Magazine publishers divided over giving digital issues for free

Magazine publishers divided over giving digital issues for free

Summary: Giving away digital magazines for free could be a backwards and detrimental step for the publishing industry.


SAN FRANCISCO -- Offering full, digital copies of magazines on tablets for free to existing print subscribers is a critical misstep, basically destroying economic model for publishing, according to John Loughlin, executive vice president and general manager of Hearst Magazines.

"We are at a critical juncture for magazine publishers to reassert value of content, and that value needs to be paid for," argued Loughlin, while speaking during a panel discussion about the future of publishing at the Open Mobile Summit on Thursday.

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The debate stemmed from two different models for promoting magazines on tablets. On the one side, there is Hearst, which charges for digital and print copies separately.

On the other side, you have major publishing houses like Conde Nast and Time Inc., which are offering digital copies of their magazines on the iPad for free to print subscribers.

Time Inc.'s senior vice president for consumer marketing, Nate Simmons, posited that the concept is similar to Time Warner's TV Everywhere platform, but that this is just "magazines everywhere."

"If you're a print subscriber, you've paid for it once," remarked Simmons, "You shouldn't have to pay for it again."

David Payne, senior vice president and chief digital officer for Gannet Co., debated that this model is really just about supporting and keeping the core properties (i.e. circulation revenue strong).

But Loughlin didn't buy it, arguing that consumers are willing to pay if the value is there. He offered several examples to parallels in other digital content industies, such as if you buy a movie ticket, that doesn't mean you get the privilege of streaming it a few days later, or if you buy the hardcover version of Steve Jobs' biography, you don't automatically get a digital copy for free.

"At this juncture, we're not allowing accessing of content electronically just because you paid for print yet," said Loughlin, adding that the model is "definitely working" for Hearst, and that he would be surprised if the monthly digital circulation rate didn't reach 500,000 by the end of the year.

Nevertheless, there is room for potential branding and attracting customers by offering content -- even snippets -- for free.

Scribd CEO and co-founder Trip Adler noted that sometimes publishers will put a book up on Scribd, the content will go viral, and then people who like it can easily purchase the book from e-sellers like Amazon.

"It's just a way for users to benefit from having a better consumption experience for that content and make it more social," said Adler, adding that this is the first step in something much larger as mobile advertising has still not evolved enough yet.

He also argued that it's important for users to pay, but that when it comes to magazines, the user experience hasn't evolved enough yet. Compare that to music, where Adler picked out Apple's iTunes and even newer subcription-based services like Spotify that have changed that industry.

Loughlin conceded that a one-price-for-all-you-can-read model is an interesting concept, but he worried that it's hard to get the numbers to add up.

Using the example of two differently priced, digital versions of the Good Housekeeping Cookbook, the more expensive version that incorporates video is selling two to one.

"It supports your assertion that in certain categories and certain experiences, if you can demonstrate substantially more value, you can command it," Loughlin asserted.


Topics: Hardware, Laptops, Mobility, Tablets, Wi-Fi

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  • Quadraditic Equation problem

    If you subscribe to the print you should get the same base info online.

    If you want EXTRA items that only come online, then should pay for print + extra and get both

    If you want ONLY online basic then you should pay less than a print (cheaper to deliver) and get the same content as print

    Then if you want the EXTRA online only then online sub + extra cost (same as print +extra) and get it all online.

    Use all of the above to get the revenue goal needed to keep the business running.

    You can ONLY give away content for a short while before going broke.

    One size DOES NOT fit all.

    Remember, people getting info online ARE paying OTHER costs in order to GET it via online and they always factor that costs into any online only subscription.

    And the extra items that come online really MUST pass the cost / value test that everyone has. If it only costs $2 more a month to have the extra value and they get something out of it three or four times a month, it will usually pass the value test.
  • Sell The Scarcity

    Basic economics: some things are "scarce" (in limited supply) and are worth charging for, other things are not. Abundant Internet bandwidth allows digital bits to be distributed at essentially zero cost. Therefore a business model based on trying to control the distribution of those bits is a waste of time.

    Content publishers are suffering from this, it is true. But content <I>creators</I> need not. The Internet offers them new opportunities to ply their business without going through the traditional distribution channels.
  • RE: Magazine publishers divided over giving digital issues for free

    First they try to position themselves as content suppliers, the content is what's important to be paid for.
    Then they shift to the format being more important than the content - you should repay for the same content in a different format.
    Cost of production and delivery, of course, don't enter into the equation.
    Businesses seem to be scrambling to "monetize" individual user access to info on the web - the old something-for-nothing business model.
    Content providers really need to get their acts together and come up with model for delivery that doesn't charge extra for using the "free" internet to access content you have already purchased under a different delivery method.
  • RE: Magazine publishers divided over giving digital issues for free

    My feedback is related to selling digital versions of the print magazine. Offering a digital version for free with print will not work. Why? The distributors of digital versions (Apple Newsstand, Nook, Zinio, etc) are expecting compensation to the tune of 15 - 50% of the digital issue cost. As more "distributors" manage a single digital product; the publisher will be cutting checks right and left to the distributor; eroding away at the revenue generated from selling the print subscription. Something has to change with the way "distributors" are compensated before a model like this will work long-term. I'm hoping a middleman will come into play (managing all of the distributors and their expectations for revenue from a single digital product; still assuming we are discussing digital versions of the printed magazine).
  • digital magazine publishing

    Everywhere you turn these days it seems that digital magazines are popping up. From cars to travel to women's lifestyle, digital magazines now exist for every subject area.

    <a href="">digital magazine publishing</a>