iPad CJR: Wall Street Journal iPad Numbers Looking Good

[kjk]

http://www.cjr.org/the_audit/wsj_ipa..._looking_g.php

Rupert Murdoch says The Wall Street Journal has 10,000 subscribers paying for the paper on the two-month-old iPad. That’s an excellent start.

What does it mean for revenue—assuming we can take Murdoch at his word (a big assumption, I know!).

The WSJ costs $17.29 a month on the iPad. That’s $173,000 a month in subscription revenue, or about $2.1 million a year. That’s not going to bring back the salad days, but remember there are only 2 million iPads being used in the world. As more people get them or similar gadgets, the potential subscriber base will rise.

And the app is free right now for subscribers to WSJ.com. So a total of 64,000 people use it. It seems likely that the paper will eventually charge WSJ.com subscribers to use the iPad app, too.

What I find interesting is how the WSJ is getting around Apple's 70/30 revenue split:

Apple takes a 30 percent cut of any app sales on the iPad and iPhone. But the Journal is being extremely clever here. Apple only gets its haircut if you sell the app through iTunes. But the WSJ app itself is free to download. What costs users money is accessing the app (at least most of it. Some stuff, like on WSJ.com, is free). So, the Journal signs you up and charges you itself—and keeps 100 percent of the revenue after Visa and Mastercard take their vig. Now compare that to the atrocious Amazon Kindle model, where publishers “get” to keep only 30 percent of the revenue!

Surprised other media companies haven't gone this route.

[scottjl]

actually lots of companies have, hence all the in-app purchases explosion, especially in games.

[kjk]

Originally Posted by scottjl

actually lots of companies have, hence all the in-app purchases explosion, especially in games.

For most of those in-App purchases, doesn't Apple still get their 30% cut?

The WSJ is handling payments "outside" the app, and making the app free-so no money for Apple?

[leebase]

Correct -- in app purchases give a cut to Apple. That's why Amazon and WSJ and B&N give away their apps but you have to go to THEIR websites to purchases books and subscriptions.

Then again -- one can just use the Safari web browser to access content without paying Apple as well. It's companies that don't have their own infrastructure that will use Apple's and give Apple a cut.

Lee