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Magazine publishers anxiously seeking iPad subscription deals from Apple

post #1 of 18
Thread Starter 
As the iPad-only newspaper The Daily is expected to launch with a new subscription service in the near future, major magazine publishers are still looking to reach a deal for recurring application subscriptions on the iPad.

In a story profiling the apparent frustration of publishers with the iPad, The New York Times notes that the ongoing development of a new application subscription feature through Apple's App Store was apparently the reason The Daily, a new tablet-only newspaper from media giant News Corporation, was delayed from an anticipated launch this week.

"It is expected that magazines will eventually have an arrangement similar to the one News Corporation has with Apple that allows for iPad subscriptions," author Jeremy W. Peters wrote. "But no such deals have been struck yet with Conde Nast, Hearst or Time Inc., said people close to discussions with Apple that were intended to be private."

In the meantime, magazine publishers must make due with the existing pay-per issue approach, which has thus far frustrated their efforts to fully capitalize on the booming tablet market that some industry watchers expect to explode into a 50 million unit business this year.

Consumers have thus far shown a reluctance to pay newsstand premiums for digital copies of magazines on the App Store, such as the $4.99 per-issue charged for the weekly publication The New Yorker. That translates to more than $250 a year to read the magazine on the iPad, well above print subscription rates for a digital product with only a fraction of the overhead to produce.

In addition, in the case of most magazines on the App Store, consumers must manually fetch each new issue and purchase it individually rather than have it delivered to their iPad automatically. That similarly doesn't bode well for magazine publishers, who generate the bulk of their revenues off yearly subscriptions rather than impulse buys.

If you look at the Apple store the most common reason that people give an app a low rating is that it lacks a subscription option," said David Carey, president of Hearst Magazines. "They want to subscribe, and they dont like the idea of paying $4.99 a month.

According to the Times, Apple is also refusing to share consumer data with the initial wave of App Store magazine publishers, data that would otherwise help publishers learn about their digital audiences and provide clues on how to better fine tune their offerings.

As such, many publishers are looking forward to competitive tablet platforms from BlackBerry and those based on Google's Android operating system. They hope the advent of these iPad rivals will pressure Apple into providing publishers with more flexibility over the way they deliver and price their magazines for iPad users.

Andrew Swinand, president of the Starcom MediaVest Group, which helps advertisers place their content in magazines, said publishers are also taking hold of tablet devices with more enthusiasm than they did with the Web.

For example, they offer a platform for richer content and advertisements, superior reader interaction, and unlock additional revenue-generating opportunities through the sale of stand-alone feature issues that may cost $5 and focuse on a particular subject such as cooking for the holidays or re-modeling a kitchen.
post #2 of 18
Last I checked magazines are still welcome to take money via their own sites. So they are not stuck with only newsstand style purchases.

And I can't help but wonder if half the folks yelling about subscriptions are doing so because that also means a lower price. Many of these digital mags are yet taking advantage of he richness of the platform and thus the issues aren't worth the price being asked for. Half is generally more like it
post #3 of 18
Apple needs to get their sh*t together because this is ridiculous. I paid $800 for my iPad to read magazines on and I'm stuck with Zinio's limited selection.
post #4 of 18
Should be: "publishers must make do . . ." not "due" (fourth paragraph).
.
post #5 of 18
Quote:
Originally Posted by bdkennedy1 View Post

Apple needs to get their sh*t together because this is ridiculous. I paid $800 for my iPad to read magazines on and I'm stuck with Zinio's limited selection.

I'd rather that the publishers got their sh*t together and started publishing via Zinio's platform as this is the only way I can have a guarantee of past content being available to me regardless of what future device I choose to use.
post #6 of 18
Apple should appease these other publications by adopting the Google 2-step system of app deployment:
  1. Release an application the second it finishes compiling, stick a beta logo in the upper left-hand corner, then have the world be your beta testers.
  2. Remain in beta for about 4 years so you can use it as an out in case anything happens (data loss, privacy breach, etc.).

Using this system would appease all of us salivating at the prospect of yet another release of Apple goodies. Why did they hold up adding cameras to the iPhone/iPad just because FaceTime wasn't ready? Throw it out there with some POS software, then update it when it's ready.
post #7 of 18
I find this whole situation hilarious. Did the past 11 years just not happen or something? Guys, it's called the Web. Use it. Pay Walls are so Old Media.

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MacBook Pro 15" | Intel Core2 Duo 2.66GHz | 320GB HDD | OS X v10.8
White iPad (3G) with Wi-Fi | 16GB | Engraved | Blue Polyurethane Smart Cover
White iPhone 5 | 64GB | On 3UK

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post #8 of 18
Quote:
Originally Posted by bdkennedy1 View Post

Apple needs to get their sh*t together because this is ridiculous. I paid $800 for my iPad to read magazines on and I'm stuck with Zinio's limited selection.

If you truly paid $800 for a device to just read magazines on .... then I'd suggest that you're the one who needs to get their sh*t together.
Apple is not Appl ...... Please learn the difference!    
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Apple is not Appl ...... Please learn the difference!    
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post #9 of 18
I don't buy e-books or magazines online because they cost too much. At this time I can buy paperback books cheaper than e-books. That is just insane. Even if e-books cost the same as paperback books I wouldn't buy them.

I'm not against companies earning a profit. I'm against clearly being gouged. Digital storage and transmission costs nearly nothing. I realize that.

With paperback books I can order them to be shipped to me and I keep a copy forever. The same happens with paper magazines. I've read that some magazines aren't given to the purchaser. They are just allotted a certain amount of time to access it. Then the magazine isn't available anymore even though the user purchased it. It's no different than renting a movie but at full purchase price.

Subscriptions to popular magazines is often just twenty-five percent of the news stand purchase price. Online magazines don't come close to that price. If they can ship a physical product to somebody's house and make a profit at just twenty-five percent of the cover price then at what price should a non-physical product be and still give them an equivalent profit level?

I would subscribe to many online magazines if they charged just twenty-five cents per issue. Remember these things are full of advertisements. With electronic versions they could earn tons of money getting paid each time somebody clicked an advertisement.

Maxim Magazine sells a one year subscription for just $14.97 at Amazon.com. The listing says "You Save $44.91 (75%)". This equals $1.25 per issue. There is a special offer. Just sign up for automatic renewal and the price drops to just $5.00 which works out to ONLY ($.42/ISSUE). THIS IS FOR A PHYSICAL PRODUCT DELIVERED TO YOUR MAILBOX!

If Maxim Magazine can deliver a magazine to your door for forty-two cents and make a profit then what should be the price of the electronic version without any postage?

I suppose everybody sees my point.

Magazine and book sellers are just missing out on the flood of orders they would get if they would just be realistic about the intelligence of the consumers they want to reach.

Many internet marketers give away digital e-books that have links within them. Those links take people to products for sale. These marketers earn money when someone buys a product. Some earn money just from the click on the link. Magazine sellers would earn so much more because their links and offers would look so much better and enticing that they would get plenty of clicks.

E-book sellers would be able to put numerous links within their e-books if the e-book software would work with web browsers. They could advertise more similar books than they could just using a paper page in the back of a physical book. Now the Kindle and Barns & Noble e-readers have such capabilities, as does the iPad.

I'm just against being exploited. When electronic media is priced accordingly I'll start buying it.
post #10 of 18
Established magazine publishers have existing sales channels and franchises with customers.

Unlike many newly-minted software companies who willingly pay 30% to Apple to handle the entire distribution system (showing product, testing, selling, collecting funds, distributing software & updates, etc). And, buyers for these software products, for the most part, use them exclusive to the App platform.

Conversely established periodicals & newspapers like the NYT, Times of LondonThe Economist, The New Yorker, etc - use the App platform as an adjunct to existing operations. Apple should price for what it delivers on this adjunct basis - software distribution and the option to read a periodical on an iPad/Phone, perhaps and second alternative for collecting subscription review.

Its an error on Apple's part to try and wedge itself between established players and it customers. Over the long run - nobody will win.
post #11 of 18
Quote:
Originally Posted by Arthurbb View Post

...

Its an error on Apple's part to try and wedge itself between established players and it customers. Over the long run - nobody will win.

Nonsense. To the New York Times or The Economist, you are not the customer; you are the product. The customers for those publications are their advertisers.

The whole point of going to electronic publication is that the old established relationships are dying. Have you picked-up a magazine lately? They are more like brochures--those that are still in operation? Unfortunately, dead tree publishers are trying to expand to the iPad while preserving the dying order. What is more, they want to gouge more money from their iPad subscribers than from their dead tree subscribers.

It is simply not true that there will be no winners. The written word is going through yet another revolution. The winners will be those who understand the post-revolutionary world and who do what is necessary to take advantage of it.
post #12 of 18
Quote:
Originally Posted by AppleInsider View Post

...many publishers are looking forward to competitive tablet platforms from BlackBerry and those based on Google's Android operating system. They hope the advent of these iPad rivals will pressure Apple into providing publishers with more flexibility over the way they deliver and price their magazines for iPad users.

Good luck with that. They lost that battle last year. By this time next year the iPad will have a potential subscriber base in the neighborhood of 50 million users. The smart ones will cut the best deal they can ASAP and start building that subscriber base. The stupid/stubborn ones will eventually cave, and lose valuable time. Their choice.
post #13 of 18
"above print subscription rates for a digital product with only a fraction of the overhead to produce."

If by fraction you mean 90% of the same cost you might be correct. Writers are still paid as are designers, editors photographers etc. In fact there's an additional expense of creating the digital edition if it involves more than simply porting a PDF to the web. The only way to reduce costs is to have a single distribution scheme not a dual system (digital and print). Supporting a dual system will always cost more than a single.

Magazines don't make money from subscribers. Read that again. Now understand that with subscriptions magazines are only trying to cover cost of postage that's why you can subscribe for significantly less than the news stand rate. They are only covering postage.

Newsstand sales are split heavily with the distributor. Again the publisher is not trying to make money at this level. Sell through on most magazines is between 25-50% meaning half the magazines printed and on the shelf at Barnes and Noble will end up in the recycle bin, never purchased.

The goal of subscriptions and news stand sales is to present the advertiser with guaranteed readers. The advertisers carry the burden of paying for the magazine. The magazines can say to the advertisers that they can guarantee 1.2-1.5 million readers a month so they can justify charging $250,000 for a full page ad.

Don't believe me. Look at Maxim's media kit. http://www.maximmediakit.com/print/specs/

The take a look at there circulation statement:
http://www.maximmediakit.com/downloa...jan_jun_10.pdf

They print around 3 Million magazines. They have 2.1 million paid subscribers. They sell 270,000 - 373,00 (12%-15%) issues on the newsstand based on buzz surrounding the issue.

Magazines make their money from advertising. If their lucky the cover some of their costs with subscriptions. The only magazines that make money on subscriptions are trade magazines that have limited distribution and appeal. Hence why their subscription rates are $50-$200 a year.

I would think based on this that the sticking point is collecting demographic information to help advertisers target their markets more effectively. Without demo info you can't tell the difference between a single 35 year old lawyer with tons of disposable income and a poor college kid in a dorm room without two nickels to rub together.

Demo info is how they sell advertising. Selling advertising is how they make money.
post #14 of 18
Bleep Rupert Murdock.
Citing unnamed sources with limited but direct knowledge of a rumoured device - Comedy Insider (Feb 2014)
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Citing unnamed sources with limited but direct knowledge of a rumoured device - Comedy Insider (Feb 2014)
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post #15 of 18
If you are an online subscriber to the Economist you can download the issues on your iPad. Nothing fancy in terms of new content - just the same articles formated for the iPad - and they are small files since it's mainly text. The advertising is a few fancy ads rather than the magazine ads, which I prefer to the Zinio page pdf approach. This is not ideal, i.e. I can't search the archive, I can't email an article - but - it's a good approach if you want to be able to haul around a lot of content in a small space. Searchable content - that's what I want.



Quote:
Originally Posted by Mr. Me View Post

Nonsense. To the New York Times or The Economist, you are not the customer; you are the product. The customers for those publications are their advertisers.

The whole point of going to electronic publication is that the old established relationships are dying. Have you picked-up a magazine lately? They are more like brochures--those that are still in operation? Unfortunately, dead tree publishers are trying to expand to the iPad while preserving the dying order. What is more, they want to gouge more money from their iPad subscribers than from their dead tree subscribers.

It is simply not true that there will be no winners. The written word is going through yet another revolution. The winners will be those who understand the post-revolutionary world and who do what is necessary to take advantage of it.
post #16 of 18
Writers, support staff and publishers like everyone else need a paycheck and have investors, stockholders who all expect revenue. These days, with the economy being terrible, even the most successful magazines and newspapers need multiple revenue streams to stay financially viable. Even the Wall Street Journal has only posted small snippets of their articles because they want readers to pay for their content. The New York Times is starting to go this route as well.

The past 11 years has been great but I think the publishers are realizing that giving their content away for free isn't financially realistic. Also the public needs to stop thinking that everything on the web should be free. Free can work for somethings, but obviously not every publication can be supported by this free mentality. Especially, if the public wants quality newsworthy reporting.
post #17 of 18
I agree with the story, $4.99 per issue (weekly!) is way too much. Twenty-five cents, however, seems too little, even for digital distribution. How about simply, $0.99 per issue with your paid subscription. Ninety-nine cents worked fine for iTunes tracks, and then TV shows, so why not here? Publishers can still charge more for single issues, just as they do on newstands. Everybody wins.
post #18 of 18
Quote:
Originally Posted by NotTylerDurden View Post

Magazines don't make money from subscribers. Read that again. Now understand that with subscriptions magazines are only trying to cover cost of postage that's why you can subscribe for significantly less than the news stand rate. They are only covering postage.

Magazines make their money from advertising. If their lucky the cover some of their costs with subscriptions. The only magazines that make money on subscriptions are trade magazines that have limited distribution and appeal. Hence why their subscription rates are $50-$200 a year.

I would think based on this that the sticking point is collecting demographic information to help advertisers target their markets more effectively. Without demo info you can't tell the difference between a single 35 year old lawyer with tons of disposable income and a poor college kid in a dorm room without two nickels to rub together.

Demo info is how they sell advertising. Selling advertising is how they make money.

If magazines earn their profits from advertising (as I knew they did) then why must they charge so much money for a digital product that has no postage cost?

Nobody says they must create a different interactive version of their publications. They choose to do that. With today's easy publishing software it should be a breeze to create a digital version of any magazine. They don't need a new team to recreate the magazine. They just need a couple of people to rearrange the layout and create links to different pages and advertisements.

Publishers don't need my demographic information at all. They don't get it when people purchase their magazines from news stands. The iBooks store is just another news stand. When I subscribed to magazines in the past all they got was my name and address and a payment. If they wanted to pay a company to do data mining to learn more about me then so be it. I didn't ever give them details about myself. Apple doesn't need to give publishers any information about me either.

If companies want demographic information then they can just do surveys the way they've always done. Doing so on an iPad would give them instant information about the people who willingly filled in the information. I'm amazed at just how short sighted and stupid some large corporations can be.
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