What is Netflix telling the Magazine Industry?

There has been an interesting move in recent months towards the idea that digital magazines should be sold according to the “Netflix model”. One of the early movers was Marco Arment who has started a digital-only magazine The Magazine.  In its FAQ, Arment is quite explicit about following the Netflix model:

Subscriptions to The Magazine work more like Netflix or cable TV than print magazines.

Unlike most magazines, when you’re a subscriber, you can access all issues that we’ve ever published. We don’t limit you to just the issues that come out during your subscription, and we don’t ask you to purchase individual issues.

In return, we ask that you have an active subscription whenever you want to download any issues. (This is how most Newsstand magazines work.)  The Magazine FAQ

Recently Zinio, one of the first companies to offer digital magazine subscriptions, also announced that it would be embracing the “Netflix model” with its new bundled approach to selling magazines: Z-pass. Forbes has a story on this development.

Zinio’s answer to that demand is a new offering called Z-Pass. For $5 a month, a customer receives her choice of three magazines from a catalog of more than 300. Subscribers can swap titles in and out as they choose and add more to the plan for $1.50 each, although some premium magazines, such as the Economist, cost more. Forbes: Zinio moves to the Netflix model.

Zinio is looking to the Netflix example not just for the access model (back issues are not included), but for the profusion of choice that Nextflix and Spotify aim to provide for films and music. The Zinio offering currently has 300 magazines for the US market – which is a decent offering, but a long way from the comprehensiveness that may be required to be a Spotify or Netflix for magazines. But the really important shift that Netflix Spotify and The Magazine are making (Exact Editions has been there for a while) is the move towards a subscription plan which encourages and requires continuing subscriptions if the customer wishes to maintain access to the whole magazine as it is published.

Moving away from an issue-based way of selling fragments of a magazine and concentrating on selling all-you-can-eat subscriptions for continuing access has the enormous advantage that it helps magazines to build communities around the digital magazine. Why does the model of providing access to all available  issues for each title help in building the digital community? The principal benefits are that each title that adopts this approach enables its subscribers (all current and continuing subscribers) to have access to the same issues, to link, to bookmark, to blog and to comment on the whole magazine. Not merely on the current issue, but on all the available issues also. Providing complete access to the same issues to all provides the basis for a community that can read and enjoy the same stuff.

The Exact Editions platform has always supported the Netflix model for selling subscriptions, and in the next few weeks we will be introducing more tools which help users (and prospective users) to see and taste the full wealth of digital magazines. Both on the iPad and on other platforms.

Whether the Netflix and Spotify model of selling “all you can eat” subscriptions across a vast number of titles will work for magazines is another matter. Zinio have not fully embraced this smorgasbord approach, since they require the subscriber to choose at most three subscriptions, from the range supported (or pay extra for 4th, 5th etc). But there are other ways of bundling such options and it will be interesting to see how this cake may crumble in the future. Magazines may prefer a more targeted approach to bundling, one which helps the central mission of building a digital audience around the special interests of the magazine content.