• Adweek, Monday, November 1, 2010 4:08 AM

The iPad dreams of magazine publishers could be the latest death by irrational exuberance. Despite the optimism that greeted the new device, there is a danger that publishers are squandering an opportunity with clunky apps, bad pricing strategies and unsustainable ad tactics.

All told, 7.5 million units have been sold since April. Clearly, tablets are set to take a chunk of the netbook and desktop computer market. But for now, the market is tiny: about 4% of households own a tablet, according to Nielsen -- hardly a mass market. According to a survey of 5,000 tablet users released last week by Nielsen, 91% of iPad owners have downloaded an app -- and over half have paid for content. Among the top paid apps, however, magazines fall in eighth place. Their individual download title numbers are puny.

Wired crowed about its 100,000 downloads for its first app issue in June; that number has dwindled subsequently to 32,000 in September. Part of the problem stems from the hefty prices charged for publisher iPad apps. An issue of The New Yorker, for instance, runs $4.99. What's more, there's no way yet to get annual subscriptions. In short, there may be a great future market, but first, there are numerous kinks -- size, price, etc. to work out.

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