Thursday, May 12, 2011

Cheaper, faster, bigger volume: is this really the way to go with magazines?

The announcement this week that future subscribers to The New Yorker will be offered a package including both the print and iPad edition in the U.S. for $69.99 is an indication that the publisher Condé Nast hopes to make up for lower consumer prices digitally with higher volumes of circulation.
David Carr in the New York Times says this may well double the circulation of The New Yorker, but at what cost? He quotes Chip Block, a now-retired publishing executive who says that digital platforms like the iPad offer the possibility of publishers being more circulation-and reader-driven than wholly in thrall to advertisers:
“Publishers will make another mistake if they focus on advertiser rather than consumer economics for digital editions. The first priority for publishers should be to create an excellent consumer experience. If they do that with viable economics, the advertisers will follow.

Publishers lost track of that idea years ago when they embarked on a mad scramble for ad revenue at the expense of both product and circulation economics. I asked this question years ago: who put the popcorn salesmen in charge of strategy? It may be that movie theaters can make more money from popcorn than revenue from admissions, but that does not mean that the popcorn salesmen know what makes a movie attractive or anything else about the economics of production and promotion.

Publishers have consistently blundered since the 1990s by trying to fit new tech into the comfortable box of economics they have lived in for so long. Will they continue to do so? Steve Jobs and Jeff Bezos have thrown publishers a lifeline. Will they be smart enough to grab it?”
One commenter to the Carr article says it is unreasonable effectively to charge $20 for the digital edition of a magazine (the best print rate being about $50) that subscribers already pay for in print.  (It should be noted that current subscribers can register to get the iPad version at no additional charge.)
I do understand that the digital issues cost Conde Nast money and I want The New Yorker to be profitable; but there isn't really a marginal cost to making the digital version available to people who already subscribe. Perhaps, at some point in the future, it will make sense to charge a premium to receive the PRINT New Yorker; but I don't think we're there yet.

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