Apple Newsstand Revenue Quadrupled Since Launch; iPad Revenue 3x That Of iPhone

In advance of the expected new iPhone launch taking place on September 12th, app analytics firm App Annie has taken a look at some of the traction Apple’s Newsstand is seeing in terms of both revenue and downloads. According to its data, the U.S. is the top country when it comes to revenue generated by Newsstand applications, but China leads in downloads. App Annie also found that iOS Newsstand revenue has more than quadrupled since its launch, and the revenues on iPad are three times the size of those on iPhone.

The revenue generated by Newsstand applications comes almost entirely from in-app purchases integrated into the app. Eighty-eight percent of Newsstand apps offer this feature and generate 99.5% of Newsstand revenue globally. Or to put it another way – the 12% of Newsstand apps without in-app purchases generated less than 0.5% of global revenue.

iOS users also prefer the iPad when it comes to reading their Newsstand applications, as iPad Newsstand revenues are three times the size of those on the iPhone, App Annie found. That’s not to say Newsstand adoption on iPhone hasn’t been growing – iPhone Newsstand revenue has grown by over 3,200% since the app’s launch. But even though the iPad audience is smaller, App Annie says publishers need to focus on monetizing their iPad users since they’re the primary source of revenue.

Newsstand is also emerging as a way for older print publishers to grow their digital reader base more than it’s providing a pathway for new startups to become breakout hits. The top five apps by downloads and revenue tend to include familiar names like The New York Times, Cosmopolitan and The New Yorker, for example. NYT actually claims the top spot on both charts. However, App Annie places News Corp-backed The Daily in the #2 position on the revenue chart, which paints a brighter future for the company than what may be in store – well, at least according to some recent reports on the matter. (For what it’s worth, The Daily’s Editor-in-Chief responded in July that rumors of its imminent demise were “misinformed” and “untrue.”)

Globally, Western countries lead in Newsstand revenue per download, with the top being Norway, Australia, Switzerland and the United Kingdom, with the U.S. in the eighth position. Across the top ten, revenue per app is $0.97, more than 2x the world average of $0.45. Seven of the top ten are English-speaking, nine are in the Top 25 by GDP per capita, and five are European. Meanwhile, China claims the most downloads, beating the U.S., U.K. South Korea and France in the top 5. It also accounts for 7 of the top 20 downloaded Newsstand apps by country origin of publisher, followed by the U.S., U.K. and Canada.

What About The Aggregators?

But it’s still the early days for iPad publishers. Alongside Apple’s official channel for publications via Newsstand, the Apple App Store also allows other types of news-reading apps to surface and gain traction all on their own. These tend to be aggregators – essentially a modern, consumer-friendly way to read RSS newsfeeds. Presenting content from a cross-section of publishers as well as personalized content from users’ own social networks, apps like Flipboard, Zite and Pulse offer unique experiences which some readers will prefer. Considering the massive amounts of information people are expected to consume every day thanks to the web’s always-on nature, it may be that flipping from one publication to the next makes more sense in an aggregated, personalized environment like these new applications offer.

Some publishers have begun to experiment with other means of monetization outside of Newsstand, like when the NYT announced plans to offer subscriptions via Flipboard, for example. Others have tested the waters of HTML5, betting on the web to win out overall. The bigger question on everyone’s mind is whether any strategy can “save” the publishing industry – but it’s clear that at least some publishers haven’t given up the fight.