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Publishers should travel light

Next Issue Media’s recent launch of six new tablet titles on its Android-based Newsstand is a reminder of how important it is to stay nimble and experimental in the tablet market, particularly at this early stage of the game, writes Sanjay Sarathy.

By Sanjay Sarathy

Like so many publishers, Next Issue Media, a consortium of publishing giants comprising News Corp, Condé Nast, Time Inc, Meredith and Hearst, have wearied of throwing money at their websites while digital revenues fail to impress.

A Vindicia client, they now employ SaaS billing. One of the key advantages that gives them is the flexibility to significantly alter the revenue model as their business demands, and to start again, without having to tear down the billing platform.

Increasingly, this is a significant consideration. The ability to experiment with pricing, to respond to customer needs, and to do so quickly and affordably will play a big role in how digital publishers survive going forward.

As they make their way in the tablet market, where the value of readership and advertising can only be surmised, publishers value the flexibility to swap and change pricing in line with changes in customers’ behaviour.

In Next Issue’s case the objective was to enter the tablet market while avoiding the 30 per cent cut Apple demanded – a barrier, it should be said, Apple is starting to lower. It also wanted more control than Apple would deliver over access to its own customers’ details.

So Next Issue Media created a digital newsstand for tablets using the Android operating system, on Samsung Galaxy Tabs. This has allowed the consortium to build an API integrating the Android sales platform into its own subscription system. Six preview titles have been available for a few months now, and on June 29th the consortium announced six more.

Next Issue’s billing platform allows them to offer readers free access to titles for the first month, followed by separate prices for each publication. The consortium can also experiment with promotional bundles across the family of titles, already offering special pricing for existing print subscribers. And as international editions of magazines are added, Next Issue will be able to take on the new currencies and taxes, without re-building the billing.

It’s notable that Next Issue are making their way so deliberately in a market they estimate will be worth US$1.3 billion in incremental tablet revenues in the US alone. Research they commissioned earlier this year found subscribers and non-subscribers indicated “significant demand for interactive periodicals” (Source:  A new Digital Future for Publishers? By Oliver Wyman).

It predicted that good tablet publications could yield over US$3 billion in circulation and advertising revenue for the domestic US industry by 2014. Even after accounting for the cannibalisation of print, this would yield US$1.3 billion.

The report underlined the need for business models to change: “It is clear that entire organisations and the overall publishing business model will need to come under review. A successful transformation will profoundly alter the way magazines and newspapers are viewed and consumed, and enable the publishing industry to profitably embrace the shift to a digital world,” it said.

Since then, Next Issue Media’s CEO Morgan Guenther has upped the ante. Referring to the report’s findings, he has said: “I think that estimate was a little conservative, given the interest we’re seeing from consumers in subscribing… This is one of the best times to be in the magazine business.”

Having spotted the potential, Next Issue Media has grasped the nettle, maximising the flexibility of SaaS billing to get ahead of competitors in this new tablet space. They’ll add new titles, go global, and expand on to Apple’s iOS system when the time is right for them, implementing their strategy incrementally, without prohibitive overheads.

Bloomberg, Turner, Vimeo and Boxee, are among the other media players also taking the SaaS route. As digital leads publishers in new directions, they’re finding it’s a good idea to travel light, to follow readers wherever they may take you.

Note: Next Issue Media’s new tablet titles include Meredith Corp’s Better Homes & Gardens, Hachette Filipacchi Magazines/Hearst Magazines’ Car and Driver, Time Inc’s Sports Illustrated, and Condé Nast’s Glamour Vanity Fair and Wired. They will join inaugural titles Esquire, Popular Mechanics, Fitness and Parents, Fortune, Time, and The New Yorker.