Magazine Publishers and Horse Dentistry

It seems that every other day brings a new bout of moaning about the limitations of the Apple iPad system as a digital magazine platform.

But are these complaints justified, or is it really an indication that magazine publishers are both missing the bus and looking a gift horse in the mouth? The latest piece of mis-guided bleating comes in an otherwise sensible article from Damon Kiesow in Poynter Online. He says:

What publishers and consumers need from Apple is a real digital newsstand, which would allow:

1. One-stop shopping for multiple publications
2. The ability to buy a single issue or subscribe
3. Capability to connect print and tablet subscriptions, including any package discounts
4. A central location to access purchased or downloaded publications
5. Sales via iTunes or a publisher's own circulation system, with royalties adjusted appropriately

Damon Kiesow 3 strategies emerge for charging for iPad publications

These sound like reasonable requirements. But the plain fact is that iTunes and the app store pretty much does all that right now. Let us take them one at a time: (1) iTunes is a one stop shop for lots of publications, it is hardly Apple's fault if plenty of magazines have not ventured in there yet. Even so, the iTunes news stand is better stocked with newspapers and magazines than any other digital news stand. And getting stronger. (2) (the ability to buy single issues or subscriptions) as Kiesow acknowledges earlier in the article Apple through the iTunes app store allows publishers to sell single issues or subscriptions (at Exact Editions we enable publishers to sell 30 day subscriptions to their magazines which is not the same as selling single issues; but there are plenty of publishers and platforms selling single issues through iTunes) (3) (connecting print subscribers to apps) but as Kiesow recognises there is no obstacle to a magazine publisher connecting its existing paid subscribers for free to the app which is being sold by Apple in iTunes (he cites the experience of People magazine, but at Exact Editions we are encouraging all magazine publishers to do this: connect your existing subscribers for free through the branded app which you are offering in iTunes. This is completely within the letter and spirit of Apple's rules and guidance). (4) is completely baffling, because iTunes so obviously just is that; iTunes is a central location for e-commerce, for storing magazine issues and for providing users with access to archives. How would or could an Apple kiosk do that better? (5) (a system for 'sharing royalties') is already in place and Apple has the rather marvellous adjustment that a publisher can choose how to play the game, the publisher can either sell via iTunes in which case he will find that Apple have taken a 30% commission from the sale, or he can choose to give the magazine away, or indeed provide free access to subscribers from whom the publisher has charged an annual or monthly subscription (outside the Apple system). Not only can publishers connect customers who they have acquired via the iTunes system to their existing deals and print-based offers and incentives, but they can do that without paying Apple a cent for the business which is happening outside iTunes. Apple is being a lot more 'open' about this than will be some of the competing digital news-stands that are coming along.

All this should be known to the complainers in the magazine industry and I think that the real source of the griping, grumbling and equine mouth inspections is elsewhere. Perhaps these are the real problems:

1. iTunes is not a complete digital back-end system for magazines. Publishers are used to having a specialist distribution house handle all complications to do with physical distribution and maybe they are hoping that Apple would be able to do this in the digital sphere and look after the magazine publishers special interests in the way that fulfillment houses have done. Once this is formally stated the idea is ludicrous, but some magazine experts talk as though its Apple's job to deliver, in full working order, the digital back-end of their industry. This is perhaps the burden of Kiesow's request that the putative Apple kiosk should 'connect' the print and tablet subscription ('including any packet discounts' -- I like that requirement: consider the extreme complications that could arise from blending infinite varieties of print/digital discount packages the magazine publishers will dream up; that modest requirement will keep Apple's engineers busy for years). But Apple is not in the magazine or newspaper business and it is not their job to build a system which solves the transitional dislocations of those industries.
2. iTunes does not have an exclusive magazines-only zone. Like the iBooks store. This is true, but it may be a good thing for the magazine industry that Apple does not have a required format and delivery solution for magazines. The jury is still out on the iBooks solution, and perhaps Apple is being very wise in waiting to see how digital magazine delivery evolves. Why should they plump for a possibly half-baked digital standard when we still don't know what the right digital format for magazines is? Certainly Apple has not solved all the problems of digital magazine production, the result is that there is a rather interesting ferment of development and innovation. If Apple had developed a pre-packaged solution (cf Amazon and their so far half-hearted and not very good magazine delivery) we would not be witnessing these exciting experiments within iTunes.
   
3. Apple is not being friendly enough to the existing magazine business. There have been a chorus of complaints about Apple not providing sufficient information on app usage to developers, or to magazine publishers who produce apps. The magazine industry is used to having its own tame auditing service (ABC and BPA being two of the biggest industry consortia providing such information), specifically geared to the magazine industry and its advertising customers. Apple has shown no signs of opening up its books to ABC or the BPA and is frankly unlikely to do so. Why should Apple be unmovable in this respect? Primarily because the business of auditing advertisements has moved on, and there is now no conceivable rationale for having an advertising metric which is exclusively tailored to the magazine industry. Google, Apple, Microsoft and Facebook etc will be the advertising networks that count in the future and they will all be trans-media (web, TV, film, digital publishing, social networking all in a big mix). Since 2005, the boom in digital advertising has shown that measurement and auditing is so closely tied to implementation and operations that it is naive to seek to recreate a magazine-specific analysis or distribution solution. Digital magazines will need advertising but they will need to work with digital solutions and digital metrics which are not narrowly specific to one industry or one media type. It certainly is not in Apple's game-plan or in their interest to gerrymander a magazine specific solution for reporting and measuring usage on magazine apps.
4. It is hard to sell magazine subscriptions through iTunes. Kiesow correctly points out that Apple enables publishers to sell subscriptions, and there has never been a problem about doing this (we have been doing so at Exact Editions since the iPad launched). In contrast to Android, Apple in iOS 4 and iTunes actually has a rather effective way of providing in-app purchases of subscriptions. The problem for the magazine industry is rather different: iTunes customers are hugely biased towards buying stuff that is at the low end of the iTunes price matrix. It is very hard to sell annual subscriptions to magazines through iTunes at the prices that magazine publishers would like to charge (and perhaps need to charge). This is a real problem but it really is not Apple's fault, and they can hardly blamed for this supposed shortcoming. iTunes works very well for low-priced transactions. But it is hard to see annual magazine subscriptions through iTunes flowing off the digital shelves at prices of £20/$30 and upwards. So it will be interesting to see how Newsweek fares with its experiment of selling 6 months subscriptions through iTunes at $14.99. iTunes apps are pretty 'frictionless' when priced at $0.99 or $1.99. But it is much harder to sell subscriptions at $9.99 or $19.99. Perhaps Newsweek will start a trend, or maybe magazine publishers should stick with the scheme of using iTunes for customer acquisition and then upselling them to an annual subscription purchased via a credit card direct from the publisher (where consumers are happier to spend $9.99 or $29.99, for a publication they really value).

The conclusion that one should draw from all these niggling gripes about Apple is this: publishers do not realise how lucky they are, magazine gurus should stop complaining and use the Apple service for the tasks it performs so well, and get on and sell or freely provide (in the case of existing subscribers) access to the magazines that they can now deliver digitally or in print. When you think about it, it clearly would not be a good idea for the magazine industry if Apple did provide a complete and end-to-end solution for digital magazine distribution. Magazine publishers need Android, and Windows 7 and pure web distribution to preserve their independence and choice. They need alternative channels for magazine distribution not just an iTunes route to market. Magazines, not Apple need to control and manage their own digital distribution, and if Apple were suddenly to produce a comprehensive digital magazine service, this would be dangerously sedative if it stopped innovative publishers from looking to alternative digital distribution routes and technologies.