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Publishers Continue to Look for Tablet Relief Outside of iPad

Hopes for Amazon tablet, other viable alternatives.



Stefanie Botelho By Stefanie Botelho
09/01/2011

Though magazines releasing digital editions have provided plenty of headline fodder over the past months, sales of those editions have been another story. More publishers (including Conde Nast, Time Inc., Hearst and now Martha Stewart Living Omnimedia) have submitted to Apple’s subscription terms in order to access sales on the iPad, seemingly the only tablet game in town. But, as WWD reports, publishers are still hoping for a tablet option with “more media-bottom-line-friendly business models”.

Sarah Rotman, a Forrester senior analyst, tells WWD relief may be coming soon, “Amazon is expected to come out with something. Our data show there is demand among consumers for a tablet that’s not the iPad. But so far, there are no good alternatives.”

But even if Amazon does release a tablet comparable to Apple’s iPad, it doesn’t necessarily mean publishers will get a break in rev share or user information sharing. In late 2010, Amazon changed its policies, as publishers kept 70 percent of revenue from Kindle sales. Previously, the retailer took as much as a 70 percent cut.

Some publishers are tapping out of the Apple game, with Playboy and Financial Times releasing web-based apps for a similar in-app content experience found in the iTunes store. Due to lack of compliance with Apple rules, FT’s main content app was pulled from the App Store this week; its advertising-sponsored apps (such as the Little Books of Business Travel) are still available for purchase through iTunes. Playboy’s content was deemed too risqué for sale in the Apple store, so the publisher created an HTML app formatted for viewing on the iPad instead.

Digital Sales: More Tablet Blues for Publishers

Apple’s sub rules are only a part of publishers’ struggles to create a solid business out of digital edition sales, as digital subscriptions haven’t been the big draw publishers initially hoped for. Conde Nast claims 242,000 digital downloads of its tablet editions since signing on with Apple in May; but as WWD cites, production of a digital edition can cost $20,000 to $40,000 per issue.

Hearst president David Carey predicted earlier this year that tablet sales could represent 20 to 30 percent of magazine circ for the publisher. It seems as if this number isn’t a reality quite yet, as Carey said earlier this week, “Well, I didn’t give a timetable.” Carey would only comment on tablet sales as “strong”, as Hearst is set to officially reveal its digital download numbers this fall.

The Economist is experiencing its own set of digital woes; the publication recently announced its highest North American sub number in its history, with 844,387 subscribers. Unfortunately, digital subscriptions are slower moving. Though the publisher says digital subs are four times higher than last year’s number, only 5,245 have been purchased so far.

Time Inc. is making sure its titles are available everywhere they can be downloaded, with digital magazines on the Barnes & Noble NOOK Color, the iPad and the Android platform. According to Steve Sachs, executive vice president of consumer marketing and sales with the publisher, “Hundreds of thousands of current print subscribers have upgraded their subscriptions to include the tablet editions for free. We’re partnering with every major tablet manufacturer, and ultimately consumers are going to choose the winners here.”

Sachs cites 11 million downloads for digital editions and other Time Inc. apps to date.

An unlikely competitor, Barnes & Noble is carving its own niche in the tablet space. The NOOK Color (the original NOOK was initially designed as an e-reader for books) has been updated in recent months to compete with tablets. The device now has internet capabilities, email access and over “100 top magazine titles” on its newsstand. Barnes & Noble is seeing a strong return on its digital investments, as the company’s financial statements report digital sales were up 37 percent to $198 million in the first quarter.

With Barnes & Noble’s NOOK showing this kind of growth in digital downloads, as well as an Amazon tablet that is likely to debut this fall according to Rotman, the iPad may not have to be publishers’ only path to download payoff in the near future. As cheaper tablet options arise, and consumers continue to transition their reading to the digital scape, publishers like Hearst may see that “20 to 30 percent” circ prediction come to light.

Stefanie Botelho By Stefanie Botelho
09/01/2011







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