OPLIN 4Cast #212: Changes coming for tablet periodicals

newspaper over tablet computerThere’s a battle shaping up over the business of selling digital newspapers and magazines to users of tablet devices, like the iPad. While Apple has been selling single issues of magazines and newspapers through iTunes for some time now, those sales are beginning to decline. That leaves an opportunity for competitors (i.e., Google) to think about rival services, and how to “do it right” when it comes to selling periodicals for tablets. And that also leaves room for publishers to try to negotiate a change to the current online periodicals business model to one that is more akin to the current printed periodicals business model, namely selling subscriptions instead of issues and gathering personal information about buyers.

  • Google Digital Newsstand aims to muscle in on Apple (Wall Street Journal/Russell Adams and Jessica E. Vascellaro)  “The remaining rivalries could speed up the migration of periodicals to tablets, providing publishers with more ways to sell their titles and more control over the sales. A similar battle between Google, Amazon, Apple and Barnes & Noble has already begun to reshape the burgeoning market for digital books, helping publishers win more flexibility in pricing their titles. While many media companies have rushed to build apps for iPads and Android tablets, they say their current inability to sell standard subscriptions through iTunes, a shortage of data about app buyers and tough business terms are keeping them from investing more in the effort.”
  • What those low iPad magazine sales numbers really mean (The Next Web/Alex Wilhelm)  “Ask anyone in online sales: limiting the number of steps is the key to higher conversion rates. Therefore, to truly juice digital sales, all we need to see is an industry wide 20% price cut (from current levels), and a new method of sales. Fortunately, Apple is likely working on the second bit, with their much fabled ‘iNewsstand’ that will make it much simpler to actually pick up a magazine. It will also encourage browsing, something that will boost drive by sales.”
  • Who is more willing to trick users, Apple or Google? (TechCrunch/MG Siegler)  “So what the publishers seem to be demanding is that Apple opts users into sharing information without telling them. Or, to put it another way, ‘make it opt-out or we opt-out’. Classy. Of course few customers would opt-in to sharing such data. Because who the hell wants to be marketed to relentlessly just because they signed up for a magazine subscription? No one. Except that’s the way the magazine subscription model currently works. Not because it’s a good model, but because in the days before technology started destroying print, people were naive enough not to realize what was going on. Obviously, the publishers would like to transition that happiness in slavery to the tablet space.”
  • Rupert Murdoch’s “Daily” iPad newspaper set for January launch (All Things D/Peter Kafka)  “It will come out daily, it will sell for 99 cents a week, it will use lots of video and it will have cool multimedia bells and whistles, including some kind of 3-D effect that lots of people are very excited about. And Apple CEO Steve Jobs may or may not participate in a launch event. Most important for other media companies: The Daily is supposed to use a new “push” subscription feature from Apple, where iTunes automatically bills customers on a weekly or monthly basis, and a new edition shows up on customers’ iPads every morning.”

Revenue fact:
Apple typically keeps 30% of the sales of apps through the iTunes store, including single issues of periodicals, and passes the rest to the publisher.

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