“Magazines’ greatest weapon is their ability to describe their subscribers to advertisers, but Apple won’t tell publishers who’s subscribing through the App Store unless subscribers specifically say it’s okay. “Without the demographics, which iTunes won’t release, the print world is castrated,” said Gary Armstrong, the former Wenner Media executive who is now consulting on branded content development for media brands,” Nat Ives reports for AdAge.
“So what are Elle, Nylon and Popular Science doing, accepting Apple’s terms?” Ives asks. “For Nylon, a small independent magazine that said Apple approached it six weeks ago to participate, the advantages of a new distribution platform seemed to far outweigh the drawbacks. And plenty of subscribers will let Apple share their information with Nylon, a brand in which they’re sufficiently interested to subscribe, after all, said Marvin Scott Jarrett, editor in chief. And if they don’t? They’re still paying for the app: Good enough. ‘As long as they’re paying the money to subscribe, why should we care that much?’ Mr. Jarrett asked… ‘The cost of developing our own e-commerce platform right now would not be viable,’ he said. ‘So what they’re offering us is a great turnkey tool with little to no financial risk.'”
Read more about publishers who get it in the full article here.
[Thanks to MacDailyNews Reader “Dow C.” for the heads up.]
It’s always easy to discount the value of others’ efforts. Nylon gets that.
As an apple customer, I really don’t care about greedy companies that are more focus on making money that in making happy customers. Apple has tons of money because they focus on the costumers, not in the money. And they use that money to get better prices for its customers. Greedy companies use their money to buy private jets, big bonus, and things like that, they never worry about making a better product or service until they face competition. Apple does not wait for competition.
Greedy companies try to fight with a foreign governments wishes.
Greedy companies have sales misdirectors taking an active hand in overthrowing the established U.S. friendly governments in the middle east.
iOS users are of the same demographic as Mac users. They are smart, affluent, well educated and good looking. 50% vote left, 50% vote right. Who needs any more info?
After looking in the mirror, I was just kidding about the good looking part.
actually, all the iOS and Mac customers are from Lake Wobegone…. ‘where the women are strong, the men are good looking, and all the children are above average.’
😉
LOL
True that!..=*^)
Why? Because print is dead and a lot of us dumped our print subscriptions waiting for this to happen.
Nylon goes for $19 per year (10 issues). Let’s assume they charge $12 for the digital version of it, leaving them with some $8.40 per customer per year. hire a full-time staff at, say, $80k per year, for the development of the digital version of each issue. In order to pay for this guy/gal, they will have to sell 80,000 digital subscriptions in order to break even. Their current circulation is around 250,000. It seems to me that just the female college population could easily get them there.
Wrong math… They’ll need under 10,000 to break even, assuming they pay this person $80k per year.
Break even? Thats paying for the salary of 80K. That’s not breakeven. Benefits alone push the number to twice.
Plus, the cost of backend, servers, bandwidth, etc.
Now, you need to monitor servers, so, hire a network ops team. (No one works 24 hrs a day). Now you need a sales team to develop the online marketing reach of say iTunes.
What cost, that?
So, the return is NOT worth it. PLus, iTunes puts Nylon out there now, rather than at the end of the development phase.
Magazines ALREADY have someone else sell, market and distribute ink and paper version. All of them get a cut. No different than iTunes taking a %. I am sure that of the people who sign up, many will still opt into giving out demographics. Certainly enough to get a representative sampling of readers. Which is enough to give out to advertisers.
So, remind me again why, in this day and age, there’s no value in having Apple market, sell and distribute?
…”Plus, the cost of backend, servers, bandwidth, etc.
Now, you need to monitor servers, so, hire a network ops team. (No one works 24 hrs a day). Now you need a sales team to develop the online marketing reach of say iTunes.”
Every magazine has IT operations, since everything they do is done on desktop computers (usually, Macs). Adding one more staff to that IT operation doesn’t suddenly require adding other IT staff to support him/her. As for sales, this is also what every magazine has, and adding an iTunes store sales strategy is part of the job of the existing sales team.
Both PopSci and Elle had said in that article that they’ll seek demographics through other means, perhaps by sending their subscribers a survey after two or three issues. There are ways to get demographic profiles of your customers that don’t require harvesting their data without consent.
This is all true and it’s actually great for the magazine since they usually don’t make much profit on subscriptions. A majority of their profit comes from add sales. If these magazines can make a profit from the subscription and make a profit from more high profile ads, ads that move and talk and such, they could make a killing.
It’s about the record companies folks. Everybody is afraid of Apple destroying their dead business model where they are in charge in favor of becoming like the record industries: just content providers, nothing more.
The only question here for the publishers should be this:
How many more digital subscriptions can this App Store model bring in and how much would it cost to build a digital edition?
My example on Nylon (above) makes assumptions for which I don’t have solid data (one full-time staffer to make digital edition). If anyone here has any connections to the publishing industry, or development of interactive magazines, please come forward and correct my assumptions (if wrong).
It doesn’t really matter if your numbers are wrong. The premise is correct. Publishers can have access to the largest digital ecosystem on the planet. Apple has done all of the leg work. They just have to pay to play.
I have. Your assumptions are fine (they usually are!) But it isn’t the main point. The costs of building a digital edition and a paper edition are not all that different. What is great about this new way of getting to customers is it takes the biggest risk out of publishing – print runs and returns. We used to have to print a multiple of what could sell. The rule of thumb was 8 to 10 times as many. That was what the distribution system said was needed. To sell 1 mag you had to put 10 into the system. We would eventually get the discounted value from that mag after months of waiting for the returns to be counted less a claw back against unknown returns. Now we can offset the hugely better margins we get from Apple (and our – much smaller – direct digital sales) against those print costs as we gradually get out of print altogether apart from print-on-demand. It is a fabulous deal.
So why are the big houses moaning? They make money selling lists. Not analysis, or demographics just lists. Hey buddy, we sell our mag to teenage girls, want a list of 10,000 teenage girls’ addresses?
Yup. I don’t want my info shared with advertisers. I get enough junk in email (and regular mail) as is.
What we seem to have forgotten in this mix is that Apple offers an ad service, with payback to the app owner. What might be the impact of iAd on the magazine? Free targeted ads without the need for a sales force or anything other than a cash receiver. Shouldn’t this feature be the elephant in the room?
Locutus wrote:
“actually, all the iOS and Mac customers are from Lake Wobegone…. ‘where the women are strong, the men are good looking, and all the children are above average.”
LOL – True that!…=*^)
There is one thing here that worries me the most. According to our insider, Childremass, big magazines make a large chunk of their money by selling their subscriber lists. This component of their revenue will be automatically gone (or severely diminished, if some people opt in). What worries me is that in order to get attractive content to interested public, the whole magazine industry will have to reorganise the business model in order to make it sustainable relying much more on content sales than ad (or subscriber list) sales. How many good magazines will actually survive this type of reorganisation?
It’s not as if they can’t still sell ads, good ads to make up for this list selling thing. They can even have more leverage with the companies they sell adds to. They can show them hard numbers saying exactly how many people read a digital edition etc. Thats way better then projections of how many people *might* see those ads. I think you could easily charge a bit more for a digital ad that moves and talks and is sent to a known number of folks.
Maybe eventually they could even work something out with Apple to use those iAds which have been reported to be so profitable.
I think you have it with the word ‘good’. They will survive because they have content that has worth.
Why are people so slow?
All an application has to do is ask for the user to save critical details about himself on the device in the app settings. Tell them it is so teh can customize the content for them.
In each issue offer to sell and ad to a vendor which will pass on certain pre chosen details if clicked up. They might even alert the iOS user of which details will be sent to the vendor if requested.
One lick by the user satisfies everyone and makes for zero unwanted SPAM. The content provider makes money for motivating the user to contact the vendor. Done right this could blow Google away by making everybody happy without stealing private data like Google does.
I hope this congress passes a law making this the preferred model for eCommerce while banning the storage of user data in browsers if you select DO NOT FOLLOW ME.
Google will need a new business model.
do you remember sending your age, income, gender and interests to paper magazine when you subscribed? How is the print world castrated again?