Digital Subscriptions Are Not Exactly Taking Off – Hearst Only Boasts of 800 Thousands Subscriptions
It’s long been obvious that the pipedream of selling content on the iPad was never going to generate as much revenue the early hype suggested, and today there are new signs that selling subscriptions to the digital content might not be as lucrative as some had believed – a detail which the failure of The Daily made quite clear.
David Carey, president of the magazine and media publishing conglomerate Hearst, sent out a "state of the company" email this week. There are a bunch of interesting details in the email (which you can find here) but I just want to cover exactly 2 points:
Print is doing very well, with a number of new titles launching successfully in a bunch of international markets. Digital is not doing quite as well, though Mr. Carey is still pleased with the progress:
In keeping with our UNBOUND positioning, we made impressive gains in digital media. By the end of the year, we counted nearly 800,000 monthly digital subscriptions in the U.S. across iPads, NOOKs, Kindle Fires and Android devices—the highest in the industry. Those subscriptions are now generating profits after 24 months of investment. And how exciting to see how this business is developing organically: More than 80 percent of our digital subscribers are new to our files, and their engagement levels meet or exceed the high levels we see from our print products.
While 800 thousand subscriptions sounds like a lot, it really isn’t. According to their website, Hearst publishes 20 titles in the US, so if you divide the total number of subscriptions by the title count you end up with a much less impressive 40 thousand. Considering that any one of those 20 titles has a subscription base in the millions, 40,000 subscriptions isn’t a whole lot.
Take Seventeen, for example. While I’m sure all Hearst magazines have their subscription data where advertisers can find it online, I happened to find this one first. This magazine boasts 2,000,000 print subscriptions. Cosmopolitan, another Hearst title, has 3,000,000 print subscribers.
Between the 2 magazines, Hearst has 5 million print subscribers vs a nominal 80,000 digital subscribers. That’s not much, and that figure comes nearly 3 years into the iPad app era, 3 years from the point where digital magazine content was supposed to have taken off. What’s more, Hearst has actually been into digital magazines since long before the iPad. I can find them listed as a Zinio partner way back in 2006 and 2007.
Just to put this into perspective, Hearts boasts of reaching 87 million Americans each year, making the 800 thousand worth only about 1% of their reach. They also launched a new title this year, HGTV Magazine, and its print subscriptions hit 750,000 subscribers this year.
I won’t go so far as to say digital magazines are a failed concept, but I do think that we still have not yet seen the ignition point. Sales are growing, but they’re not exploding like ebook sales were after the Kindle Store launched.
People simply aren’t adopting digital magazines in droves.
If anything, I think publishers are going to have to rethink the magazine paradigm. Existing print titles are tied to the idea that the content comes out in a huge monthly (or weekly) bundle, half of which is adverts. That single monthly bundle is a business decision, not one based on the original non-ad content, and it perhaps should go by the wayside.
Edit: As Jon Jermey pointed out in the comments, a monthly magazine issue is to an article what the CD was to a track. I think it’s time to break up the bundle into smaller pieces of content, and possibly even to selling the individual article. Given the growing recognition of short works like Kindle Singles, it’s not such a stretch to think that this could be a functional business model.
The digital magazines which I will be watching this year are the several newbies which have only a few stories per issue. The Magazine and Symbolia are offering content in smaller bite sized bundles rather than the single huge monthly bundle. This could be the way forward.
Cherie January 2, 2013 um 11:46 am
In my experience, print subscriptions seem to be cheaper. I can get a Marie Claire print subscription for 12 dollars but if I decide to do digital its 19.99. I know some magazines have it where if you get a print subscription you can get the digital subscription as well but I don’t need duplicates.
Juli Monroe January 2, 2013 um 12:08 pm
I think you’re spot on with the monthly magazine not cutting it digitally. I’ve tried an SFX subscription twice now, once on my (now departed) Nook Color and now on my iPad. I like it. It’s a good magazine, and it’s not bad in digital form (though it could be better). But I’m not going to resubscribe after my initial 3 months because it’s only once a month. I’m used to content being served up more often than that. I’m keeping my Time subscription. Once a week is fine with me, and it’s got a better digital layout.
Nate Hoffelder January 2, 2013 um 12:21 pm
Whoops. Forgot about the weeklies.
But even the weekly titles are too big of a bundle, IMO. I think they should be smaller still.
Richard Adin January 2, 2013 um 2:05 pm
I haven’t tried a magazine subscription, just a newspaper subscription to the New York Times. The digital subscription costs 1/3 the price of the print, but I have canceled my digital subscription and returned to the print edition. There are several reasons, not least of which is that I reliably receive the print version by 3:30 a.m. every morning so that I can read the Times with my breakfast. The digital version sometimes arrived at 5:30 a.m. but more often was later, sometimes 16 hours later.
I subscribe to about 25 print magazines and won’t change. Those magazines that I did subscribe to that went digital only, I canceled. I’m not ready to be surgically attached to my computer or my ereader.
Karl January 2, 2013 um 2:18 pm
One should not overlook the second hand use of print magazines. All of my print subscriptions get donated to the hospital so that both visitors and patients have something to read. Can’t do that with my digital subscriptions. Interestingly you would think the advertisers would be concerned about the lack of secondary readers of their advertisements when an issue is sold in the digital format.
Mike Cane January 2, 2013 um 2:42 pm
Seventeen readers are more likely to have iPhones over tablets (only the outcasts would have Android phones) so it all depends on how well it translates to a palm-sized format.
Also, I’d bet most subscribers are iOS, not Android. See here:
Jon Jermey January 2, 2013 um 3:49 pm
Surely the digital magazine is to the single article what the music CD is to the downloaded track? If it makes sense for music consumers to pay for and download only those tracks that they want to hear, then it makes sense for article consumers to do the same thing? Bundling unrelated content of variable quality and interest into a take-it-or-leave-it package is so twentieth century.
Nate Hoffelder January 2, 2013 um 4:02 pm
That was exactly the metaphor I was looking for. Thanks!
Robert Nagle January 2, 2013 um 4:14 pm
I would gladly pay for a digital subscription to Houston Chronicle (a Hearst pub), and in fact did so for 2 consecutive months until I cancelled in disgust. The cost was $7 a month or something like that, quite reasonable for a daily newspaper subscription.
Here was the problem. First, the primary context in which I wanted to read the newspaper was on the bus to work. But their offline mode was terrible. You could set up some kind of archive of the daily edition, but it took a good 15 minutes to download. Why? The app was spending most of its time downloading obituaries, sports pages and ads, ads, ads. i.e.,, things I cared not one whit about. Second, its ad server (whether offline or online) was very intrusive. I might have expected it in a free app, but non in the premium app.
I realized that the most important thinking for the app went not into usability or layout but simply how to maximize the number of ads being sold. And that seemed to be the reason why I rarely used the app.
OT: my Nook Simple Touch broke, and I broke down and bought a Nook Tablet. Surprise surprise! My magazines downloaded looked entirely different! Apparently they have some sort of fixed layout reader to serve the publication which renders 1 magazine (The Nation) totally unreadable and the other magazine (New Yorker, from Conde Nast) to be barely readable. They have a special "ArticleView" for reading articles which uses (I kid you not) a column one third the width of the screen. That’s right, if I want to read Nation on my Nook tablet, I can only read the articles using the column 1/3 the width of the screen. The New Yorker magazines look a little better — I suspect Conde Nast was the instigator behind BN using this stupid reader — but it now forces you to wade through 3 full page ads for every page of actual content.
I think the reason subscriptions aren’t taking off is that magazine couples are trying to create an ad-rich environment rather than a readable publication.
fjtorres January 2, 2013 um 4:31 pm
In the magazine business readers are more of a product than a customer. The goal is to appeal to the readers just enough that their eyeballs can be sold to advertisers. That is the same as Google and like Google their products are generally designed to be just good enough instead of being designed to be best-in-class as standalone commercial products are.
From the beancounter point of view the less amount of effort and money they spend developing their app/portal/delivery system, the better. Especially if the number of subscribers are running in the 4-5 figures rather than 6-7 figures.
fjtorres January 2, 2013 um 4:20 pm
Finer-grained subscription bundles do make a lot of sense.
One that comes to mind is THE ECONOMIST which is a weekly in both print and digital but is supplemented by a full set of associated blogs, some of which are updated daily or even several times a day as events warrant. They seem to be doing a good job of straddling the world of online news-sites and weekly newsmagazines.
oj829 January 2, 2013 um 4:29 pm
We sub dead-tree "New Yorker" and so have "enjoyed" unfettered access to their online edition (which sucks so, so hard on a desktop and was unusable on a 7″ Android tab) and, then about six months ago they FINALLY introduced color-device subscriptions to Nook tablet owners. Great, right? On a brand-new NookHD… the experience sucks. No zooming? (Really, Conde Nast?) The font size your designers dictate is the size YOU WILL USE. In 2013.
We also dead-tree New York Review of books, which means we get behind the website’s paywall. Sounds trivial, right? But reading their site on even the dumbest color 7″ tablet we have is like a dream.
Do it right or keep it simple.
Nick Bang January 3, 2013 um 6:14 am
Well, yes, keeping it simple, especially as vendors offer terrible technical support (they should be specialists in their field, they are overlooking so many important things when it comes to magazines and books… like basic typography for exemple).
Blame that on vendors, they are not doing their best to improve the quality of digital pubs.
Bernard Speight January 2, 2013 um 8:52 pm
I must say my experience reading New Scientist (a weekly) in my iPad Mini is very positive.
I have gone from a print + web subscription, where I never used the web option, to a tablet + web + smartphone sub, and saved a significant amount of money in the process.
More importantly, the publishers/producers have done a good job of translating the print edition into a readable, browsable, enjoyable magazine, that lets me experience it the way I want to. It allows zooming, and remembers the zoom as I move from page to page, This is important for me, as the default print size resulting from one page per screen is just too small for my eyes.
The frequency of adverts is much as I remember it from the print edition, and is not at all intrusive.
Now, how much of the outcome is due to features of the jPad Mini, and how much is due to the effort of the magazine producers I don’t know, but I am certainly well satisfied with the result.