CNN's New iPhone App: Do You Get What You Pay For?

CNN's new iPhone app is creating quite a stir. First of all, they're the first major news site to have a paid app ($1.99). Secondly, they've included ads in it. Users are in quite an uproar over this. They wouldn't pay for something with ads in it! Yet, what about newspapers, magazines, television, and increasingly games? We constantly pay for media that includes ads, and we don't even think twice about it.

So why the fuss about this app? CNN is actually following an old publishing model -- charge a small fee and include ads. The main reason for the commotion is that CNN is violating the existing expectation that free apps can include ads, but paid apps should not.

To take a step back for a second, according to data we have at Mobclix, the largest mobile ad exchange, 77.4% of the App Store is paid. That's almost 67,000 paid apps, whereas only 22.6% of apps are free. This dynamic is less extreme in the news category, of which CNN's app is a part, where 31.9% of apps are free. CNN is the only major news outlet with a paid app, so they easily make it to the top slot in paid news apps. With this advantage, plus the revenue from advertising, the app is likely going to do very well for CNN.

Does $0.99 or even $1.99 a pop really allow developers, media outlets, or anyone else to produce a quality product? If you want developers and publishers to put hard work into not only making a good app, but also constantly updating it, they might need more than a one time fee of one or two bucks. They need an alternative revenue stream which can be provided by a subscription fee (which users hate) or ads. CNN explains their decision to include ads as a way to ensure they can continue to deliver a premium experience.

My question to you is, wouldn't you rather occasionally see an ad in your app than have the quality go down? What is the fair price of an iPhone app and how do we judge what we are owed after we give an iPhone developer our hard earned dollar?

Quick Poll

How do you feel about paying for an iPhone app with advertising in it?

As long as I get good content, I'm fine with that.

If I pay for an app, I shouldn't have to put up with advertising.

I would never pay for an app anyway.

Share your vote on Facebook so your friends can take this poll

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Comments

[ppolischuk]

Charging a small fee so that you can dominate the paid app space! Interesting strategy. Wonder if it'll work!

[ephoenix5]

Screw that. I get free totally functional apps that come with ads. If you sprint for the 0.99 or 1.99, the only change is that there are no ads. The model of offering ads may be tried and true (sort of) in the newspaper industry -- but an app has no paper involved. Distribution is practically free.

CNN cannot make a buck just charging the upfront fee (I understand that), but I would never pay for the app to get news when I can get the HuffPo app for free with better content -- or any other of the countless news apps that are free and provide nearly the same news. I mean, I feel for CNN, but that's not competition -- paying for the app on top of getting ads is charity. Sorry -- no way. I've seen the app and I always scoff at the idea of paying to get a paid CNN App -- just won't do it.

[Pupadup4oBama]

I have never paid for an app in my year of having an iPhone. I will put up with the ads for the free stuff. HOWEVER< if I did pay for the app, I'd be po'd too

[Jeff Yablon]

It's funny, isn't it? CNN is not a free TV channel, either; you need either cable or satellite to get it.

Are the people who object to this doing so became it's the first time they EXPLICITLY have to pay for CNN, while in the past they have gotten the content as part of a bundle that included other channels? I'll bet most CNN watchers would be horrified if they ever stopped and realized that they are also paying for FoxNews!

It's about change, folks . . .

Jeff Yablon
President & CEO
http://answerguy.com