Will iPad’s Magazine Subscription Model Work?

It was recently announced that Apple is close to releasing their magazine subscription model for the iPad. Talk of this platform has been swirling for quite some time with both sides arguing over terms. Magazine companies are saying that collecting information from users is crucial to generating repeat business while Apple is convinced that users should be allowed to opt-in with such data. The magazine companies have also scoffed at the idea of losing 30% of revenue directly to Apple, which is understandable.

Ultimately I believe Apple will come out on top, not just because of their history of winning, but because magazines need the iPad more than the iPad needs magazines. It is no secret that print is declining and this would be an opportunity for magazines to up their profits.

A little while back I wrote about why I’m not too impressed with current iPad magazines. Launching of a subscription model will likely not change my opinion. Here’s why:

Consumers have shown hesitance in paying newsstand prices for a single issue of an iPad-based magazine. Even if you are receiving the same content the feel and “perceived worth”of a digital version of a magazine is way less. Thus, a subscription model would hope to gain more users by charging $20 for a year as opposed to $4 for an issue.

I still have doubts that consumers will be willing to pay subscription prices for digital magazines. This is backed up by intuition rather than research, but please share if you have data. Much of advertising relies on perception (in regards to pricing). It is not necessarily what you are selling that matters but what it is perceived you are selling that dictates price (sure there are many instances where this is not the case).

I feel that iPad magazines give off the perception of a blog more than a print magazine. For the most part, blogs are free, and that is generally why readership of certain ones is so high. If Mashable put a price tag on using their site, the user base would likely drop tremendously.

I think a more worthwhile investment would be to investigate a different ad platform for iPad based magazines. Why not look into integrating web-based ads into each issue with a pay-per-impression model? This would be tricky given that the iPad doesn’t have to be online while reading a magazine, but could potentially work. There are surely other ways that iPad magazines could gain profit based largely on advertising as opposed to ads and subscription fees.

Digital sales have worked for e-books, but a book and a magazine are different entities. The question shouldn’t be “How can I mimic what worked in print digitally?” but rather “How can I adjust what has worked digitally to my previously print-based content?”.

14. January 2011 by Alex Trevisan
Categories: Mobile, Social Media | Tags: , | Leave a comment

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