Cost Benefits of A Magazine App

One of my colleagues yesterday sent out an email to those of our publishing partners who are not currently offering an iPad/iPhone app of their magazine through iTunes. You can read the email here. It rightly concentrates on the user benefits — that is the real point of producing an app version of the magazine. A successful magazine app is a good user experience and it should project and promote the magazine to a new and rapidly growing audience. But the email also produced a list of ‘Publisher Benefits’. The list is of some interest:

  • Publisher’s Account gives you 24/7 access to your app sales
  • Control – You set the price of app (within Apple’s matrix)
  • Flexibility – You can change the price at any time and set the number of open access pages you want
  • Visibility – Your app can be found easily in the app store
  • Ease – Exact Editions continue to handle all customer service on your behalf
  • New Revenue Stream – by reaching the new app market
  • Marketing – the freemium app is great exposure for your title to potential subscribers

Perhaps the key item in this list is the one relating to cash — revenue. How can one quantify or estimate the size of the new and growing market for magazines through iTunes? Here are some considerations:

  1. The market for a magazine app bears some relation to the size of the market for the print magazine. A magazine that sells 100,000 copies a month through news stand and subscriptions will almost certainly sell more as an app through iTunes than a magazine that sells 2,000 copies a month.
  2. The market for magazine apps on the iPad exists, and it is small if you measure your circulation in millions because the market penetration of the iPad is still in its early days. Few magazines have target audiences where iPad ownership exceeds 5% of the existing readership. So it may be unrealistic to expect your readership on the iPad to be larger than 5% of your readership in print. (This is not to say that the potential audience on the iPad is the same as the actual audience in print, far from it, but the audiences may have similar scale).
  3. Note however that the market within iTunes is growing by leaps and bounds — we expect to see revenues from iTunes growing by 10-20% per month through the rest of this year.
  4. The tablet market is much more significant than the mobile phone market for magazine app subscriptions. We estimate that 80%+ of the Exact Editions iOS magazine app sales are driven by the iPad market (though a significant proportion of users will have their app on more than one device: phone/pod/pad). Customers are buying magazine apps for the iPad much more than for the iPhone. So an Android market will expand the market, but you may not need to deliver Android support until there is a reasonably successful Android tablet.
  5. If your existing magazine subscribers are buying iPads or other tablets, will they expect to see their favourite magazines on the new device they have brought into the home? Do you want them to be reading another magazine or yours?
  6. The Exact Editions platform requires a small upfront commitment from a publisher — but there are no significant issue by issue costs for the publisher. For the most part we work on a small commission which covers the costs and the support of the freemium solution we deliver. So the publisher who commits to an app on the Exact Editions platform is really opening a new sales channel to an existing market.

So, my bald conclusion is that all but the most specialist consumer magazines should be making profits from apps launched this year. Who knows how the market will grow in 2012? Tomorrow can look after itself, the iPad looks like an interesting target for most magazine publishers in 2011. Forget the bespoke app that revolutionises the news business or the multi-media wonder that transforms the world of fashion publishing with alternative reality cat-walks; such apps may be built, but straightforward readable well executed magazine apps can make money for publishers now. These magazines as apps will look and behave ‘pretty much’ like the magazines that consumer publishers have produced in print for years, because that is what consumer magazine publishers do produce. But they will be different because magazine apps are a bit different. And in 2012 and 2013 they will start to behave in ways that were not possible or imaginable when magazines were merely print objects.

One thing at a time. And the first thing is to find out whether users like reading your magazine on an iPad or tablet. You may be pleasantly surprised by the results.

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