Blog Post

Google Weighing Up Its Own Newsstand, But Who’s Reading?

When it launched last year, the iPad was hailed as the fresh-faced savior of the beleaguered and tired publishing industry. That idea looks like it may have been put to bed for now: the latest figures from the Audit Bureau of Circulations reveal that publishing magazines for tablets and other wireless devices won’t be as simple as build-it-and-they-will-buy. Yet we are still seeing a lot of companies looking for ways to enter the game: the latest, apparently, is Google (NSDQ: GOOG), which wants to create a digital newsstand for Android-based devices.

According to the WSJ, Google is currently shopping around the idea of a digital newsstand to publishers that include Time Inc. (NYSE: TWX), Condé Nast and Hearst Corp..

Google is trying to sweeten the deal with revenue sharing terms better than the standard 70-30 split offered by Apple (NSDQ: AAPL), although the article doesn’t say what Google’s split would be. It has also proposed sharing more information about readers, “to help with marketing related products or services.” The project is being led by Stephanie Tilenius, VP of e-commerce.

If this newsstand story is true, Google would be entering an already crowded market. In addition to Apple’s iTunes store selling magazines for the iPad, there are efforts from retailers Amazon (NSDQ: AMZN) and Barnes & Noble (NYSE: BKS) on their respective Kindle and Nook platforms; and the as-yet unlaunched newsstand from Next Issue Media, backed by Time, Condé Nast and Hearst, among others.

Coincidentally, Next Issue Media itself is planning to launch on the Android platform later this year; it’s not clear how this would sit in relation to a Google initiative.

But even if there are a number of offerings in play, there is still a lot of room for improving the formula.

One of the big problems with iPad apps, for example, is that publishers don’t have a lot of flexibility in how they can charge users for content: while some apps such as Newsweek‘s and the Economist‘s do offer subscriptions, the norm seems to be paying for single issues, which means users have to keep returning to the iTunes store to keep reading. The WSJ article notes that Apple is looking at improving this, too.

Difficulties in getting the charging right might be at least partly responsible for some of the disappointing figures we’re seeing for actual consumption of these digital magazines.

ABC (NYSE: DIS) figures show that Wired may have sold 100,000 copies of its iPad app in the first month, but between July and September, it averaged only 31,000 copies per month, and even fewer the two months after that, with 22,000 in October and 23,000 in November, compared to 130,000 print issues for each of those two months.

And Wired looks like the good news: Vanity Fair sold 10,500 copies per month in August-October, and 8,700 in November. Glamour started with 4,301 sales in September, but by November was only pulling in 2,775. GQ sold 11,000 digital copies in November but averages around 900,000 per month in print copies (that’s subscription and newsstand combined).