Single Issue Sales or Subscriptions?

Many magazines are sold through the iTunes app store as subscriptions or single-issue sales. But there are signs that publishers are gradually moving the emphasis towards subscription sales, Time Inc having originally only sold single issues through iTunes recently reversed policy and went whole-hog into iTunes with subscriptions, including single month auto-renewable subs, (so the newly launched in iTunes Southern Living offers a one month sub for $1.99 and non-renewable single issue for $4.99).  Here is why:

Publishers will always prefer to sell subscriptions than to sell single issues:

  1. A single issue is just one transaction and a small one, it is by definition a ‘one off’. If the magazine issue is priced at £3.99 in iTunes the publisher may be lucky to get £2.00 when Apple have taken their commission, VAT has been paid, and any app developer has been paid.
  2. A subscription sale is an ongoing transaction, and its remarkable how solid the iTunes in-app subscription sales are. All the magazines on the Exact Editions platform that have branded apps in iTunes sell subscriptions for ‘short’ periods. In most cases the magazine publishers choose to offer 30-day renewable subscriptions. These subs renew at a very good clip. Clearly the auto-renewal rates for individual magazines vary, but in practice a 30 day sub will renew on average at least 5 times (for some magazines the auto-renewal rate is higher). If the 30 day sub was sold at the ‘same’ price as a single issue sale, what was a £2 net transaction becomes a £10 steady flow….
  3. And the even better news is that some subscribers will ‘up’ their auto-renewal to annual subscription which also ‘auto-renews’.
  4. Publishers are more likely to have a significant relationship with the purchaser who subscribes to the magazine, than from a customer who buys one or two magazine issues.

Customers who buy magazines are liable to be confused

  1. By offers that promise a single issue at one price (e.g. £3.99) when they are simultaneously being offered a subscription that will deliver them 3, 6, or 12 issues at lower per issue prices. A publisher who will sell a single month subscription for $1.99 is not going to get many takers for a single issue priced at $4.99
  2. In the physical world publishers can ‘get away with’ publishing print magazines that cost $4.95 at a street kiosk, but are available for 12 months sub through the post at $29.99 for 12 issues. You want the magazine now, and its on the counter in front of you, right? Buying the print sub is delayed gratification and a completely different process with credit cards etc. But any differential on per copy costs is going to be a huge disincentive at the iTunes checkout counter, `especially when the subscription price is lower because the publishers prefer subscriptions (see above)
  3. Are the customers in fact getting the same thing when they buy a subscription as when they buy single issues individually?
  4. Or are they getting something better — e.g. access to an online archive, or the ability to search their  issues as well as to leaf through them on the iPad? If customers are not able to search their single issues what is the real advantage of having a heap of them on a hard disk or a cloud-based locker service where they can only be ‘paged through’?
  5. Customers may feel more secure in buying a single issue than in buying a subscription. But are they in fact more secure? If a publisher or an app developer goes out of business is their any practical guarantee that an app bought in 2012 will be fully functional in the iOS of 2016?

The real problem with single issues is that when they are sold on their own they mask the true value of an issue-based subscription publication. The real value of a magazine’s back issues are in the collective momentum that it can give to the current community of magazine readers and subscribers. Digital magazines are potentially so much richer than paginated heaps on the floor because the archive of back issues can be fully searched and easily accessed.  Providing access to the archive is part of the value of a digital subscription, and a publisher who takes this attraction away from his readers is hiding the value of his legacy. Magazine archives are rich assets for magazine publishers and they are valuable to magazine subscribers. But there is no chance that consumers are going to buy stacks of digital back issues at $2 a time (or even at 50c a time). A rich and informative archive can be a huge magnet for a magazine but it has to be freely available to subscribers if its magnetic attractions are to work.

Publishers who want to build digital subscription lists need to emphasise and address their archives, and this can be a much greater inheritance than a trickle of single issues sales.  Magazines with decent and addressable archives get better as they get older: single issues may on the other hand end up being a legacy nightmare for publishers who feel an obligation towards their one-time customers.

 

 

 

 

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