays high-def video up to 1080p, and includes dual-facing cameras.

"This partnership recognizes that consumers are increasingly utilizing tablets and other highly portable devices for their news, sports, and entertainment needs," the papers' publisher Greg Osberg said at the time in a statement.

Management was so high on the hardware that the company started the program by offering 5,000 tablets, up from the 2,000 it had initially planned when the program debuted last September.

We're not in the business of selling devices

But it all went downhill from there. The old owners stopped the program because their wasn’t enough demand after the four-month beta test to enter into a phase two test, said a spokesman for the new owners.

This past April, a group of local business leaders called Interstate General Media paid $55 million for the papers, less than 15% of the $515 million spent to buy the papers in 2006. “The previous owners learned that selling electronics was not where we wanted to go,” acknowledged General Manager of Philly.com Steve Alessi, who worked for the old owners and still works for the new ones.

“We made money on the subscription part, we didn’t necessarily make money on the tablet,” he added.

Alessi said the tablet project has its good side. The initial initiative provided a nice, concise solution [for fans] to access our content any way they wanted, including a device,” the GM said. "It worked well in terms of exposure [and] kept us on trend in terms of higher mobile use.”

Although the business decided not to move ahead with the project, Alessi still has good things to say about the tablet business. “It was a great beta test and we learned a lot,” he told TabTimes. 

All in all, the previous owner sold around 5,000 tablets, which the papers continue to service.

“Most likely, we will not sell actual electronic products going forward,” Allessi said. “That’s because technology is changing too fast. There are too many versions to compete with. It’s not our core business.”

Putting iPads to work

That doesn’t mean that Interstate General Media has had its fill of tablets.

On the contrary, Allessi said that every sales person is equipped with iPads that demonstrate the company's media products. And the firm's digital team has been supplied with iPads to help customers who have technical difficulties with content on their iPads.

In addition, all upper management has iPads. Some of the reporters, who do double duty as editors and senior editors, also have iPads. 

Content is available across all platforms, he added, noting that the number of unique mobile users has grown to 1.4 million. “Overall, [our studies] show it will continue to increase. Users will continue to consume our content on tablets and we have to make sure it will be there.”

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