News and magazine publishers should instead be developing products and a workflow that caters for the iPad as just one of a range of digital and non-digital readers, says the Reformatting News & Magazine Media report.
Volume of sales of the device, which will launch on Friday in the UK, will take time to build, the research suggests, with Ovum forecasting that shipments of the iPad will reach 13.2 million by the end of 2011. In comparison, Apple shipped 25 million iPhones in 2009 alone.
"However these revenues will be split across a range of application categories and a large number of publishers. Despite a successful launch by Apple, iPad volumes will take time to ramp and the tablet media market will become congested fast, as has become evident for smartphone application stores," says the report.
News and magazine publishers will be competing amongst themselves for a share of the iPad app market, but also against third-party aggregators, says the report: "It is going to be a competitive, goldrush market and there will be far more application failures than hits."
In the push to get on the iPad and other tablet devices, publishers should not overlook the growing mobile market or ways of making money from their websites, says the research. According to Ovum, publishers need to create a set of products for the iPhone, iPad, and other devices and smartphones, ensuring that these are different enough from their websites to command a price premium.
The "bravest strategy" for some publications may be to invest in their print products: "The value of the presence of the masthead brand at the newsstand and a print audience is powerful tool for surfacing applications and promoting other premium digital services."
But the biggest challenge for publishers will be restructuring their operations to adapt to new technologies, new behaviour from readers and to publishing across multiple devices and outlets. With the launch of its iPad edition, Wired magazine announced a new publishing system from Adobe, which will be behind both its print and digital editions. The Ovum report recommends this kind of development, suggesting that news and magazine publishers adopt a single production workflow for multiple print and digital products.
"The iPad promise is a set of new distribution channels for packaged media, but it is one device and volumes will take time to build. Traditional publishing’s challenge to find a new and sustainable business model is immediate," says Adrian Drury, Ovum's principal media and broadcasting analyst and co-author of the report.
He added: "Previous attempts at defining this fourth screen product category have so far failed. Apple, however, is doing more than just selling a hardware platform; it is also leveraging the content and the volume of pre-existing iPhone applications (most of which will run on the iPad) to demonstrate the utility of this form factor. Apple needs the content ecosystem to drive mass-market appeal.
The report suggests a further note of caution for publishers buoyed by the iPad – the market is defined by Apple and its outlook is "fundamentally unknown".
"While the last 12 months have seen standout examples of these new digital edition products demonstrated for the industry, such as concepts from Time’s Sports Illustrated, Condé Nast’s Wired, Denmark’s Information and Penguin's interactive children’s book concept, the consistent message from the publishing ecosystem is that the outlook for these products is fundamentally unknown. The market will be watching consumer uptake of digital edition products on the iPad with intense interest," says Ovum.
"While the Apple iPad promises to deliver a device with the potential to catalyze the market for digital editions, a clear signal from Ovum’s research is that publishers are acutely aware of the potential cost of handing unfettered strategic control of distribution and retail to Apple’s iTunes Store platform. The power and leverage handed to Apple by its control of 65 per cent of the digital music retail market is a clear illustration of the potential risk.
The iPad and the tablet product category are a revenue opportunity and a showcase for the future of packaged media. But, however seductive the device, this new fourth screen does not alone represent the silver bullet for the news and magazine industry."