Upstart service offers to sell magazine articles like iTunes sells music

A new web-based service modelled after iTunes is in beta testing to sell magazines piece-by-piece. Using Maggwire.com customers will be able to select a “channel” (like “politics” or “entertainment"), then get "premium" content from a series of "relevant" magazines, for, say, $1.99 a month, with an additional 99 cents per magazine that they want to add to the package. Maggwire would get 25% of the purchase price; the publishers would get the rest.

According to an article the New York Observer, Maggwire was started by three, former Wall Street investment analysts in their mid-20s, who left Deutsche Bank in July to start the company and raised initial working capital from family and friends. Right now, Maggwire is a free aggregator of articles from more than 650 publications, but says it will soon offer the premium service.

“We’re going to do for magazines what iTunes did for music,” [co-founder Ryan] Klenovich said.“The biggest threat to magazines is not competition from within the market, but with other forms of media....”

“The pricing has to be inexpensive to get users to adopt this in mass numbers,” Klenovich said. “That’s how iTunes became so successful at first—because the pricing was simple,” at 99 cents apiece for most songs.

The comparison with iTunes may be apt in all but one way; purchasers of individual cuts or whole albums through the online music service usually intend more than one-time use; one wonders whether the same will hold true to individual magazine articles.  We also know how well iTunes turned out for the music business...