Hearst’s Carey: Tablets Will Provide 25 Percent Of Magazines’ Circulation

David Carey At Media Summit 2011

The notion that the iPad was going to save newspapers and magazines had been diminishing somewhat lately, especially since publishers have tended to regard Apple’s 70/30 revenue split for digital subscriptions coupled. Not to mention Apple’s continued refusal to share substantive consumer data. But with iPad 2 coming Friday, publishers’ ardor for the hot device appears to be growing again. Speaking at the Bloomberg Media Summit, Hearst Magazines President David Carey seemed to take the hurdles Apple (NSDQ: AAPL) has thrown in publishers’ paths in stride, suggesting the Hearst might consider introducing a “bespoke” iPad publication akin to what News Corp (NSDQ: NWS). did with The Daily.

Over the next five years or so, Carey told Bloomberg reporter Brett Pulley that tablets could comprise 25- to 30 percent of magazines’ circulation. He expressed confidence that as the tablet market grows, both in terms of audience and devices, Apple’s stance could ultimately loosen. Either way, he pointed to the “digital storefront” that Next Issue Media has been working on the past year as one of several options that will allow media companies to take fuller advantage of the possibilities presented by tablets.

“You probably have things in your refrigerator that are older than this business,” Carey said, reminding the audience that the iPad isn’t even a year old. “It’s still early and the business models are still being formed.”

He expressed particular interest in possibly emulating The Daily’s varied subscription model, where users can subscribe for either a week or a year. He also pointed Hearst’s use of Zinio, which offers full digital reproductions of magazines, and other device markers, such as Barnes & Noble’s Nook line of e-readers as other options that have pointed out that different users want different things when it comes to digital periodicals.

“We have customers and readers who want the full enhancement that a magazine app provides, such as video and audio, and others who just want to read the magazine in a digital form,” Carey said. “There are others who want the basic magazine and carry it comfortably at all times. It’s like cable, where there’s the HD customer and the basic video customer. Just like cable, as publishers, we have to satisfy both kinds of customer. There are different price points that will make it attractive for the audience. We can’t be like that the old line from Henry Ford – you can have any color you want as long as it’s black. Uniform subscription rates won’t work. For example, we can develop an enhanced version of Popular Mechanics and one that’s more basic and cheaper that will allow for price segmentation.”

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