9 Comments

Summary:

The Economist’s CEO thinks news publishing will be all-digital at some point in the near- to mid-term. But he sees services like Flipboard re-using his content to take its revenue along the way.

Economist iPad edition

The Economist’s CEO thinks news publishing will go all-digital at some point in the near- to mid-term.

“Print circulation is at record highs,” Andrew Rashbass told the Paley Center’s international council in Madrid on Thursday.

“We’re holding on to it as long as possible – but my view of what’s possible is more pessimistic than a lot of other people’s…

It’s not fashionable to say it, but I think, frankly, it will be all digital. I don’t know when that will be exactly, but the idea that mass printing of paper will be around in 25 years is odd.”

Rashbass’ excited realisation at The Economist is, after years of trying to find a viable model for the Economist.com website, it is the linear and packaged “lean-back” experience of tablet publishing – more akin to familiar print magazine publishing – which gives the title its greatest possible digital manifestation and its best shot of online business success.

As titles like The Economist go there, some pure-play digital services like Flipboard go in the same direction, aggregating their content in the same way many publishers complain the web has done. So will publishers be disaggregated on tablets in the same way many have been on the web, I asked Rashbass?

“They didn’t ask me (to include our content) and, if they did, I’d probably have said ‘no’,” he replied.

“It’s not a creative reimagining in some way – it’s a head-on competitor. I don’t think it’s that significant, the (Economist.com) team obviously felt they wanted to do it. Let’s see – I’m happy to see experimentation and change minds later.

“But you’re heading down a route we’ve seen before – giving the opportunity to extract value to somebody else in an area that should be our own – so Flipboard is problematic.”

The Economist has a branded presence on Flipboard, with content taken from Economist.com rather than the magazine. No ads were visible when last checked by paidContent.

Rashbass declared himself “relaxed” about Apple’s 30 percent commission on its iPad edition, however:

“I don’t find the 30 percent problem problematic,” he said. “The majority of people in this room have always worked through third parties – whether through newsstands or other things. Even we have always have a newsstand presence.”

  1. I thought Flipboard was a channel. Channel management is the big challenge in the digital-only age.

    Share
  2. TrueEconomist Friday, April 27, 2012

    Andrew Rashbass does not see the Apple’s 30% cut as problematic. Good. The Economist must be very rich. However, considering that you can pay 10% for a similar service by other providers, his throwing out 20% of revenue seems stupid to me.

    Share
    1. Stuart Anderton Friday, April 27, 2012

      How much do you think the retail and wholesale trade take from a print sale?

      Share
      1. Don’t forget though that digital issues have 20% VAT (which print doesnt have) and then 30% to Apple. So publishers lose 50% of revenue before they start. Yet consumers expect digital products to be cheaper than print as there is no tangible product so “it must be cheaper to produce”. The fact is in an Apple world, the economics of digital publishing are much tougher than they first appear…..

        Share
    2. You totally miss the point here, The Economist probably doesn’t make more than 30% profit on the retail price of the print edition, I’m sure the retailer makes at least 50% after VAT. Apple’s 30% take will seem great value, especially when you consider they do not have any print or distribution costs.
      Where the problem is for The Economist and all print media is that advertising revenue from their online channel is tiny compared to print. Advertisers want to pay per click or per impression and those costs are generally far lower than an effective per impression rate for print.

      Share
  3. What similar print service charges 10%? and have you factored in the cost of production before making these remarks “True”Economist?

    Share
  4. Mr San Diego Friday, April 27, 2012

    @TrueEconomist. Where is there a digital “newsstand” comparable to Apple Newsstand’s reach that takes 10% commission? I’m all for lower commission but if you’ve done any homework in the digital magazine space, you would know that if they aren’t taking a commission, then they are charging huge production or licensing fees. Nook, for example, takes 50%. That’s 20% more than Apple Newsstand. You would think since these digital magazine providers are competing for market share, the price would be driven down. Hopefully, we will see an organization jump into the space (ex. Curtis Circulation) that can advocate for publishers and negotiate these prices down across the board as well as act as a single touch point for the consumer. As far as FlipBoard goes…revolutionary. Digital magazines on digital newsstands seems like an interim solution. I’d compare it to the Flip Video that existed for a couple of years before cell phones and digital cameras filled that need. Technologies like FlipBoard will become the new content distributors. Search engines will lose market share as a content distributor. Websites will have to be reimagined – will consumers even go to traditional websites in the future?

    Share
  5. David Esrati Friday, April 27, 2012

    I predict the need for maybe 5 computers in the world- IBM Chief Watson around 1945.
    Funny “The Economist” CEO is trying to predict anything- economists are very good at hindsight- not forward sight.

    Share
  6. Stuart Anderton Friday, April 27, 2012

    How is 25 years “near to mid term”?

    Share

Comments have been disabled for this post