Media look to smartphones to help pay for news
MONTREAL - Some of Canada's leading news organizations are betting that avid BlackBerry users are also news junkies and have introduced a mobile service specifically for RIM smartphones.
The Canadian Press Mobile application is available at BlackBerry App World, a virtual "app" store launched last week by Research In Motion (TSX:RIM) with both fee-based and free services.
Users will be able to search, save, share and rate news and photos from the participating news organizations, as well as personalize content based on postal codes, without having to view multiple news sites.
The Canadian Press news agency and its partners - which include CTVglobemedia (TSX:BCE), Torstar (TSX:TS.B), Transcontinental (TSX:TCL.A), the Winnipeg Free Press and The Associated Press - are describing the service as Canada's "most comprehensive news app."
The application won't be free - although the introductory price for a year's subscription is a modest $3.69. The service will also carry advertising.
However, media watchers are still wondering if consumers will bite, given that traditional print and broadcast media already offer much of their content, supported by advertising, on the Internet for free. Many mobile "apps" are also free.
"We're on Day 1 as it relates to mobile applications charging for news," said Tomer Strolight, president of Torstar Digital.
"It may have a very long and robust history and be the saviour of (news) content generation, or it may be something that fades away quickly and doesn't get uptake," Strolight said from Toronto.
But it's important for news organizations to experiment and take risks as old ways of doing things become less viable, he said.
The weak economy and plummeting advertising revenues have hit North American news businesses, with job cuts and even some bankruptcies and newspaper closures, mainly in the U.S., prompting calls for new ways to generate revenue.
Strolight said it's too soon to say if consumers will want to purchase news as they do music apps for their smartphones.
"These things are technically possible, but nobody knows what the consumer reaction will be and how the market will play out at the end of the day."
The Canadian Press application, available in French and English, includes local, business, sports, entertainment, technology, science and "wacky" news, with photos, from the various media. The technology, which automatically loads and refreshes news stories, was developed by The Associated Press and works on all of RIM's smartphones.
"It continues to show that we're leading the digital age in this country," said Eric Morrison, president of The Canadian Press.
"If you look at the partners we've got ... it's putting together the country's first network of local, national and, then with AP and us, international news. So you've got a single point where they (users) can come and get any of those categories," Morrison said.
Kevin McIntosh of Transcontinental Newspapers, publisher of daily papers in Atlantic Canada and Saskatchewan, said the one-stop application is ideal for the "voracious consumers of news" that BlackBerry users tend to be.
"Our app keeps them plugged into the latest stories wherever they go, even on the subway or on a plane when there's limited to no Internet connection," said McIntosh, director of digital publishing.
Most online news sites or services need access to the Internet to display content. This news app is always available, even if an Internet connection is not.
McIntosh said news on mobile phones gives news organizations an opportunity to recoup some money but it's not yet clear how much.
"Because it is new, we owe it to ourselves and our readers to pursue it with some caution."
U.S.-based analyst Jeff Orr said smartphones can make money for news companies through advertising but they have to tread carefully.
"It's a very intimate relationship with the consumer, meaning you have to be on your best manners on delivering content to them," said Orr, senior analyst for mobile content with digital tracking firm ABI Research.
Too much information or disagreeable content won't work, Orr said from Bend, Ore.
"They have the last vote to turn you off."
The Canadian news app is one of about 1,000 mobile applications that were part of the App World announcement by RIM during a wireless show in Las Vegas.
RIM and iPhone maker Apple are in a battle for smartphone supremacy in North America. Apple has been in the market for almost a year with its App Store, with about 25,000 programs available and about 800 million downloads reported.