When News Corp's Rupert Murdoch took the stage with Apple's Eddy Cue on the second day of February to launch The Daily, everybody was talking about this glossy digital newspaper and the effect it might have on the business of news. But something else happened that day: Apple launched a subscription model that would allow interested parties to receive The Daily on an ongoing basis with recurring billing, a system previously unheard of. If The Daily was going to succeed, the thinking went, it would require a billing system similar to ones already in place with traditional magazines and newspapers. Signing up and paying every single week or paying for one daily issue at a time would be too much of a hassle.
The magazine industry was justifiably excited about the development. But then, when Apple finally made the App Store subscriptions available to other publishers on the iOS platform two weeks later, feathers were ruffled, feeling hurt. It was revealed that Apple would keep a significant chunk of the revenues brought in from digital subscriptions and require publishers to offer the best rates through its own service. Making things worse, Apple's terms keep valuable customer data hidden from publishers that rely on information about their subscribers to sell advertisements around hyper-specific demographics.
Despite protests and foot stomping from most, Apple was able to pull a few publishers in. Elle, Popular Science and Nylon all signed up after deciding that the disadvantages of Apple's system were outweighed by the potential advantages of access to the company's huge distribution network. It's been six weeks. How do those early-adopter publishers feel about their decision to side with Apple?
Nylon, the smallest magazine of the trio and, thus, the one least affected by Apple's decision to withhold subscriber information, hasn't released specific numbers. From the beginning, Hachette Filipacchi Media U.S., the publisher of Elle, cautiously waded into Apple's murky waters rather than taking the deep dive like Popular Science. PopSci, a magazine with more than 1.2 million print subscribers that was founded way back in 1872, is ecstatic about the partnership.
This past weekend, Popular Science sold its 10,000th digital subscription to the iPad edition of the magazine. "We are very excited," Gregg Hano, vice president-group publisher at the Bonnier Technology Group, which includes Popular Science, told Advertising Age. "We really did not have any expectations of what would happen because we're really pioneers." All 10,000 of those digital subscribers have paid $14.99 for a one-year subscription. In addition, the magazine continues to sell thousands of single-issue subscriptions for $4.99 each. About 2,500 copies of the March issue sold as single issue. "We're been averaging 10,000 to 12,000 unit sales per month almost since the beginning," Hano said. "Now we're going to be above that in March. We're inching up over that. And we look forward to continuing to see subscriptions grow."
Advertising Age's Nat Ives points out, though, that Hano and his team have no idea where the audience is coming from. Are these new subscribers, drawn to the ease of use and extra features that come with the digital platform? Or are they former print subscribrs that have shifted, prefering the iPad as a delivery vehicle to a traditional magazine? (While Popular Science is looking to expand its readership and would prefer the fomer scenario, the magazine is making an extra $3 per person per year if they are converting former print junkies; that's the premier for choosing a digital subscription over a traditional one.)
Will more magazine publishers see the success of Popular Science's digital efforts and start using Apple's App Store subscription program? Will the novelty of flipping through Popular Science with the tap of a finger wear off? These questions won't be answered until the subscription program matures a bit more, but we'll be watching. While other publishers hesitate, PopSci and parent company Bonnier will continue to push ahead, building a bigger lead over the competition. "Hopefully people keep testing Popular Science on their tablets," Hano said, "and then hopefully come back and subscribing."
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