There has been a lot of doubt about publishers’ hopes that tablet devices could help return magazines and newspapers to the days when scarcity helped drive ad revenues and consumers couldn’t get all that content for free on the web. A new study from the major publishing JV Next Issue Media, which is in the process of setting up a digital storefront for mags and newspapers, claims that the industry could reap $3 billion in revenue by 2014 from from interactive subscriptions. After accounting for potential cannibalization of some print subscriptions, the study adds that the industry could realize $1.3 billion in incremental revenue.
The study, conducted by management consultancy Oliver Wyman, attempted to get a sense of what the expected demand across nearly 230 digital mag and newspaper titles would be over the next few years. About 1,800 U.S. consumers were surveyed. They were mainly asked about their expected holiday purchases.
The report was limited strictly to subscriptions — it did not attempt to examine the impact on ad spending, e-commerce, single copy sales or other potential revenue streams from digital mags and newspapers — which is the primary purpose Next Issue was created by Condé Nast, Hearst, Meredith (NYSE: MDP), News Corp (NSDQ: NWS). and Time Inc. (NYSE: TWX) last year. Among the findings supporting its view:
– For those already subscribing to a digital version of a mag or newspaper at the same price as print editions, publishers see a 9 point increase in the overall subscription renewal rate, to 64 percent from today