New life – and revenue opportunities – for digital magazines
The digital magazine – that historically maligned print/web hybrid – may finally be coming of age.
The rapid erosion of print circulation, combined with the increasing popularity of electronic readers and the cultural embrace of green-friendly solutions, are convincing many publishers to re-think their approach to digital publications as a potential revenue driver.
There’s plenty of ground to make up. Even though digital magazines have been around since the early 1990s, they have never made much of an impression on readers or advertisers. Yes, there’s a legitimate long tail of ultra-niche “e-zines,” but the format has been more of an afterthought than a core offering for many print publishers.
Part of the problem has been a poorly defined business model. From the editorial side, most digital editions are simply replicas of the print magazine, with little added value for readers. On the sales side, advertisers have shown little interest in paying a premium for digital editions that have minimal penetration into the target audience.
Some publishers have moved to the digital format out of necessity, as rising print costs and plummeting ad revenues turn once-profitable print publications into money pits. “Many publishers launch digital editions because their economics are failing,” said Josh Gordon, president of Smarter Media Sales, a publishing consultancy. “They can’t support the printing, so they go to a digital edition. But a failing formula in print will fail in digital as well.”
Now, some publishers are starting to explore new opportunities with digital platforms for engaging readers and serving advertisers. Beyond the obvious cost advantages over print, digital publications offer several potential benefits that publishers could turn into revenue-generating opportunities, including:
Interactivity: There’s an obvious play for adding rich media to digital publications (in articles and ads), beyond basic text links. Flash animations, audio, and video are becoming more popular as publishers create original content to augment print articles. The March/April issue of Technology Review’s digital edition, for example, featured 16 embedded videos – the first use of video in the seven-year history of the magazine’s digital version, said Heather Holmes, the MIT publication’s vice president of circulation.
“More publishers are embracing the need to design for the medium,” said Rich Maggiotto, president and CEO of Zinio, which offers approximately 1,500 titles through its digital publishing platform. “We’re seeing a lot more use of video, audio, and Flash to bring the editorial and ads to life.”
There’s a growing social component as well, as publishers integrate link/share/post buttons into their digital publications. In a May 2009 Texterity survey of nearly 34,000 readers of digital magazines or newspapers, 91% of the respondents said they had taken some action regarding the editorial or ad content after reading a digital publication. The top three responses: 56% discussed an article or ad with others, 51% said they had looked at the advertiser’s website, and 43% said they had emailed content to a friend or colleague.
Portability: The Kindle and other electronic readers could address some of the criticisms around digital publications’ lack of portability. (Not that you want to take your Kindle to the bathroom … but you could.) PC Magazine, the venerable tech enthusiasts’ publication that ended its 27-year print run in January, is preparing to launch a Kindle version of its now digital-only magazine. “We want to put the digital edition anywhere the readers are,” said Steve Sutton, chief operating officer at Ziff Davis Media, publisher of PC Magazine Digital.
Searchability: Publishers of established titles are discovering the value of making past issues available to readers online, enhanced by the ability to search for long-hidden content through search engines and within the digital editions. “For the first time, publishers can start to really monetize their archives,” said Maggiotto.
Archives are a logical play for digital replicas of the print edition. But most will agree that real growth potential in the market lies in what Gordon calls “designed for digital” publications that include value-added functionality and original content. (The Audit of Bureau Circulations is now distinguishing between these two types of digital publications. Beginning in June, the bureau is allowing publishers to report paid digital magazines in one of two categories: “replica,” where the advertising and editorial content are an exact match of the printed publication, and “non-replica,” where the basic identity and content are similar to the printed edition but the articles and advertising may differ.)
The non-replica model represents a compelling opportunity for a publisher to carve out a legitimate place between its print publication (if it still has one) and its website – and capture new revenue opportunities along the way.
“It’s really about understanding your audience and the value that a graphically enhanced reading format brings to them,” says Gordon, who recently launched a project (co-sponsored by Zinio and Nxtbook Media) to study the experiences of digital magazine consumers. “What can you deliver in a magazine format that will attract an audience when you’re competing for their attention against websites, newsletters, webinars, and microsites? And what characteristics of that audience experience will be of value to advertisers?”
The insights culled from those types of questions could lead to a dramatic remaking of the digital publishing space.
“A few years from now,” says Sutton, “they might not even be called magazines.”
Additional resources – digital publishing platform providers: