Bonnier shopping iPad app maker Mag+?
Mag+, the Bonnier spinoff that powers more than 100 media tablet apps, is being shopped either for sale or additional investment, according to sources.
The Mag+ service, which powers the iPad apps of such brands as Popular Science, Maxim, Outside magazine and MacWorld, has distributed a book on the business that describes 2011 revenues as close to $1 million and EBITDA close to a negative $6 million, according to information reviewed by eMedia Vitals. Approximately $3 million of the 2011 expenses were consultant fees whose cost will not be borne in future years.
By shopping Mag+, Bonnier may be hoping to cash in on recent M&A activity in the digital media services sector. Last year, RR Donnelley purchased Libre Digital for $19.9 million and Journalism Online for $19.6 million. In the startup world, Onswipe, an HTML5-based tablet startup, has raised more than $6 million in venture funding, according to Crunchbase.
Bonnier would not comment directly on questions about whether the company was shopping Mag+. "Bonnier Group is long-term committed to Mag+ and is very pleased with the progress of the rapidly growing market for digital publications on touch-screen devices," CEO Ulrika Saxon said in an email. "Ever since the launch of the first Mag+ issue of Popular Science in April 2010, numerous investor proposals have come to our attention, but as stated since the start, Bonnier has a long-term commitment to this asset and its tremendous potential."
In a phone interview, Mag+ CEO Staffan Ekholm also declined to comment on the business's financials, but said he is "very optimistic when it comes to tablet publishing."
Asked how Mag+ intended to win business in a marketplace dominated by Adobe and Woodwing, Elkholm said, "Our philosophy is that you need to be native to the canvas that you are working for. Our position is to become the easiest and most flexible solution in the market."
Mag+ has several upcoming product launches to extend its platform, Ekholm said. They include:
- Support for the various screen sizes of Android tablets
- Support for the Kindle Fire, expected in the next few months
- a separate iPhone client - not a resized version of existing Mag+ apps - for which Mag+ will provide tools to help take app concepts from design to launch.
Mag+'s approach to the marketplace seems to reflect the dot-com land-grab mindset of the 1990s. "As a startup, we need to try to be disruptive," Ekholm said. "It's more important for us to grab market share in 2012 and make money off of those customers via service agreements, because in a few years, the competitive landscape is going to be different."
Mag+'s marketing approach to the publisher marketplace has been aggressive and innovative, especially the company's use of freemium pricing. Mag+'s app development tools are available for free, but payment is required when an app is ready to launch, providing a no-risk business solution for prospects. Pricing is also affordable: a $2,500 to $3,000 one-time fee and $500 per issue thereafter, or $3,000 per month for large publishers. (UPDATE: Mag+ called to our attention their $199 pricing tier as well.)
"We can be different pricing-model-wise and business-model-wise," Ekholm said. "With Adobe, you pay up front and you are committed to their platform."