Can Publishers Capitalize On Kindle Tablet To Boost’ Digital Downloads?

Publishers are once again rubbing their hands together over the new possibility of another, non-Apple-owned avenue for selling digital versions of their periodicals. There are certainly reasons for hope, which is why Hearst and Condé Nast both released their latest numbers for digital downloads and subscriptions — though both were careful not to mention anything about the “officially still-secret” Amazon (NSDQ: AMZN) Kindle Tablet that is expected to be unveiled in New York on Wednesday morning.

Hearst Magazines says it has exceeded the number 300,000 in paid distribution for its digital editions across iTunes, B&N Nook Color and the Zinio Newsstand. That amount includes a combination of monthly digital edition subscriptions and single copy sales — a 10-fold increase from September last year, Hearst says.

Meanwhile, Condé Nast points to 500,000 digital circulation, with a subscriber/authenticated print reader ratio of 50/50.

In August, Time Inc. (NYSE: TWX) said its digital magazine and related content apps have been downloaded more than 11 million times, though the company didn’t offer a breakdown of how well individual brands have done. It also said that of its total 28 million print subscribers, “hundreds of thousands” have upgraded their subscriptions to include the four tablet editions at no extra cost. The publisher claims to be adding thousands of new subscribers every week.

At that point, Time Inc. also said it has sold more than 600,000 digital single copies among its four titles — Time magazine, People, Sports Illustrated and Fortune — is working on creating tablet editions for its entire roster of 21 titles by the end of 2011.

Allowing print subscribers free access to digital makes it harder to determine the value of all these downloads and the prospects for mobile replicas and magazine publishers’ future. Condé Nast and Time Inc. — which is apparently sitting out the Amazon Kindle Tablet announcement for now, sources at the company say — both offer print/digital packages for one price; Hearst does not.

AllThingsD’s Peter Kafka got a breakdown from an unidentified sources at Hearst, which sells yearly digital subscriptions for $19.99 a year. A portion of the company’s digital downloads are from single-issue sales, that 300,000 number translates into $15 to $20 a year per unit, giving Hearst’s digital versions an annual run rate of $4.5 million to $6 million.

So yes, compared to the millions of print readers and the revenue attached to them, these digital numbers seem small, even with the sudden gains over the past year.

The best guess of what it will all add up to was made by magazine joint venture Next Issue Media, which last year estimated that the industry could reap $3 billion in revenue by 2014 from from interactive subscriptions. After accounting for potential cannibalization of some print subscriptions, NIM’s study added that the mag publishers could realize $1.3 billion in incremental revenue.

And that’s only a part of it. Up to now, there was really no place for a periodical to offer advertising on the Kindle. But with the introduction of the Kindle “Fire,” as the tablet is reportedly known, the promise of cross-title, cross-device advertising offers real value to publishers as interactive advertising is sold at a premium. That’s at least one thing publishers can celebrate at a time when print ad pages are trying to hold on to slim gains and any sign of growth offers a shot of hope.