Selling the Digital Edition
by Marcus
Thursday, May 8th, 2008
We’re at an interesting point in the evolution of the digital magazine. Despite the fact that people like Peter Meirs and Michael Turro are insisting that digital magazine don’t work, more than 13,000,000 readers are enjoying more than 3,000 digital magazines.
And when you have that kind of critical mass, you attract advertising dollars. At last count, 34% of Nxtbook publishers are selling into their digital edition - not just using it as a cost reduction tool, but as a revenue generation tool. Along the way, some of them are reporting hundreds of thousands of dollars in revenue.
To help these publishers, we’re pleased to release our 2008 Digital Revenue Generation Guide. A slimmer volume than the Best of Nxtbook, the Digital Revenue Generation Guide is designed for publishers to take to advertisers. There’s even a section for the publisher to add their own pricing information.
None of this means that digital magazines won’t continuously evolve. But the human race didn’t just appear out of nowhere and neither - I suspect - will the magazine of the future. When it comes to technology, I’d bet on the evolutionists over the creationists any day.
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Marcus:
I wouldn’t say that I am “insisting that digital magazines don’t work” - I just don’t see digital replication of print ever being a primary revenue generator. There may be a place for them in the mix, but they’ll always play second fiddle to print or a native digital approach - one that doesn’t ape the print vocabulary.
Let’s be fair, I merely insist that facsimile digital editions are not an effective revenue producer for consumer magazine publishers. Digital magazines require additional resources and until distribution reaches a number high enough to get the attention of advertisers and displaces enough print, paper and distribution costs this model yields negative ROI. If you look at the demand curve for digital editions and online magazine content over the last five years you’ll agree that consumers clearly prefer the website experience. Publishers must make a choice where they invest their digital dollars and traffic in the millions vs. (the low) thousands makes that choice obvious. I challenge the digital magazine supplier community to provide a product that will attract consumers in volumes that are met today with plain old magazine websites. Digital editions have great value for sampling and marketing but please (and I am speaking to other digital providers here as well) don’t keep insisting that it’s going to scale to become a viable alternative to paid print subs.
Michael & Peter,
Thanks for your comments. You know we appreciate them.
Michael - I’m not certain anything will be a “primary revenue generator” in the future. We’re entering an age where everyone wants their media their way. Because digital magazines can be created with very little work on the part of the publisher, I think that creates viability for them in the publishers’ world.
The circulation side of the business has existed this way for years with many techniques, all providing enough results to make them viable. I see digital magazines doing the same for revenue (along w/ mobile, web, e-mail, etc.). Publishers need strategies for all of these — and digital magazines are one of the lowest cost/effort ways to handle that branch of a strategy.
Peter - I’m personally on the fence about the viability of digital magazine being scalable for large circulation consumer titles. As you know, my presentation this week focused much more on the viability of custom publications for the large scale consumer publisher. However, I would disagree with you on one point: one of the reasons that they HAVE been so successful in the B-to-B market is because they can be launched for a fraction of the “resources” (both money and people) than required by a website. Indeed - many B-to-B publishers have gone to the digital edition because it’s simpler and cheaper than a robust web strategy.
Thanks,
Marcus
Marcus,
I guess we never reached the threshold where net (digital) revenue exceeded the additional costs for securing digital rights, marketing, promotion, production, IT auditing, transaction fees and hosting. We would have needed to sell a lot more subs than we did to show a positive P&L.
NXTBook and others have convinced me that this is a viable strategy for B2B and for B2C marketing. I just think the approach to designing and monetizing consumer digital magazines should be different than it is for B2B.
Peter
Marcus:
While I agree with you about there not being a primary revenue generator in the future (at least not in the same way the magazine is today), I do have to take issue with your argument that digital editions are not much work. On it’s face that would seem to be the case, but I can’t help but feel that the very thing that makes them “easy” is the very thing that ultimately limits their potential.
If I insist on anything it’s that simply using a print framework to build digital products is, in the long term, not a viable course of action. Stuffing concepts of linear media into a non-linear, networked, world of hypertext is kind of like stuffing the old square peg into that round hole.
The print framework, print design, as wonderful as it may be on paper, simply, tragically breaks down on a screen. While a digital edition may be a nice, short-term placeholder it will always fall short when competing with a native digital application.
Michael-
“While a digital edition may be a nice, short-term placeholder it will always fall short when competing with a native digital application.”
If true, then why are publishers seeing much higher engagement times and click-through rates with their digital magazines than they see with their websites?
Also - don’t lose sight of the fact that readership is always about the content. We’ve seen publishers do some awesome things with the technology, but the truth is that many of our highest read titles do very little to optimize the book. For these publishers, the investment is minimal, and readership and engagement times point to satisfied readers, too.
I’m no different than either you or Peter in believing the “ultimate solution” has yet to be built. The only difference is I know two things: current solutions ARE proving themselves to be worthy of revenue and circulation at many publications AND the publishers that commit to experiment with these solutions now will be well-positioned to enjoy the benefits of better versions down the road. These publishers are learning how their audiences behave differently with different online products, which helps them market different online properties to them. Meanwhile, they’re giving advertisers options, too - high exposure or high click-through, etc.
This education NOW will give them dynamic advantages as the platforms mature.
Here’s the good news: you don’t need to take a “marketer’s” word for it. Read the case studies in the Gilbane study, and decide for yourself.
You know Marcus, the more we discuss this the more I find we agree - at least on the broad outlines. I totally agree that employing a digital edition can be a very useful research and development tool and fully and fully encourage publishers to use them in that way if the so choose. I would simply caution them to make sure that they dig deeper into the digital world and really explore what is possible. I feel there is a danger that once publishers institute a digital edition they’ll stop there, feeling that they have the digital world “figured out” - especially if they have a moderate amount of success. In the long run those publishers are going to need dedicated “digital” people who speak the language of the natives. Those publishers will need to have staff who understand the alphabet soup that is development for the world wide and mobile web. Those publishers will need design folk who are experienced in interactive design and user experience… the standard print graphic designer skillset just won’t take you very far.
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As far as engagement is concerned, there are a number of reasons a digital edition might register deeper time in than a website and none of them change my overall feeling that they are not a real long term solution. First and foremost among them is that a lot of the publishers who use a digital edition quite often don’t use or want to use their website as content vehicle. They have not been able to manage or are unwilling to invest in the kind of skill shift and staff reorganization that good web development necessitates. They take the easy way out and put up a digital edition and then compare that to their website.
“Also - don’t lose sight of the fact that readership is always about the content.” - I would caution you not to lose sight of the fact that the content , the message, is always entwined with the medium. If the content is out of phase with the medium it won’t be long before readership adjusts and moves to new places.
On a side note: I want to thank you and Nxtbook for letting this conversation happen on your site. It’s because of things like this that I feel you guys do have your heads in the right place. Keep up the good work.
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