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Digital subscriptions – no investment, no sales

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Comment by Tim Dawson.

The publication of the first audited circulation figures for digital magazine sales did little to make the case that online subscriptions are the future.  Only two magazines have sold more than 1,000 subscriptions – Men’s Health and Hello!  And neither of them had sold enough to give much cheer to those who mourn the forests of trees needed to feed the UK’s magazine habit.

While these figures do demonstrate that magazine buyers are unlikely to migrate to digital subscriptions unprompted, I don’t believe that they are conclusive evidence that there is little or no market for such products.

Anyone who has ever worked in a magazine subscriptions department knows what hard work it is making sales.  Direct marketing campaigns are poured over for their response rates; staff are deployed up and down the country to pursue ‘product sampling opportunities’ and the postal details of ‘prospects’ sifted from muddy streams of personal data like nuggets of gold.

It is hard to find a single magazine in the UK that has deployed similar efforts to sell their digital editions.  Indeed, most appear only to have been drawn to the notice of readers when ‘house’ advertisements were needed to fill empty space. 

Very few fingers are needed to count the number of publishers that have put much effort into their digital editions.  The vast majority are selling facsimile editions produced and sold by third parties on their behalf. 

There are two consequences of this state of affairs.  The first is that the market remains wide open.  Anyone who thinks that they could make a decent fist of online magazine sales should either get into the market now – or be knocking on the doors of the big publishing houses to make their pitch.

The second is that, for the time being, News International’s paywall remains the only seriously resourced attempt by a mainstream consumer publisher  to create a product that is good enough to persuade consumers to part with any money.  Looking at The Times iPad edition the other day, I was reminded of what a brilliant product it is.  Whether it is paying for itself, as some at News International suggest, is hard to say.  It is such a pleasure to use that for the time being it is the benchmark.

No doubt we will be consuming printed magazines for many years to come.  It is hard to believe that the sector will not continue to witness a slow decline in sales – particularly on the newsstands, which appear to have been particularly hard hit in recent times.  If publishers want to see their titles really thrive in the future, they will have to find new ways to make sales – and that will require imagination, hard work and investment.

Digital ABCs at August 2011

Men’s Health ; Natmag Rodale : 1,746

HELLO! ; Hello! Ltd : 1,165

Stuff ; Haymarket Consumer Media : 981

Esquire ; Hearst Magazines UK : 825

Harpers Bazaar ; Hearst Magazines UK : 622

Wired ; Conde Nast Publications Ltd : 622

GQ ; Conde Nast Publications Ltd : 574

Tatler ; Conde Nast Publications Ltd : 359

House & Garden ; Conde Nast Publications Ltd : 351

New Scientist – US/Canadian Sales ; Reed Business Information Limited : 349

Autocar ; Haymarket Consumer Media : 348

Cosmopolitan ; Hearst Magazines UK : 259

Vogue ; Conde Nast Publications Ltd : 185

Four Four Two ; Haymarket Consumer Media : 178

World Of Interiors ; Conde Nast Publications Ltd : 168

Conde Nast Traveller ; Conde Nast Publications Ltd : 102

Written by Tim Dawson

September 12th, 2011 at 3:51 am

Life after digital dependency – Hamlet’s Blackberry

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Photo by Joeshoe (Flickr)

Review by Alex Klaushofer.

Summer 2011. I’m sitting in the garden with a book on one of those still, warm afternoons that are perfect for outdoors living. But something keeps tugging at my consciousness, and I’m finding it hard to concentrate. After a moment, I realise the anxiety has something to do with my e-life; a sense of something left undone, or more needing to be done. I’ve been on the computer all morning, have dealt with my email correspondence, tweeted and sent a LinkedIn invite or two. Yet still there’s this sense that, rather than being in the here-and-now, enjoyably immersed in my chosen activity, I should be back at the screen, initiating more communication or checking to see if someone is trying to communicate with me.

The phenomenon of digital dependency is the central problem addressed by William Powers in Hamlet’s Blackberry: A Practical Philosophy, a book published in paperback for the first time in the UK tomorrow, although it’s been out a year in the States. It’s publication comes the week after a new survey by communications watchdog Oftel finds that over a third of British adults consider themselves ‘highly addicted’ to their smartphones, along with 60% of teenagers.

Powers is a US-based technology journalist with a philosophical bent, and his book – the very one I was trying to read the afternoon I detected my own digital dependency – diagnoses a culture infected by ‘digital maximalism’, the unconscious assumption that the more we are ‘connected’, the better.

What distinguishes his analysis from other recent publications, which largely deal with the impact of digital technologies on social behaviour, is its focus on how, if unchecked, they can lead to the loss of inwardness, or what he calls ‘depth’. Building on a natural human craving for more and more stimuli, the development of a ‘digital consciousness’ means we get less out of life rather than more.

In one particularly clear example, he recounts how he called his mother on his smart phone while on the way to visit her, rejoicing in his new-found ease of communicating with a loved one made. But the true joy of the conversation, he goes on, only comes about in the pause for reflection that follows it – something precluded by the rapid switching and multi-tasking that so often accompanies the use of digital technologies.

To counteract the development of a digitally-induced short attention span, Powers calls on some great thinkers to give lessons on how to live well in hyperconnected times. Thus – rather in the manner of British philosopher Alain de Botton – he derives distance from Plato, detachment from the crowd from Seneca, and positively-motivated self-denial from Benjamin Franklin. Thoreau is recruited to provide a 21st-century ‘Walden zone’ – the idea of the home as a place of sanctuary and simplicity – while Marshal McLuhan’s updating of the myth of Narcissus explains the particular lure technical gadetry has for humans. Following the wisdom of these ‘philosophers of the screen’, Powers’ offers his own recommendation of an internet Sabbath, observed by him and his family which involves, quite simply, going offline for the weekend.

It’s all beautifully done, with the learning presented lightly and the points made clearly. And its undeniable sagacity mean that, like the best self-help books, it’s one to return to when a top-up innoculation against digital addiction is needed. The book will stay on my shelf as a salutary reminder that we need to learn how to reap the benefits of digital technology while limiting its dangers.

In the interests of freeing ourselves from digital dependency, this will be the last blog post for August, although – in a healthy and self-aware manner – we will probably manage the odd tweet. Full service will resume in September.

Written by Alex

August 8th, 2011 at 3:18 am

Is digital revenue now the dominent source of income for publishers?

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Analysis by Tim Dawson.

Stevie Spring, chief executive of Future Publishing, says we have reached a ‘tipping point’ where digital magazine operations become more important than their paper forbears. 

Clearly, she was trying to put a positive gloss on the publishers’ annual figures – Future’s profits are down from £3m last year to £1.8m this year.
For the first time, digital revenue growth at Future has outstripped the decline in print advertising income. 

But Spring’s sense that we have reached a point where online content is the main game in town has more to it than spin.  Future is now offering 60 magazines in iPad editions, with sales up ‘tenfold’ year-on-year. 

And the Bath-based specialist publisher is by no means the only one who thinks that a year of iPads has changed the landscape beyond recognition. Forbes Media recently announced that more than half of its revenue now comes from digital operations.   

Later this week the Next Issue Media (NIM), will showcase Newsstand, a single digital platform that has been developed by some of America’s biggest publishing houses.  NIM includes Time Warner Inc.’s Time Inc., Condé Nast, Hearst Corp., Meredith Corp. and News Corp.  The application will allow users to download a single reader application from which they will be able to purchase and read titles such as The New Yorker, Time and Esquire.  Eventually 40 or 50 titles will be available.

There even seems to be a grudging acceptance outside Wapping that News International’s paywall might be at the very least a sustainable business model, even if subscription figures (reported to be around 80,000) have not set the heather alight.  Since NI introduced its paywall, The New York Times has started to charge for content viewed online, albeit they have not imposed a hard-and-fast paywall.

Dramatic as all of this is, however, I am inclined to think that it falls short of a ‘tipping point’.  In every case mentioned above, digital revenue is being used to buttress existing models.  The tipping point will surely come when some publications cease to appear as paper editions at all. Forbes, indeed, has just launched, with some fanfare, a new European edition in print.

We may reach the ‘tipping point’ very soon – when to continue a subscription to an existing publication, you have to go online.  But as I can’t yet think of a single publication where this has happened so far, I suspect that we have a good few years of paper publishing ahead of us yet.

Written by Tim Dawson

May 23rd, 2011 at 10:54 am

iPad newstand’s troubled birth

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By Tim Dawson.

Searching the Apple Store for magazines can be a frustrating business.  Not only are they not sorted in a single place, but only a handful of the magazines that you might find on even a modest newsstand are available to buy.  And when you do find them, the prices – compared to print editions -are something of a lottery.  Some charge a fraction of the regular retail price; others charge rather more.

Publishing houses are slowly entering the market – Bauer has offered an iPad version of Empire since January, BBC Magazines offers Good Food and Focus for the iPad, Conde Nast’s Wired and Vogue have been in the market since November, Dennis has several of its tech titles available through the app store, and Future has its toe in the water with T3 and a selection of special publications available. Haymarket is offering Autocar and Stuff, while IPC has launched a Wallpaper* app.

This slow progress to market, however, is emblematic of the uncertain relationship that exists between established magazine publishers and the tablet market – and there are a handful of factors that preventing a settled market from emerging.

Who’s the daddy?

Last year Apple sold more than 15 million iPads – three quarters of all tablet computers sold thus far, but the company’s dominance may be transitory.  New devices appear almost daily, and there is a broad perception that Google’s Android could, within months, be a serious rival.  A subscription platform for that system is expected imminently.

Deal or no deal

Magazine publishers’ enthusiasm for Apple took a severe knock in February when the company announced its new terms of trade for publishers.  The 30% that Apple takes was already well-known.  Less enticing was Apple’s insistence that the price in the Apple store should be as good as any offered elsewhere, and that publishers would not be entitled to data about their own subscribers.  Since building a customer base to whom they have direct access is an increasingly important element of most magazine publisher’s business model, this came as a bitter and enduringly controversial position.

A towering success

No one so far has managed to make such a success of an iPad publication.  Rupert Murdoch’s News Corp has gambled the most on publishing via the product but has, to date, yet to persuade analysts that it has been worth the candle.  Sales for the UK-based The Times and Sunday Times online and iPad editions appear to have been strong enough to keep the company interested, but not to set the market alight.  Meanwhile, in the US, figures have not yet been released for sales of The Daily.  An analysis of Tweets being genererated about its content by Neiman Labs, suggested that initial interest in the title had waned considerably after an introductory flurry.  If that is true, it mirrors the experience of publishers such as Wired and Men’s Health, where strong first-month app sales were followed by a steep decline in sales.

None of this is to say that the online magazine market will not take off, not that it is not worth investment.  The certainties that will allow a stable market to become established, however, seem a long way from solidifying.  In these conditions, self-produced, self-financed publications could gain a foothold, as the big players hang back, which in itself could make the tablet publishing market a more interesting and creative place that would otherwise have been the case, at least for now.  Those which endure, however, will almost certainly be those that are sufficiently fleet of foot to negotiate a business environment in which there is little certainty.

Written by Tim Dawson

May 3rd, 2011 at 4:59 am

Posted in iPad apps,News

IPC’s cautious embrace of digital

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Case study by Tim Dawson.

As publishers fall over themselves to unveil iPad editions, IPC has the quiet satisfaction of being well ahead of the game.  The magazine publisher has been offering online subscriptions through Zinio for seven years.  Today nearly all of its 60 titles are available through the multi-platform American distributor.

“Initially we offered online subscriptions to more tech-oriented brands, such as Webuser and Digital Camera Pro, ” says Lindsay Greatbatch, who manages IPC’s relationship with Zinio, as well as acting as publisher of Decanter.  “It is not a significant revenue stream at the moment, but it is one that we expect to grow”.

The online product’s role is probably best expressed by Keith Foster, the publishing directory of Cycling Weekly – which has around 29,000 subscribers and around 1,000 who read the magazine digitally.  “It is a useful service, particularly for overseas subscribers for whom postage is prohibitive, but we have never pushed it in the UK because online subs don’t count towards our audited circulation figures – and thereby contribute to what we can charge advertisers.”

That is expected to change next year, at which point online might become more of a priority for the company.  But, given the dramatic price differential in subscription costs, it is possible that subscriber migration might start to ring alarm bells somewhere within IPC.  A regular subscription to Cycling Weekly costs £137 – online 52 issues costs a mere £38.  The differential is not so great on other titles, but nevertheless, if readers to get the iPad mag bug, they could quickly recover a device’s cots in savings.

Zinio, which is based in San Francisco, has been in business since 2001 and offers device independent online subscriptions to around 2,000 magazines.  More than 5 million customers have so far used the service. The company is owned by Gilvest LP, an investment firm which is owned by David H. Gilmour, a hotel and real estate entrepreneur who also founded the Fiji Water beverage firm.

Publishers supply print-ready files to Zinio, which turns them into a digital product.  Interactive material and download buttons can be added, or not, as a publisher chooses.  The publisher also sets subscription costs.

The end product nicely replicates a magazine’s pages which, on an iPad, readers can turn by sweeping their finger across each page.   The IPC magazines lack the bells and whistles of Richard Branson’s Edition, for example, but are a neat substitute for space-hungry paper products.  Sales are unlikely to amount to much while the company affords its digital editions so little priority, but that is likely to change as advertisers wake up to the potential of the measurable quality of online ads.

Written by Tim Dawson

March 28th, 2011 at 4:53 am

Murdoch’s Daily doesn’t cross the pond

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Much as we would love to bring you a review of Rupert Murdoch’s iPad newspaper The Daily, we cannot.  It is not available in the UK app store, nor is there any indication that it will be.  There is a cheat to get hold of a copy – detailed here, but we are not going to admit to such chicanery.

There has been a relatively enthusiastic response from those who have seen it – thenextweb.com note that the news is a shade lightweight and it more closely resembles a magazine than a newspaper.  Ian Beteridge, in The Guardian opines that at less than $1 a week, he would subscribe.  And, Neiman Journalism Lab thinks that its success will depend on how well it meets its readers’ desire to interact with stories.

Written by Tim Dawson

February 3rd, 2011 at 3:09 am

Posted in iPad apps,News,US

First iPad newspaper launches in New York

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Today, Murdoch bets an estimated $30 million on his hunch that a new generation of iPad users will pay for an online newspaper.

The Daily, a digital newspaper made exclusively for iPad by News Corp, is available to readers prepared to pay 62 p a week for a daily dose of US-focused news and entertainment. With around a hundred journalists producing original content that will be updated once a day only, the innovation is in the delivery rather than the journalism.

Meanwhile, a bunch of New York digirati are producing their version of an iPad news app, reports TechCrunch. News.me is where social media meets news aggregation – an app that filters news from your Twitter account to produce a kind of personalised news stream.

Written by Alex

February 2nd, 2011 at 6:19 am

iPhone meets longform – with mixed results for magazine journalism

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A techy tale for our times comes from the Big Apple, where sophisticated commuters are turning to their iPhones to satisfy their craving for substantial magazine features.

They had to wait awhile, recounts Kat Stoeffel in the New York Observer, as the technology – designed to deliver only micro-bites of online info – wasn’t up to it. That all changed thanks to Instapaper, an app which takes articles and saves them in a format that can be read offline, on an iPhone.

The moral of the tale? Even time-poor, peripatetic readers want longform, and new media technologies can deliver it to them. But, with the new channels cutting out magazine publishers’ advertising revenue, the search for the right economic model continues.

Written by Alex

January 26th, 2011 at 6:50 am

Hunt for new media model doomed

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Bonnie-Brown (Flickr)

A thought-provoking assessment of what technological change means for journalism comes from Paul Armstrong of @themediaisdying.

Armstrong, who has been relaying his observations of the changing face of the media for the past couple of years via his Twitter account, has now reached a firm conclusion. The hunt for a new business model is fundamentally doomed, he argues, and those on it would be better advised to ‘stop trying to refine and redefine journalism … serve the reader not the business model’

In Armstrong’s view, the digital revolution is shaping a future where readers increasingly demand personalised news and consumer info which can only be provided as aggregated content delivered by apps. As result, he says, efforts by many in the media industry to find ways of selling long-form content through variations on traditional mechanisms are misplaced.

But it’s in the nature of changing times that no one agrees where they are going. Meanwhile, the Guardian reports on an intellectual backlash against social media in the US, where a growing number of ‘cyber-sceptics’ are arguing that, far from enhancing communication, platforms such as Facebook and Twitter are isolating and diminishing us.

And, as noted here previously, there’s even the odd rumour of a marriage between tradition and innovation.

Written by Alex

January 24th, 2011 at 5:56 am

Sail racing ‘app mag’ enters unchartered waters

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Catching the breeze: sailracing

Sail racing is possibly the first ‘back bedroom’ iPad magazine to launch – and to judge by the initial response, it looks set to blaze a trail. 

Established and self-financed by  Justin Chisholm for ‘around £10,000’, its target was to reach 10,000 views and downloads by the first week in February.  It passed that milestone nearly a fortnight ahead of schedule and, says Chisholm, the response from advertisers has been ‘very enthusiastic’.

Chisholm has been a well-established freelance journalist working for sailing titles for eight or nine years.  In recent times he has run the website offshorerules.com

“There are lots and lots of sailing websites”, he explains.  “I aimed to get beyond the regurgitated press releases that are the staple of most of them.  Offshorerules is good, but I realised that I could spend another decade working on it and I might not be generating enough page views or advertising revenue to it to make it really worth while”.  

Inspired by The Times’ success charging for apps, he decided to change tack.

The app development was undertaken by Yudu.com for somewhat less than Chisholm’s overall launch costs, and the magazine is designed Andrew Mays.  Each edition is created as a pdf, and supplied to Yudu, which converts it into the app and manages the relationship with iStore.

The first edition is free to view on a browser, iPhone or iPad, thereafter the magazine will cost £3.99 an edition.  “Initially I intend to sell single editions – until we build up enough audience and trust to sell subscriptions.  Registering for the app means that we have readers’ details so we can push a message to readers each time a new edition is available.  Apple takes 30% of the cover price.

The 79-page magazine looks a lot more like a printed magazine than websites generally do – and a very slick, professional product it is too.  Hyperlinks, slide shows, audio files and video (particularly on the iPad edition) enhance the package.  Chisholm has assembled some of the biggest names in sailing journalism, who he is paying, per article, as any other magazine would.  It also benefits from serving a sport that has both a globally audience and advertisers that market their goods around the world. 

To date, Chisholm reports, the response has been overwhelming, with over 1,000 downloads a week.  He accepts that competitors are unlikely to be slow to respond – but at his current rate of growth he might well be hard to catch once there are others jostling for attention in the iStore.

Written by Tim Dawson

January 20th, 2011 at 9:48 am