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Summary:

Former Hulu CEO Jason Kilar is reportedly working on a secretive startup called The Fremont Project that wants to build a Hulu-style model for magazines and other content — but the odds are stacked against such an attempt for a number of reasons

According to a recent report at Re/code, former Hulu founder and CEO Jason Kilar — who left the streaming online-video company a year ago — has been pitching publishers on a service he is trying to build that would offer magazine and even newspaper content via a Hulu-style model. The venture, currently known as The Fremont Project, would come complete with a TV-style “windowing” approach, in which some content would be exclusive to users of the service for a period of time before being released through the usual channels.

The idea of a Hulu or Netflix for magazines and newspaper content is a pretty popular one — so popular that Next Issue Media, which offers bundled access to a stable of mainstream magazines, has been called both of those things. But the idea actually pre-dates either of those companies: before they came along, the same concept was described as “iTunes for news” or “iTunes for magazines,” and plenty of people have tried and failed to build one.

Jason Kilar is obviously a smart guy, and Hulu is a fairly sizeable success story, even if you include the disputes among the partners about the future of the entity that ultimately led to Kilar’s departure. But I don’t think the vision of a similar service for magazines and/or newspapers is going to work (in the interests of full disclosure, I didn’t think Hulu or Netflix would work either).

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Different content, different market

Here are a few reasons why I don’t think Hulu for magazines is going to work, and why I think Next Issue Media (which is backed by major publishers like Hearst and Conde Nast) is likely not going to be a barn-burner of an idea either — some of which I covered in a post about the launch of Next Issue’s iPad app in 2012:

The type of content: Hulu and Netflix work well for specific types of content, namely movies and episodes of TV shows, in the same way that iTunes works fairly well for individual songs. These are the kinds of content that people a) are willing to wait for — in some cases at least, b) are willing to pay for and c) are willing to watch or listen to multiple times. No one reads a magazine story over and over or returns to newspaper stories that they remember reading as a child. It’s just not that kind of content experience, and never will be.

The number of players: One of the reasons that iTunes and Hulu both worked at a certain scale is that Apple and Hulu were able to strike sweeping content deals with the major players in their respective markets — six major record labels and less than a dozen major studios and TV networks. I’m sceptical that Kilar’s new project can build a big enough stable of content producers to make it worthwhile economically, especially with Next Issue already out there.

The market itself: Trailers for movies and clips from TV shows are often leaked online, in many cases by the studios and networks themselves in order to boost publicity for the finished product — but nothing in those markets even begins to approach the scale with which news leaks out about interviews or news stories in magazines and newspapers. Virtually anything worth knowing appears long before the actual printed or digital publication, and that problem (if it is one) is getting worse rather than better.

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A newsstand isn’t the right model

As I tried to argue in my post about Next Issue Media and in subsequent discussions of that model, I also don’t think “newsstand”-style magazine or newspaper portals or apps will work for enough users to make them viable, because I don’t think they fit the way that people find or consume content now. So much of it is socially-driven that Facebook and Twitter and blogs are the main engine for content discovery for growing numbers of people, not a single app from a specific company. And windowing the way Re/code describes it is highly problematic:

“The difference in Kilar’s pitch, say people who have heard it, is that he wants to create a new “window” for publishers’ stuff. The idea is that after publishers distribute a print and/or digital version of their content for their subscribers, Kilar’s company would get exclusive digital rights for a period. Eventually publishers could distribute their stuff on the open Web if they wanted.”

I’ve heard from a number of friends who like Next Issue because they can get access to multiple titles, but I’ve heard from just as many or more who said they signed up but never go there. Part of the problem, I think, is that Next Issue sees people consuming content at the magazine title level, when most people just want to be exposed to the one or two interesting articles that their friends think they should read or that a variety of algorithms suggest to them, a la Flipboard.

If Kilar was to unbundle the main title dynamic and provide that kind of discovery on an individual article level, it might work somewhat better, but I’d be willing to bet that publishers wouldn’t like that idea at all. And unlike Apple and iTunes, I don’t think Kilar has enough weight to force a deal like that down their throats the way Steve Jobs did with the record companies.

Post and thumbnail photos courtesy of Thinkstock / Kuligssen

  1. I love Next Issue and think it’s a great deal. And I read a lot more because of their model.

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  2. Another insightful article, Matthews. Thank you.

    Just wondering if it’s useful to see consumer choice as binary: bundled [title] vs unbundled [article] .

    Perhaps the challenge for content companies is even more complex: customers want choice; sometimes just the song, sometimes the whole album: http://www.huffingtonpost.com/2013/01/09/music-sales-2012-digital-physical_n_2440380.html

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  3. Richard Truesdell Wednesday, February 5, 2014

    Mathew, good article but I think that you aren’t serving your readers by neglecting to mention the PixelMags Readr app. That app offers more than 10,000 magazines from around the world, for the same $9.95 a month. I use and love both apps and for $20 a month I have access to more current magazines and back issues than I can possibly read.

    Each service would be even more valuable if there was a way to index the content since to my knowledge, neither program is indexed by Google.

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    1. Thanks for mentioning that, Richard.

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  4. Christopher J. Case Wednesday, February 5, 2014

    A model like this could potentially work for newspaper companies that own several newspapers. It may force consolidation in the industry which may be (financially) healthy in the long run. This of course would require the companies to move to this model themselves. For example you could have the NYTimes offer a one rate subscription to both the Boston Globe and the NYTimes. The Tribune Company could then put out a competing offer of Chicago Tribune and LA Times. The rush would be on to see what media company could offer the more compelling package.

    It was feasible to shell out $20/month to subscribe to one or two papers when that’s all that could physically be delivered 20 years ago. Now we have access to content all over the country and world but don’t possess the appetite or the ability to pay as much per subscription as we did in the past.

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