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Summary:

New device opportunities should allow Hearst to drive its digital revenue model away from advertising reliance, and toward 50/50 equivalence…

David Carey, Hearst Magazines, President

New device opportunities should allow Hearst to drive its digital revenue model away from advertising reliance, and toward 50/50 equivalence with readers’ payments, the publisher’s president, David Carey, told the paidContent Advertising conference.

The next wave is almost entirely focused on more consumer revenue – and the early stages look good,” Carey said. “The words ‘paid’ and ‘content’, connected, are my two favourite words in the English language. The technology enables it.”

Cable TV-style recurring revenue is key. “Tablets allow us to get into continuous service monthly bill,” Carey said. “We’re selling a lot at $1.99 a month — $24 a year — which is often more than we get in print. We don’t have to get in to this funny process after a year where we ask readers, ‘Are you sure you want to continue with us?'”

Amongst the device opportunities, turns out tablet magazines is also a long-tail business. “Approximately 40 percent of single-copy sales occur after the physical copy has gone off the newsstand,” Carey said. “We have near-term consumers, we’re getting very good long tail activity – that’s totally new for us.”

That prompts Hearst to think in a more long-term fashion than the monthly publishing cycle…

“The magazine industry can learn a lot from the movie business and the windows they have for their content… theatrical, international, premium, pay-per-view and then it ends up on the Turner channel at 3am,” Carey told panel moderator Pam Horan.

“They always know where it is in that pipeline,” Carey added, contemplating “where [his magazine] is going to be a year from now“. “Historically, we only get one or two bites of that apple, whereas the video industry gets 10.”

Carey also thought magazines can take another cue from Hollywood – tiering editions in to “SD”, “HD” and “director’s cut”-style products, or just as American Express offers several different card types.

The next advent of our subscriber relationship is premium price subscriptions,” he said. “We hope technology will bring us the ability to segment our heavy users and price up to them versus more casual users.”

Hearst wants to start charging $10 per month for a top-tier product. “That’s going to come in the next year,” Carey said.

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  1. The online press needs to provide what we can find in the bookstore or the airport terminal: the ability to buy a single copy of the mag without committing to a subscription. Now *that’s* a la carte.

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