On Making Digital Subscriptions Work

All Things Digital has an interesting essay by John Squires: Apple, Google and the Publishers: Here's How to Make Subscriptions Work. Squires used to be a senior executive at Time Inc and is founder of Next Issue Media a company that is stealthily developing a new approach to marketing and selling digital magazines on tablet platforms.

Squires echoes cries of anguish that have been coming from his peers in the consumer magazine industry:

In recent weeks, we’ve heard growing concern from magazine and newspaper publishers regarding the challenge of providing content for mobile media while preserving their print franchises. The concern is nothing new, but it’s apparent that content providers are at risk of losing track of their customers like toddlers in a shopping mall. Squires All Things D

Its news to me that magazine publishers care for their subscribers the way parents look after toddlers in a shopping mall. Squires goes on to say:

Devices like the iPad offer consumers a rich reading experience and offer publishers even more targeted advertising, but the revenue tradeoff as publishers navigate the path from print to this new world is lopsided–and not in a good way.

The problem for Squires is that he can't see the old business model working for publishers with the new digital magazines. Publishers are not going to be 'allowed' to track their toddlers in the ways in which they have been accustomed to do. Furthermore Squires doesn't think that subscriptions are going to work for digital publishers:

Isn’t selling your magazine through an app store and receiving 70 percent of the revenues a great deal? After all, magazine subscription agents and newsstands don’t return anywhere near that amount to publishers. But this is argument misses an important point. In iTunes and the Android Marketplace, there’s virtually no merchandising of magazine products. A magazine app must swim to the top of several hundred thousand other applications. And even in the context of a dedicated magazine store, the publisher won’t control featuring.The value of the brand must pull the consumer through to the purchase. And brands are expensive to build and nurture....Squires All Things D

So the litany of complaints continues. Despite the potential for a 'rich reading experience' life is going to be very hard for digital magazine publishers, they will have to (1) create the rich reading experience (2) support devices on various platforms (3) market their wares (4) do some 'feature control' of their own so that their magazines come to the top of the heap (5) build their brands and (6) figure out how this fiercely competitive and rapidly evolving world is going to work. Perhaps Mr Squires should look to the example of Rupert Murdoch and go and build a publication which will meet those challenges head on.

Squires's proposed solution for this difficult quandary in which the magazine finds itself is to propose some industry wide standard solutions (perhaps it will appeal to the likes of Google, Apple, and Microsoft because) "there’s a significant long-term advantage for the software industry to make friends with 150 million magazine consumers." As though these technology titans are going to reach agreement on standard procedures so that the magazine publishers existing business model can be replicated in the digital framework?

Make what you can of John Squires' specific proposals. The second one astonished me: (the software industry should) "Create simple APIs that connect the handful of major print fulfillment houses to application storefronts so existing print accounts can be harmonized with digital access." Exact Editions has been doing almost exactly this for many of the publishers with whom we work. But note, such a solution has to work potentially for hundreds of print fulfillment houses (surely it is a sign of some Time-induced complacency to suppose that only the 'handful' of 'major' fulfillment houses count). It has to be general and generalisable. Furthermore the trick is to work with the APIs of the print fulfillment houses (not of the e-commerce store fronts), so the discussions have to take place between the publishers and the fulfillment houses and their IT houses and app developers. This sort of business has to be under the control and to the account of publishers for it to work the way they want it to. You do not attach conventional print subscriptions to digital subs -- which is what Squires on a strict interpretation is suggesting as the desired solution. You attach digital or app solutions to print subscriptions. That way the publishers (via their fulfillment houses) stay in control of the crucial customer relationship. There is no point asking Google or Apple to build your digital back-end. They are not going to do that, and furthermore the magazine industry really does not want them to do so. Which is where we started, with Mr Squires bleating that Apple controls too much data and will not provide access to the iTunes accounts of Apple's customers who subscribe to digital magazines. Why on earth should they? An iTunes customer who buys a magazine app from iTunes is an iTunes customer before she is a customer of the magazine app. The position is rather different with a subscriber who is already a customer of the magazine and the publishers can insist that their customers are treated with the respect and reciprocity that they deserve. They are already a subscriber to the (print) magazine and so should be offered free access via the app. The Economist got this right by providing free app access to all its existing print subscribers. Time Inc and the other big American consumer publishers is getting it so wrong by refusing to do this

Work around it, and start publishing digital solutions that customers want.....