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Contenders for the Title 'The Netflix of Magazines' Emerge
Posted On March 24, 2015
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Zinio is another multiplatform distribution system for magazines. It was founded in 2001, and in 2008 it partnered with Barnes & Noble as one sales outlet for offering magazines at prices as much as 90% less than newsstand prices, along with access to digital back issues. Today, the company offers more than 5,000 magazines on a subscription basis. In 2014, Zinio acquired Audience Media S.L., a multichannel publishing system producer, “significantly expanding Zinio’s mobile app offerings for its magazine publishing clients.”

Zinio’s executive VP of chief global markets Joan Solà says, “Bringing the unique capabilities of Audience Media into our organization gives Zinio the opportunity to deliver the best mobile experiences for consumers seeking individual branded apps or Zinio’s aggregated ‘all in one place’ experience.” Articles can be downloaded and read offline on mobile devices or shared on Facebook.

Pilkington sees “a couple of standouts right now in the digital industry. I like all of them for the innovations they’re continuing to push for. Zinio is one of the standouts in terms of offering a wealth of content to choose from and for offering it to libraries at affordable rates so they can offer the savings of digital subscriptions. But don’t overlook the great work that digital newspaper apps are doing; PressReader is my go to newspaper app since they offer almost 4,000 different titles from around the world.”

All of these services have attracted significant participation from subscribers and publishers, with both groups hoping for better experiences. Subscribers want the ability to access information and content from the world’s presses as easily as they now get other types of media experiences.

Bringing Magazines to Life Online

“Magazines by their nature are very visual formats, in that they are photo, illustration and color heavy,” says Chris Lederer, a principal at PwC who leads the strategy practice in its entertainment, media, and communications sector. “This content comes to life in the color displays that are now standard across all devices. So, firstly, magazine content is a natural fit with digital screens. Secondly, the migration of magazines to digital readers has had the benefit of learning from the book publishing business. Many of the trials and tribulations that came with the e-book—digital production problems, multiple and costly file standards, changing distribution partners, etc.—are issues that the digital magazine business did not have to experience. Lastly, the digital magazine business is not a success story quite yet. Digital subscriptions are growing more slowly, as are digital ad rates for magazines. The verdict is still out on how big the digital magazine business will ultimately be.”

Wilson sees issues ahead for the industry, but opportunities as well. “I think publishers see their tablet sales not as a central revenue driver currently, but as a place they have to be present and have to experiment in order to be prepared for future content consumption trends. And no one knows what those trends will be for sure. I would also note that Apple, as a leading iOS for mobile and tablet magazines, has created in its Apple Newsstand a system that has done everything to stifle growth in the digital magazines. A better platform for digital magazines—one less-walled off and one better aligned with the open web needs to be developed.”

Kerner sees personalization as the next major development issue. “Giving users the choice to discover content that they’re interested in and passionate about in a meaningful way, is something you’ll see a lot more of through the end of the year.”

Digital Consumer Magazine Circulation Expecting Huge Growth

In a recent study, PwC predicts, “In 2015, the magazine publishing industry will reverse years of decline.” It says that the fastest growth will be in “digital consumer magazine circulation revenue,” which will reach $5.7 billion in 2018. “Currently advertising is [centered] on magazine websites, but, as digital circulations increase, electronic editions will become increasingly popular for advertisers.” (Click on the charts on the right-hand side of this article for more information. These images are courtesy of PwC’s “Global Entertainment and Media Outlook 2014-2018.”)

“There are several emerging leaders in the digital newsstand space and most of the large legacy magazine publishers have chosen partners in this regard,” Lederer says. “In addition, major private equity firms are investing in these businesses as they are betting on the long-term value migrating to these aggregators. For the consumer market today, these sites are still building awareness and not widely known by non-tablet owners. The services that build the best and most comprehensive library of titles, and the one that build broad consumer awareness first, will have the best chance of success.”

In Bloomberg Business, Joshua Brustein writes, “Millions of people are more than willing to pay for steady access to streaming content. Netflix counts 50 million subscribers to its online video library, and Spotify has 12.5 million listeners ponying up a monthly fee for a massive buffet of music. For magazines, however, the idea of paying a flat fee for unlimited access hasn’t caught on. The idea of banding together into a Netflix of magazines isn’t untested, just unpopular.”

“Mobile is an issue for many reasons,” Lederer explains. “Publishers are racing to catch up with the market to create mobile content experiences; they are struggling to provide measurement metrics that appropriately attribute a full view of print plus digital delivery; and their sales team are not properly incentivized to sell low priced mobile inventory. Like other digital platforms, mobile ads will quickly move to programmatic which will further aggravate price levels.” Will the rise of sophisticated, well-designed, and price-conscious platforms for accessing magazines finally provide the spur that the industry needs for digital success?

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Nancy K. Herther is a research consultant and writer who recently retired from a 30-year career in academic libraries.

Email Nancy K. Herther

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Comments Add A Comment
Posted By Thad McIlroy3/25/2015 3:01:23 AM

I'm stand by my comment that "the shift of ad dollars to the web is the biggest problem facing broad-circulation magazines today." The pwc figures are terrifically encouraging, as large consultancy figures tend to be. But they obscure the main issue: publishers are still having a very difficult time "monetizing" their online iterations. The subscription services have not panned out, Apple's newsstand has not panned out, and apps have failed for most publications.

The average periodical remains enormously challenged in making the business work online.

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