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Digital Magazines Take the Next Step



By Matt Kinsman
05/01/2007

Type in the word "make" in Google Search and the first result is for www.makezine.com, a digital preview of the popular "how-to-build" magazine that allows viewers to sample three content pages.

It's part of a program called "Look Inside the Magazine" that Make has offered with digital magazine vendor Texterity for the last three months. The purpose of the program is to catch potential readers at that intersection of an Internet search, let them look around, get answers to questions, and hopefully subscribe. "It seemed to us that we were missing something," says associate publisher Dan Woods. "Our readers all use Google;they should be able to link to Make when they do a Google search and we should be able to put them right in the magazine."

Make is also using the digital edition to make it easier for bloggers to access, including a feature that lets them cut and paste the URLs for Make stories so the audience can print stories out. "Bloggers are reticent to write about a magazine if their readers don't have access to it," says Woods. "Now they do." Make may soon take it a step further by offering day passes that grant full access to the digital edition for a few dollars. "It's a source of new revenue, a source of new subscribers and added value for advertisers," says Woods. "We're not beyond funding something without really knowing where it's going. Based on the early response, we think other magazines will follow this lead. If they don't, they'll lose customers to Google."

The "Long Tail" of Digital Magazines
Proprietary downloads, static facsimiles and awkward readers didn't earn early versions of digital magazines many points. Just six months ago at the Digital Magazine Forum, some speakers contended that digital magazines were of limited use, and had been surpassed by other digital platforms. "Advertisers want print or online but digital magazines are a weird animal that doesn't fit either," David Klein, vice president of publishing and editorial director of the Ad Age Group, said at the time.

But now digital magazines are bridging the gap with online, thanks to rich media and more transparent Internet access. That offers a brand new potential for leveraging digital editions for content delivery, marketing, and archiving. "Everything that matters has to be highly ranked on the first page of Google Search," says Yuval Rachmilevitz, CEO of digital magazine vendor Olive Software. "If you have content that is relevant to that search and it doesn't appear, you're out of business. The reason why a digital edition exists despite print and Web formats is that it's easy and it's cheap. Now we need take that to the next level and offer the depth of the history. The value of something coming from a respected source is much more valuable than just doing a generic Web search."

That requires a change in the mindset of publishers, many of whom have turned to digital editions simply as a cheap and easy way to disseminate content. "Just treating it like a facsimile of a magazine works if you're only concerned with an international audience," adds Marcus Grimm, marketing director at digital magazine vendor NXTbook Media. "If you're looking to grow audience and revenue, you need to look at sponsorships, measurement and social networking. You need to look at optimizing your content in a different way."

The digital magazine as part of an accessible digital archive is sparking new interest. ESPN the Magazine first tapped Olive Software two years ago as part of a program to make ESPN Insiders, subscribers to select areas of ESPN.com, subscribers to the magazine. But going forward, ESPN sees the most potential with online archives. "That's the one we really want to leverage," says Chris Noble, senior director of production. "That's something that could also be used to drive subscriptions or profit and that's something we will have in some form over the next year."

It's part of fulfilling the magazine's "long tail" of demand. "Our content should be just as valuable two years from now as it is today," says Woods, who adds that Make will allow people to share their digital edition for up to two weeks;a great viral marketing tool. Elsewhere, Texterity has clients from association publishing asking for more sophisticated search capabilities through their digital editions such as word stemming, something typically found in information management systems such as Lexis-Nexis.

"If you look at digital editions two years ago, they were very much a closed product," says Grimm, whose company now offers page-specific permalinks, which can tag stories to aggregator sites such as del.icio.us and Digg. "There's a difference between handing someone a magazine and saying ďľ‘there's a great article somewhere in here,' and giving them a bookmark."

Refining Existing Features
The online demand for rich media is extending to digital editions as well and making digital magazines more accessible (and fun). "We stream as much video in most weeks now as we did in all of 2005," says Grimm.

Make is looking to add more rich media to its digital editions, including its popular podcast series that's in the Top 20 on iTunes. B-to-B publisher Bio-IT World, which works with QMags, is seeing more rich media demand as well. "We've had some advertisers request rich media applications and they were pleased with the results," says circulation director Deborah Walsh.

Many of these options had always been available but weren't viable due to cost and difficulty in obtaining video. Now the process has become much easier, thanks in part to the rise of YouTube. "Previously, publishers had to worry about whether they had a streaming server or not," says Texterity vice president of marketing Cimarron Buser. "Now a magazine can add a piece of video to edit and put them up on YouTube with keywords. The beauty of the system is it's easy to do and can get organic search results. This is scaleable because a publisher can develop a schedule, give us the links, we pop them in and they're off and running."

Digital Mag as Revenue Generator
Advertisers have long resisted paying for ads in digital magazines. They'd question who the audience was and if they were actually opening the editions. "As an editorial tool we're pleased but as far as advertising, I'm disappointed," says Steve Sturgess, executive editor at Heavy Duty Trucking. "I think the potential is there but we haven't been able to teach our people how to sell it."

But with new capabilities comes renewed emphasis and additional support from vendors. E-Republic, a publisher for the government space, switched to NXTbook primarily because of the perceived sales support, according to group publisher Don Pearson. "More agencies are doing just online," he adds. "I believe we'll see a nice response from advertisers, maybe they want to stream audio and video, maybe they can take a static print ad and make it more alive online. More budgets are going digital, and having a digital desktop that surrounds the digital edition, from buttons to skyscrapers, allows those online people the full magazine reach."

But while much of the advertising in digital editions remains value added, publishers are starting to squeeze revenue from it. The biggest referral for Hearst Business Media's digital edition of Electronic Products is an online lead generation tool for print advertisers that is promoted in print and with a push e-mail. "Each print advertiser has a link to their ad in the digital issue," says publisher Todd Christenson. "It's this type of cross-platform integration we're interested in, as it adds real value for our print advertisers."

Open Systems Publishing debuted its first digital edition last month and will leverage the service in three ways: To market to two newly acquired mailing lists; to provide for those who want the digital version rather than print; and to help provide ROI for ad sales. "We see it as another revenue stream coming in for things we haven't even thought of," says vice president of editorial Rosemary Christoff.

Zenbu Media, publisher of music magazines Relix, Global Rhythm and Metal Edge, anticipates digital editions generating revenue in the mid-six figures this year and seven-figures next year, according to president Steve Bernstein. But while other publishers are turning to digital editions for incremental advertising and subscription revenue, Zenbu has taken on the role of vendor by creating its own service;called Zendition;which it is now offering to other magazine publishers.

Zenbu originally explored digital editions to serve its international readership, as well as its nomadic college student demographic. The company looked at acquiring a vendor or outsourcing to a vendor but, "In many cases, the pricing was exorbitant," says Bernstein.

So Zenbu decided to build its own. "There were certain things we wanted with the digital edition," says Bernstein. That included a level of permissioning to bring in new readers, search capabilities and links for audio and video. "That was key for advertising but also for editorial," says Bernstein. "Instead of just reading about a new CD, we can now can attach a video or audio clip to the story. We tell people, ďľ‘You can do audio, you can do video.' We have our own podcasts with 40,000 downloads per episode and we've linked our podcasts to this."

Zenbu is currently working with six other companies, including catalog publishers and magazine publishers such as Doubledown Media, publisher of Dealmaker and Trader Monthly. "We looked at similar technologies and decided to give Zendition a try," says Doubledown president Randall Lane, who adds that for now, the digital editions are being used primarily as an efficient way to serve international readers. "We're continuing to play with it, I think there's a lot of potential there."

Bernstein thinks being a publisher gives Zendition extra appeal. " We're not technology guys trying to apply this to someone else's business, we do this ourselves," he says. "We know the marketing end of magazines, and we know what works and what doesn't. There are revenue streams that are attached to this beyond just the software."

Publisher as Vendor
Zenbu Media isn't the only publisher that's developed its own digital media solution. Enthusiast publisher Force 12 Media, which consists of George Sass Jr. and husband-and-wife team Sean O'Leary and Katie Brennan O'Leary, has developed digital editions to capitalize on how readers are using the Web. "People would read Yachting for boat reviews and lifestyle but no matter what they read, they'd turn to the Web for research when it came time to buy," says Sean O'Leary, who also serves as president.

Force 12 initially looked at outside digital magazine vendors but decided to try building a version themselves.

The publisher leveraged existing relationships with Web designers and a Flash expert who wrote the code (which the partners own jointly).The first digital edition went live in March. Rather than just push the digital edition out to its subscriber list, Force 12 approached some of the top listing Web sites in the boating category with a deal. "We said we'll provide content if you help us with distribution," adds O'Leary.

While most digital magazines still reflect print content, Force 12's digital edition features nearly 85 percent original content. "We didn't want to re-hash the print," says O'Leary. "This is more geared toward a research mechanism that includes Interactive flash and hyperlinks." O'Leary adds that the digital edition is not "100 percent" where he wants it to be yet but the company continues to experiment with formats that allow readers to turn pages by dragging or clicking the upper right-hand corner, and offering a table of contents that pops in and out of the left-hand side.

Going forward, O'Leary says Force 12 will look at forming a joint venture with its current partners, or buying out the designers. "Our goal is to do it completely within Force 12 Media," says O'Leary. "I could have bought a program for $20,000 or had someone host it for us, but it's cheaper to do it ourselves."

O'Leary says he's budgeted $10,000 a month on developing the digital edition, and anticipates $120,000 in revenue from the first six digital issues combined with print. "We're not doing this because its gimmicky, we see it as part of a three-pronged approached: print ad page; digital display advertising that includes hyperlinks in edit; and live events where we will have kiosks with the digital mags online. Whether as a combined buy or not, I still see the electronic side driving revenue."

By Matt Kinsman
05/01/2007







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