Variety announced the moves early Tuesday, saying the tabloid will drop its daily print edition as of March 1 and publish only a weekly version on paper. The paywall, which charged users $250 a year for access to Variety content, comes down at the same time — Penske called it “an interesting experiment that didn’t work” — and in a somewhat unusual decision, the paper’s editor has been replaced with three editors, each of whom will run different sections of the magazine.

Penske, the son of famed race-car driver and NASCAR operator Roger Penske, isn’t a newcomer to the power of digital: he was a co-founder of Mail.com, which he sold to a German internet company in 2010, and before that helped start a mobile company aimed at children called Firefly.

We're all going to miss Daily Variety in print but now we'll be faster and more nimble. It's a good move.

—
David S. Cohen (@Variety_DSCohen) February 26, 2013

The new owner bought Variety in October from owner Reed Elsevier for $25 million, after the European publishing conglomerate reportedly cut the price it was asking for the magazine — once reportedly valued at more than $200 million — by 25 percent. Penske added it to a stable of online properties that includes the Deadline site and MovieLine.com, as well as the well-regarded technology blog Boy Genius Report and HollywoodLife.com, a site run by former the former editor of Cosmopolitan, Bonnie Fuller.

If Penske was hoping that his moves would be applauded by his other sites, he doesn’t know veteran Hollywood gossip writer Nikke Finke, who runs Deadline Hollywood. In a scathing post about the dropping of the paywall and the decline of what she called “the beleaguered trade,” Finke said editorial morale at the entertainment trade magazine “is at its lowest ebb and anxiety is running sky high,” and described advertising as “non-existent” and readers as “few and far between.”

Sharon Waxman, who runs an online competitor called The Wrap, also warned that Variety could have a lot of work on its hands, since — like many other newspapers and magazines — print advertising in the daily edition likely made up a large proportion of its revenues.

Post and thumbnail images courtesy of Shutterstock / wavebreakmedia and Flickr user Pew Center

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As Arment explains in his blog post about the change, the need to open up his magazine’s content more for sharing was brought home by the response to a recent piece he published by Jamelle Bouie on the topic of race and technology writing. As with most of the essays in The Magazine, the writer was free to publish on his own blog as well, which he did — and while The Magazine’s version got plenty of readers, the response to Bouie’s piece after it appeared on his own site was substantially larger:

“We allow authors to republish their articles on their own sites (or anywhere else) just 30 days after we publish them. Bouie did exactly that, as many of our authors have. Only then did his article explode into the huge discussion I suspected may result from it — and The Magazine wasn’t a part of it.”

The magazine was cut off from the social web

The Magazine wasn’t part of this broader web and social-media discussion because Arment initially showed only a short excerpt at the website — as well as a download link for the iOS app — when readers shared a story. As the publisher points out, since his magazine doesn’t rely on advertising at all but gets its revenue entirely from subscriptions, a web presence with full content seemed like a fairly low priority, if not an outright negative. Arment calls this “the biggest mistake I’ve made with The Magazine to date.”

“You’d share a link, and everyone would just see the truncated teaser. Some of them would subscribe and see the rest, but most would get turned off by the truncation and just abandon the effort, as we web readers tend to do. Most people with big followings would quickly realize this and, understandably, avoid linking to our articles.”

This is similar to the problem (one of many) that News Corp.’s iPad-only magazine The Daily ran into when it launched: it didn’t even have a website, per se, so initially users who followed a shared link from a subscriber would get a static page. In the early days of the app, in fact, readers were actually sent to an image of the page from the app — something that was impossible to click on or otherwise interact with. The sharing experience was so broken that many likely never bothered.

Where should the freemium line be drawn?

Arment’s problem is a microcosm of the tension that publishers everywhere are experiencing, from the New York Times to the smallest local paper. While some media companies — including News Corp. with some its British papers — have chosen to go with what are called “hard” paywalls, where virtually no content is provided to readers for free, almost everyone else is trying to find a happy medium between that and no subscription barrier or paywall at all.

The NYT started by providing 20 free articles, and giving anyone who came in via a link on social media a free view, a so-called “porous” paywall approach many other newspapers have adopted. But the paper recently cut the number of free articles in half. Andrew Sullivan, meanwhile — who recently launched a standalone blog funded solely by subscriptions — has made virtually of his content free via RSS, but imposed a click-through wall for readers on the site.

The issue for everyone from Sullivan (who will be appearing at our paidContent Live conference in New York in April) and Arment to the New York Times is how much they need to be part of the social web vs. how much they plan to rely on reader subscriptions. A hard paywall essentially means a publication will be supported solely by existing readers, plus a few new sign-ups here and there — but newer or smaller publishers need the word-of-mouth that sharing brings in order to build awareness (and older brands might as well).

As traditional advertising continues to decline in value — something that has taken both the New York Times and the Financial Times to the point where subscription revenue now exceeds advertising revenue for the first time — more and more publishers are going to have to confront this tension between paying and sharing. And in all likelihood, there is no single right answer.

Post and thumbnail images courtesy of Flickr user Giuseppe Bognanni and Shutterstock / Daniilantiq

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Awkward beauty

Yahoo’s interface for Livestand is fairly good-looking, but it isn’t necessarily the kind of visual appeal we’re used to seeing on the iPad. The interface is spare but not really simple, with some depth and animation effects that feel a little out-of-place on a device where grid views often prevail. Flipboard’s greeting screen, for example, works on a grid and offers less visual confusion in my opinion, whereas Livestand’s 3D effect can obscure tiles and just adds a step between you and access to content.

There’s also the problem of usability. The home page looks good and has the hallmarks of simplicity, but it’s actually quite tricky to figure out how to add content from the featured carousel to your library. That’s actually because you can’t do so without navigating first to the “explore all content” extended catalog. I assumed that there would be an option when I opened an individual app or magazine, or that I could drag and drop the square icons, but neither works.

Slick content formatting

The actual content of each applet, or “magazine,” you can subscribe to within Yahoo Livestand (all of which are free, by the way) is very nicely formatted. Yahoo has clearly paid a lot of attention to fonts and layout, and the ultimate effect is worthy of being used as a demo in college design courses. This is especially true for magazine content like Surfer‘s.

But the content formatting seems to come with a cost in terms of responsiveness. Delays while you wait for articles and subsections to load are common throughout the app, and though the spinning, glowing circle Yahoo has used to indicate a wait is visually impressive, you get really tired of seeing it after a while.

Multiuser design

Yahoo was smart to include the ability to register multiple user profiles in Livestand right from the beginning. You can add up to four users on a single device and sign in using either your Facebook or Yahoo credentials, or you can start using Livestand without any outside account. As Zite pointed out in a recent update, iPads are often multiuser devices, and the ability for up to four people to keep their content separate and jump in without an arduous sign-up process is nice.

Pretty but not deep

Livestand, unlike Flipboard, is not really a social news tool; it’s more about repackaging traditional sources of content in a way that feels more like newer delivery vehicles that draw from Facebook, Twitter and RSS. And that’s its biggest problem.

Yahoo’s concept of a self-contained virtual newsstand in the end doesn’t feel up to the challenge of delivering the future of news in the way that more-connected, more-personalized tools like Flipboard and Zite do. It looks good, but the superficial appeal is undermined by performance and usability issues, like the fact that it doesn’t work in portrait mode, for example. Some of the formatting and design decisions actually make me wish I could overlook its shortcomings and use it as my default news reading app on the iPad, but it just doesn’t have the brains to seal the deal.

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That’s why the essayists and photographers who contribute the stories and pictures that make up each issue of Once get a share of the revenue generated by that issue. The first edition, for September 2011, is available free with every download of the app, but each subsequent issue will retail for $2.99 via in-app purchase. Once Apple gets its 30 percent cut of sales, the rest is distributed evenly between the publisher (50 percent) and photojournalists (50 percent to split) that help create each issue. Executive Editor of Once, John Knight, says this is possible specifically thanks to the iPad’s unique qualities as a publication platform. “Not only has Apple created a marketplace that is much more active and profitable than the online marketplace, expectations are different for the iPad,” Knight said. “The internet = free, but the app store doesn’t.” Especially when content is available only on the iPad, Knight argues that customers are more willing to pay for it, and numbers from analysts back him up.

Once definitely has content covered. The inaugural issue includes three features, each comprised of an essay that spans about three pages, and around 20 to 25 photographs about a specific subject. The essays do a great job of setting context for the gallery that follows each, and supplemental info from captions, audio clips and interactive graphics tie the whole thing together. The interface is clean, and does a good job of letting you get around the app without getting in the way of the stunning photos.

Once seems tailor-made for the iPad, but that’s by design; John Knight told me that the team behind the magazine recognized early on “that [their] strength is in [their] ability to generate content specifically for the iPad.” From concept to final product, the idea is always to create something that’s good-looking and engaging on the iPad. It’s a process that could give Once an edge over print-based periodical incumbents, many of which still design for paper first and port the end product to the iPad as an afterthought.

With a smartly designed product made just for the iPad, and an innovative compensation model, Once might have some advantages over the competition. But, as Knight himself is quick to acknowledge, both of those potential advantages also present unique challenges. Since it’s launching on the iPad without a print predecessor, Once doesn’t have a built-in reader base, Knight says, and will have an uphill battle building one from scratch. And since the model calls for revenue sharing, there has to be revenue to be shared in order to keep content rolling in.

Finding an audience might become easier as the iPad becomes more popular, and people turn to it first for periodicals and content, instead of print publications. As for revenue, the decreased overhead of being an iPad-specific publication should help stretch what money does come in farther, since each issue requires fewer hands on deck to bring it to fruition. Knight also plans to embrace Apple’s upcoming Newsstand feature in iOS 5, and says Once should begin offering multi-issue subscriptions later this year.

Once is definitely something of an experiment. Knight acknowledges that they’ll “see how [the revenue] model shakes down when [they] start offering paid issues,” but believes in the concept behind the app. What happens next may be up in the air, but Once has already managed innovative, well-designed visual storytelling, so it’s off to a good start.

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Obviously, Playboy had little choice but to go the route of a web app with its uncensored iPad offering. While Playboy does have an app in the App Store, it doesn’t offer anywhere near the content of the magazine, and because of the restrictions against nudity and pornography in the App Store guidelines, it never could. But there are advantages to Playboy’s approach that extend beyond just sidestepping the censors.

The magazine doesn’t have to deal with Apple’s in-app subscription system, or the tithes the company expects from publishers in exchange for using it, for instance. The $8 monthly subscription fee that Playboy charges for access to its web app goes directly to its bottom line, without having to take out a 30-percent cut for Apple. Playboy also gets complete control over its relationship with the consumer. When you fill out your valuable personal info at sign-up, Playboy gets instant access to that info, without Apple’s pesky permissions dialog getting in the way.

Playboy’s web app also does a pretty good impression of a native app. The app detects orientation rotation, and provides you with either a single page or two-page layout accordingly, and it transitions smoothly between pages with swipe animations. Table of contents items are hyperlinked, so you can just tap on an article title to jump to that piece. If you add a shortcut icon to your iPad’s home screen, you might not even notice the app is housed in a browser.

But while the web app fairly accurately resembles a native app, a native app it is not. And that means it comes with some caveats, like no offline access, the occasional stutter when switching orientations, and an experience that doesn’t go very far beyond being a scanned digital representation of the print original. There are, for instance, no interactive features within the magazines themselves, and even the most recent issue (every single Playboy ever published is available to subscribers, an admittedly nice bonus) has fairly low-res text that’s hard to read and made somewhat fuzzy by JPEG artifacts. Also, two-page features and ads have a visible seam down the middle that rarely, if ever matches up correctly.

Playboy also doesn’t support multitasking, and asks for your login credentials every time you jump out of and back into the app. But the web app’s biggest failing is that it doesn’t do any local caching, so if you’re not connected to the internet, you have no access to any content whatsoever. Most native iPad magazine apps, by contrast, provide you with offline access once an issue is fully downloaded to your device.

Playboy may derive some potential benefit for itself by avoiding the institution that is Apple’s App Store, but it’s not doing customers any favors in the process. The web app only superficially resembles a native one, and I suspect App Store reviewers would’ve greeted the low-res scans with underwhelming scores, had Apple’s family values not precluded the possibility entirely.

The bottom line is that if publishers want to cut Apple out of the equation, they need to take extra care to ensure the product they come up with in the process is one that users are willing to venture afield to find. The App Store may be a more confining space, but it also takes care of a lot of the legwork related to marketing and discovery. Staying outside the gates requires a lot more effort than it looks like Playboy is wiling to put in.

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The broad category of “reader apps” includes catalogs, books and brochures in addition to magazines, but YUDU separates out these categories in its reports when differences between them are meaningful. The results are based on information gathered from 80 of YUDU’s branded client offerings, and reveal promising statistics regarding iOS publication uptake, use and engagement.

YUDU found that more than 40 percent of iOS magazine app users were willing to supply their personal details when given the option. That nearly matches the 50-percent opt-in figure we heard earlier from Apple and publishers using the in-app subscription system Apple recently introduced to iOS. According to YUDU’s report, the percentage of users willing to share info with publishers of brochure and catalogs is only slightly less, with around 39 and 37 percent opting to provide info respectively. Note, too, that in the case of YUDU apps, this info must be manually entered in registration forms within the app, rather than shared via a simple dialog button press the way it happens through Apple’s built-in subscription system.

That’s good news for publishers and marketers looking to use iPad publications as a means to gather valuable user data about its customers and subscribers. The reach of the App Store and the ease with which people can fill out these informational forms means that publishers can potentially reach a far broader audience with far less expense than with traditional print media.

iOS magazine users are also becoming more and more engaged. YUDU found the time spent with iOS magazine apps has increased by 50 percent since YUDU started monitoring its app statistics. That period covers the release of 10 issues, a timeframe which varies slightly depending on which publication you’re looking at. YUDU maintains this is a factor of users becoming better acclimated to their iPad devices and the services available to them.

Magazine apps also see a 64-percent user return rate, which means users of YUDU magazine titles are opening the apps more than once for the most part. On average, magazine app users come back 3.7 times. Update downloads also account for 33.2 percent of all magazine app downloads, which is a considerable percentage in an ecosystem where many apps are quickly deleted before an update even becomes available, according to YUDU.

Finally, YUDU also identified two more promising trends for magazine app publishers. First, app downloads increase at a faster rate than device sales, which seems to show that the average user is buying more and more apps for their iOS devices over the course of the life of those devices, not less. Also, in-app purchasing is steadily increasing, too. While it doesn’t yet approach the revenue made from up-front sales, it’s trending upwards in 2011 so far.

Apple is gaining a lot of support for its in-app purchasing system among publishers lately, despite early hesitation. The trends illuminated by YUDU might be a good indication why.

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Apple’s in-app subscriptions, which are starting to gain widespread acceptance among publishers, including major players like Hearst and Condé Nast, require that applications ask a user whether or not they want to share personal information such as a subscriber’s name, email and zip code with the app’s developer. This step means publishers don’t necessarily gain the valuable customer data they can then use for targeted marketing efforts, which is a big part of a subscriber’s value to magazine companies. It’s a big reason why publishers weren’t exactly thrilled with Apple’s in-app subscription terms.

As it turns out, publishers need not have been so concerned. About 50 percent of iOS subscribers opt-in to information sharing, according to Forbes, which confirmed the figure with Apple VP of Internet Services Eddy Cue. Cue was on hand at the launch of The Daily , the first app to feature in-app subscriptions, and seems to be the man in the know when it comes to Apple subs.

Forbes cites this statistic as being a driving force behind the willingness of publishers to sign on with Apple’s in-app subscription plans. If publishers can maintain a good percentage of its lucrative customer information, while also building their subscriber base by appealing to the growing iPad reader crowd, it’s no wonder they’re willing to play by Apple’s rules.

Of course, there are still some holdouts. Time, Inc. hasn’t announced any plans to offer in-app subscriptions yet (though it has made iPad editions free for existing print subscribers), and you can bet that Apple’s 30 percent cut of all revenue made through subscriptions has something to do with any reluctance that remains. But as with music before it, Apple is counting on its value to publishers to become evident, and these opt-in information sharing numbers are a good start.

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The Telegraph has reportedly accepted Apple’s terms for digital subscriptions, which allows Apple to take 70 30 percent of all revenues made through in-app purchases and maintain exclusive access to customer information, unless the customer opts to share their info with the publisher too. Hearst didn’t specify what terms it agreed to with Apple, but did reveal that it was “comfortable with both the cut Apple will take, and the amount of customer data it would have access to,” according to the Financial Times.

Hearst’s Vice-President of Public Relations, Jessica Kleiman, made remarks that suggest some amount of negotiation was involved in the process:

It’s an equitable and fair deal for both sides. There was a lot of back and forth and we feel it’s a fair agreement in terms of sharing the data and owning the customers together.

While Kleiman seems to want to suggest there was give and take in the process, Apple is famously stubborn when it comes to the terms of its App Store agreements, and I find it highly unlikely that the company gave any ground regarding either its revenue share, or how it would handle customer information. More likely, Hearst realized that the only terms Apple had on the table were both “fair” and “equitable” in order to continue to reach the huge potential audience that is the iPad user base.

Hearst is the first major magazine publisher to come on board with Apple’s subscription plans. Time Inc. announced a deal which would allow print subscribers of its magazines access iPad digital editions for free, but it didn’t announce in-app subscriptions at the time. I suspect that deal is already made, and why Apple allowed the print subscription carry-over to begin with, but neither company has said anything to that effect yet. Hearst, unlike Time Inc., has no plans to offer iPad editions free to existing print subscribers, since it wants both sources to act as separate revenue streams.

Publishers may be privately outraged by Apple’s subscription terms, but they’re also slowly but surely accepting the agreement. Apple has all the negotiating power in this relationship, so don’t expect Hearst to be the last to succumb, either.

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Hefner revealed the news about the iPad on his Twitter account, where he tweeted the following:

Big news! Playboy–both old & new–will be available on iPad beginning in March.—
Hugh Hefner (@hughhefner) January 19, 2011

In later tweets, he assured multiple followers that the magazine would be uncensored, and that back issues as well as current editions spanning the magazine’s entire run would be available for download. Hefner didn’t announce pricing or whether subscription plans were in the works. Many expect that Apple will introduce a digital subscription mechanic for iOS publications to coincide with the arrival of Rupert Murdoch’s dedicated iPad newspaper The Daily, however. The Daily was supposed to launch this Wednesday, but has been reportedly been delayed a few weeks.

If Playboy does indeed arrive on the iPad with full nudity intact, it’ll mark a significant change in App Store policy. Apple has seemed intent on keeping even relatively innocuous depictions of nudity or brazen sexuality out of its app marketplace. Last June, it censored illustrated nude images in comics based on James Joyce’s Ulysses and Oscar Wilde’s The Importance of Being Ernest. Sure, you could probably debate whether or not the nudity in those cases has a solid artistic motivation, but it’d be very difficult to have the same kind of discussion about Playboy.

The App Store isn’t completely without nudity, however. UK-based tabloid, The Sun, managed to somehow get its “Page 3 Girl,” who is depicted topless, through Apple’s vetting process in its iPad application. And this wasn’t just an oversight that Apple eventually corrected. In November 2010, The Sun introduced Page 360, a feature that lets you rotate the Page 3 girl, providing a 360-degree view of the model.

Perhaps Apple is moving forward with the Playboy venture after realizing that having nudity in the App Store through The Sun hasn’t been met with global public outrage or a boycott of the platform. The fact is, Apple has built a very robust parental control system during the past few major upgrades, and, as many have been quick to point out, the iPhone’s browser easily provides all the adult content anyone could ever dream of having access to.

Playboy is a good place to start if Apple is indeed planning to test the waters further with sexually suggestive material. Its depictions of nudity are fairly innocuous in terms of the spectrum of adult material, and it also offers some solid editorial content. If the public reacts poorly, it can easily pull the plug, but I think the platform is ready for this step, especially if Apple is serious about becoming a major magazine purveyor on the international market, where nudity in print is not at all uncommon.

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Project is unique in that it has no print version upon which it’s based. In addition to being digital-only, it’s also specifically designed with the iPad’s unique capabilities in mind. You won’t find the typical scanned pages or static content of most early digital publications here. Instead, subscribers to project get access to “updating content” throughout the month.

Kudos to Project if it does indeed manage to bring worthwhile updates to subscribers during the term of their purchase. One of the main problems with the magazine format in the digital age is that waiting an entire month to see new things is just too slow for many users. Of course, we’ve yet to see what Virgin has in mind in terms of updates. If we see only modest additions made throughout the month, it won’t really prove that much of a differentiator.

Potential rival The Daily , Rupert Murdoch’s iPad-only newspaper publication, is set to launch early in December. While the content of the two publications probably won’t be all that similar, the fact that both will be using the iPad as their sole distribution platform will have the print news and periodical industries watching their progress very closely.

If publishers can get the formula right, the iPad is a market of tremendous potential profit. iPad owners are willing to spend more on apps than their iPhone and iPod touch-owning counterparts, and they also appear to be much more receptive to advertising than most.

In addition to better and more interactive content from publishers, a dedicated means of subscribing to content through iTunes would also go a long way toward attracting and keeping readers.

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