When it comes to publishing apps on the iPad, there are two models: 1) social readers that bring all your realtime news feeds together like Flipboard; or 2) single-title apps from major publishers like the New Yorker, The Daily or the New York Times. Those two models are also dividing along the lines of subscriptions versus ad-supported/free.
In the video above, Flipboard CEO Mike McCue makes the case that in tablet publishing, “the bulk of the revenue will come from advertising.” To make his point, he shares some recent numbers from Flipboard, which is seeing more than 10 million “flips per day”, up from 3 million two months ago. A “flip” in the app is like a pageview (in the video, he says 10 million flips per day, but later he checked the number and it is actually 11.4 million). Of the 2 million people who have downloaded the Flipboard app to their iPads, I’ve heard from other sources that about half are active, which would mean that on average each user flips through 10 pages a day.
McCue thinks there will be a place for subscriptions as well, especially for premium media brands, and would love to be able to place subscription buttons on premium content within Flipboard. My idea is that if you already subscribe to a publishing app on iTunes, the articles should be able to appear in Flipboard, News.me or any of the other general reader apps. But if they are not already a subscriber, some sort of all-you-can-eat subscription model would have to be worked out, with Flipboard doling out the money based on how many times articles from a particular publisher is read. It can get complicated because “people like to see their content atomized,” says McCue.
That’s why he thinks advertising will produce more revenues than subscriptions. It is easier to split advertising revenues with publishers based on readership. His investors agree. They just put in another $50 million into Flipboard, betting that he is correct. Although McCue and I have debated whether he needs that much, I also think that advertising is the way to go with tablet publishing. McCue also hints that Flipboard’s iPhone app will come out this summer. Watch the video to find out more.