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Summary:

“Virtually every publication in the world right now would desperately like to be 100 percent digital,” said Flipboard editorial director and Time Inc. vet Josh Quittner said at Internet Week this week, as publishers debated how to monetize digital magazines.

Josh Quittner Flipboard
photo: Livestream

“Virtually every publication in the world right now would desperately like to be 100 percent digital” but most can’t do it, said Flipboard editorial director and Time Inc. vet Josh Quittner at Internet Week this week, as publishers debated how to monetize digital magazines.

Social sharing is bound to become more valuable than print distribution, Quittner said. “The newsstand business is a horrible business. Magazines pay something like 50 percent of their costs of distribution to newsstands, and then if they sell 20 to 30 percent of their magazines, that’s considered a home run. Then they have to pay to kill — to destroy — the 30 to 40 percent of the magaines they don’t sell. It’s a really ugly, uneconomical business that is probably not long for the world.”

The Daily editor-in-chief Jesse Angelo said “we always wanted to be a subscription product, with paid ads” and said that “when we talk about apps, it drives thousands and thousands of downloads to the Apple Store. There’s beginning to be a re-creation of the original Web link economy in apps.”

As for paid content, many Flipboard publishers are asking for paywall support, Quittner said. “People will pay for ‘essential’ — the WSJ, the NYT, and the Daily,” he said. Flipboard hasn’t introduced a paywall option yet, but “we have to create systems that allow for the most engaged users to pay for that which they think is essential.”

“Advertisers want much more integration with content,” Angelo said. “They want to sponsor a page, or to have content that’s ‘brought to you by’.”

The Daily won’t do pre-roll advertising, Angelo said: “Short of a video of the president getting shot, I’m sorry, I’m not waiting through your pre-roll for anything. But post-roll, or ‘best video of the day as brought to you by Canon SureShot’ or something — that sort of thing is much more on the rise.”

Digital magazines could take one cue from print

“My tech fantasy is that within the next couple years, smartphones and tablets will have external-facing screens” so readers can show others what they are reading, Quittner said. “It’s a huge social signal. Right now we can’t do that. We’re all in our own little content silos.”

Image from Livestream

  1. I just started reading Monocle magazine. They only do print. The magazine is huge and full of high quality content. $12/issue. You have to pay for the good stuff. And it’s nice to have something attractive on the coffee table that people wil actually read.

    1. Bobbie Johnson Ian Tuesday, May 15, 2012

      Monocle isn’t print-only, Ian. It has quite the little multimedia empire going on.

      1. Yes, I listen to their podcasts. My point was, the actual magazine is not delivered digitally.

  2. Excuse the typos. Ipad.

  3. “But post-roll, or ‘best video of the day as brought to you by…”

    I don’t think publishers get it. How about 3 post-roll ads, 3 icons, you click on 1, 2 or 3, or any combo, whatever interests you, or even none. Or even save the ad for later viewing. Publishers don’t get it, the consumer won’t feel so herded like a cow if they have a choice. Publishers and advertisers have to gamble more than they do now.

    Speaking of which, I’m surprised nobody has a free publication composed entirely of targeted ads that the consumer controls similar to what any web surfer might do.

    Further speaking of which, can one do screen shots on a tablet and save into a notebook of sorts to be viewed more carefully again? Again, people love that interactivity.

    Can people share an ad?

    They have to stop making apps a monolithic experience under their thumb.

    1. Michael Kranitz Yacko Friday, May 25, 2012

      There are publishers out there that create fully interactive experiences with our magazine. Have a look at http://www.rcpilot.com. There is a 2-minute video that shows what we do.

      That said, I would argue that the current landscape of paying distributors like Apple, Amazon and Google 30% off the top is almost as bad as the current newsstand model. The reason is only partly because of the excessiveness of 30% given what those companies provide. The space on a virtual newsstand is unlimited so being part of it has less value than being on a physical newsstand in an airport for example.

      The other reason the model is difficult stems from the fact that in order to create an interesting and interactive experience, a publisher must become both a TV magazine producer and a print magazine producer; something that is very costly.

      I hope the big three in the distribution side of digital change their pricing model for digital magazines; it will truly help usher in the new and better age of interactive magazines.

  4. The body of the post does not expand on, explain, or even mention the headline at all. Why?

  5. Greg Golebiewski Wednesday, May 16, 2012

    Flipboard “we have to create systems that allow for the most engaged users to pay for that which they think is essential.”

    Thank you Josh. We have built such system. It is called Znak it! and it allows its users to choose paid content they want and pay for access as they go, on demand.
    http://www.znakit.com

  6. How exactly is Newsstand’s magazine business ‘Horrible, Ugly’? It got be reading but left me hanging.

    1. Thanks for the comments, Neil and Rich — you’re absolutely right. I’ve updated the post with more of Quittner’s thoughts on why the newsstand business doesn’t work.

  7. Josh Quittner Wednesday, May 16, 2012

    Thank you for fixing the post, adding context and changing the headline to accurately reflect what I said—which was about the newsstand business generally NOT the entire magazine business. You might also fix the typo in the new part: “horirlbe”should be “horrible.” :-)

    1. Thanks for the comment, Josh — typo fixed. Re: the headline (or for posts in the future), you can always feel free to e-mail me directly at laura.owen @ gigaom.com so I can make a fix fast if warranted.

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