Time Inc. Begins Offering Digital Magazine Subscriptions in Newsstand

Discussion in 'MacRumors.com News Discussion' started by MacRumors, Jun 14, 2012.

  1. macrumors bot

    MacRumors

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    As noted by AllThingsD, Apple and Time Inc. appear to have settled their long-running differences over digital magazine subscriptions, with Time launching iPad-only subscriptions for its magazines through Newsstand. According to a press release from Time, the offering addresses all 20 of its consumer magazines, which include Fortune, People, Sports Illustrated, and Time.

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    Time was prepared to launch iPad subscriptions for Sports Illustrated two years ago, but Apple refused to allow Time to bill subscribers directly rather than going through the iTunes Store mechanism where Apple would keep 30% of the revenue and limit publisher access to subscriber information. As a result, iPad users were initially limited to purchasing titles on a single-issue basis.

    Nearly a year later, Apple and Time reached an agreement to allow print subscribers to receive free access to the iPad editions of the publisher's major magazine titles. But digital-only subscriptions remained off the table even as other major publishers such as Hearst were accepting Apple's subscription terms and rolling out their own offerings.

    AllThingsD notes that it is unclear what changed between Time and Apple to now allow full-fledged digital subscriptions, including whether Time simply relented or if it was able to obtain some concession from Apple.
    Digital subscription pricing for Time titles varies, but a flagship title like Sports Illustrated is being offered at a $3.99 monthly rate or a $38.99 annual rate, a significant discount from the $4.99 single-issue pricing for the weekly magazine.

    Article Link: Time Inc. Begins Offering Digital Magazine Subscriptions in Newsstand
     
  2. macrumors 68020

    Apple...

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    #2
    Am I one of the few that still doesn't use Newsstand?
     
  3. macrumors G3

    rhett7660

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    #3
    Nope. I think there are a few who still don't. I have it for just a few magazines that are not offered via zinio. I like it, no complaints. Wish the prices were a little better than their printed version. But that is for another topic. :)
     
  4. macrumors newbie

    Joined:
    Oct 27, 2007
    #4
    Newsstand

    I think the majority don't use it. I keep looking at iTunes o see if anything pops up that want to subscribe to, but its a lot of fringe/garbage magazines. I just don't understand why digital editions of newspapers & magazines cost as much as print when they have nowhere near the production and distribution cost.
     
  5. macrumors 68020

    Apple...

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    #5
    I was just wondering. The only magazine I read from time to time is Reader's Digest, but I get the print version of it in the mail.
     
  6. macrumors member

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    #6
    One word



    Greed...
     
  7. macrumors 6502a

    mw360

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    #7
    Probably because the value to you is pretty much the same, possibly even higher than the print version.
     
  8. macrumors regular

    Newfiebill

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    #8
    Good Old "Business 101"... nice!
     
  9. macrumors 601

    HobeSoundDarryl

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    #9
    Ummm, Apple is adding a 30% right off the top as a new cost. The magazine's business model is based upon getting 100% of the net price of the magazine. Yes, some of that 100% goes to printing & distribution but traditional printing & distribution delivery doesn't involve giving Apple 30%.

    Or, another way to think about this: if Apple took 5% or 10% instead of 30%, the pricing offered to us could be cut by 20-25% and Apple could still make money being a digital distributor for these companies. 30% of gross is a LOT of new cost.
     
  10. Rocketman, Jun 14, 2012
    Last edited: Jun 14, 2012

    macrumors 603

    Rocketman

    #10
    It was a negotiating position on the part of Time and the Apple ecosystem is too pervasive and fast growing to ignore now.

    As a former magazine publisher myself I can clearly say a 30% fee for all the services Apple offers is cheap:

    Hosting (printing)
    Distribution (mailing)
    Prospect visibility (mailing lists and postage)

    About the only thing Apple does not provide within the 30% is differentiating advertising and off network promotion, but Time sure better have a 15%+ budget for that above the 30%. Since they are in a transition right now they have the entire print ecosystem cost and the entire digital ecosystem cost. Adobe has been making dual format software for almost a decade now so we are probably in an era of make once, output several.

    To me the prime advantage of online sales is library titles discovering a new life and revenue as a result of searching and recommending.

    I have been selling online since 92 and I still have 30% of my user base who transacts offline, probably after at least some exposure to our online visibility since we no longer print and mail a catalog.

    If you work for a university or instrument company, buy a rocket and fly it.

    One of the key benefits to Apple for the Facebook integration is recommendations among your friends and groups to help you separate the wheat from the chaff on stuff you actually care about. We'll see.

    Rocketman
     
  11. macrumors regular

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    #11
    I think these digital subscriptions would attract more readers if prices were lower. They seem to be using old school pricing strategies, as though people valued a digital version as much as the traditional print. But they generally don't. There is so much digital content out there that most people just jump between free sources and still have too much to read.

    People also don't keep digital files like heirlooms or collector's items like they might have for older print magazines.

    Digital magazines would be much better off pricing these as the throwaway experiences they are. People will flip through and then move on. As such, I'd probably only pay $0.99 for monthly subscription. But at least they'd get something. As it is, I wouldn't pay $4.99 or $3.99 for any of this stuff and I suspect most people wouldn't either.
     
  12. NAG
    macrumors 68030

    NAG

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    #12
    Honestly, it isn't the cost keeping me away. It is the stupid format they use. They're all huge images that are enormous in size (and hence take a long time to download). Even the digital only magazines are doing this (and the layouts are essentially static/pretending to be print).

    Basically, I'll pay the price but only if you don't treat me like a second class citizen/after thought to try to get a few more dollars.
     
  13. macrumors 6502

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  14. macrumors 68020

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    #14
    I second that, I can still subscribe to most magazines for $6 a year (Details, Spin, Fast Company, GQ, etc...) and a little more for weekly ones, why would I pay 1000% more just to see it on my iPad?
     
  15. macrumors 65816

    notabadname

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    #15
    Finally, at a fair price too. I am all digital on my subscriptions now. But 4 of them are at Zinio. Some, such as Car & Driver are truly enhanced over the print edition, even though significantly cheaper. Car & Driver has really taken advantage of the iPad (like the Daily) and enhanced the content, instead of just providing a PDF of the print issue like most due.

    I will get this magazine, and it will join Consumer Reports (which is also iPad enhanced) as my only 2 Newsstand issues.
     
  16. macrumors 68030

    peterdevries

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    #16
    Well, some magazines such as Wired and Empire Movie Magazine actually offer a lot of interactive stuff, so production is more cost intensive, but you definitely have a point in distribution. And I assume that the publishers try to recover part of the 30% that Apple takes for hosting and distribution from the customer, hence the higher price..
     
  17. macrumors G3

    QCassidy352

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    #17
    These are nice discounts though. I'd think about SI or time for 4 bucks a month.

    ----------

    Nice idea, but galleries are gone - photo stream sharing is the new galleries. Good point in the petition about time wasted arranging, but that decision isn't getting changed.

    Ditto iDisk. And frankly, once you go Dropbox, you'll forget iDisk existed.

    The hosting is another matter though. That's one they should really find a way to save.
     
  18. macrumors 6502

    Joined:
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    #18
    Very interesting. This may mean that Time Warner, the parent company, is beginning to negotiate with Apple. Do you suppose they will also start talking about tv content i.e. HBO? It seemed impossible just a few weeks ago.
     
  19. macrumors 68040

    Mad Mac Maniac

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    #19
    Oh really? Do you work for one of these companies? Can you really attest to that? There are a lot of extra costs that go overlooked like developer cost, the 30% cut to apple, etc. You really can't say which is significantly more expensive, unless you know.
     
  20. macrumors 65816

    Joined:
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    #20
    Some magazine prices are pretty good. You can get one month subscriptions to Wired for just $1.99, which will usually run into the next month and give you two issues for that price. That's a great bargain!

    The print industry's business model is not based on the sales price. It's the opposite actually. After you remove the store profit margin (35%), and the distribution, transport, and printing costs, you've easily eradicated the entire cost of the magazine. The company does not "rely on 100% of the selling price", they make all their money from advertising. The selling price merely covers the printing and distribution.

    So these companies should technically be able to sell the iPad versions for free, or at the very least much cheaper.

    I think Apple's 30% is quite fair compared to traditional retailer's 33-35%, don't you think? Especially when you consider Apple are not just acting as the retailer, but also as the printer, distributor, and transportation.
     
  21. macrumors G3

    charlituna

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    #21
    I would love to see a real breakdown of production costs to see if that 30% is an issue. Apple allows you to do things like Netflix off a website and my comixology account from pre iPad was no issue.

    Personally I suspect the real issue was that Apple wouldn't give up demographic info to Time. They need that to command better ad revenue. They can get it when folks subscribe directly by asking the customers for it, but Apple won't do the same for iTunes bought stuff. And since that's where the real money comes from
     
  22. macrumors 6502a

    fruitpunch.ben

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    #22
    does anyone know the yearly cost of the iPad only subscription for Time Magazine? I have been almost burned before by companies that provide free iPad subscription with the paper magazine, but then still make the iPad only subscription the same price as the paper one!
     
  23. macrumors member

    Joined:
    Feb 22, 2012
    #23
    If, as a publisher, you publish a hardback or paperback novel priced at £9.99, Waterstones (as an example) will not pay a penny more than 50% of the cover price to buy it from you, And, in a lot of retail chains, including the larger franchises of newsagents, the same applies. Consequently, Time will get nowhere near 100% of the net price for a printed magazine, more like 50% (the newsagent pockets the rest), plus they STILL have to fund printing and distribution. Consequently, Apple only taking 30% starts to look very inviting indeed.
     
  24. macrumors 603

    Rocketman

    #24
    In the process of creating a magazine you collect a bunch of useful and interesting content you have no room or format to print.

    The huge advantage to websites and eZines is you can include all content you want since the format is not length or volume limited. Further you can publish a thumbnail photo or video and click to see a full size version which does not bog down the browse mode.

    Only when content makers utilize the format advantages of eZines will picky internet users be willing ot pay a premium for the "magazine", which for all practical purposes is a bite sized subscription website.

    But there does need to be a way to monetize actual physical travel reporting and professional press in order to maintain the considerable advantages of a fact based and smart and investigative press. It is critical to our form of government and lifestyle.

    As far as Apple's cost basis for the services they deliver for 30%, it is very low marginal cost and high fixed cost, but a small fraction of the take. Therefore Apple will evolve further services they offer for the 30% as they cover the capital costs. About the only marginal costs is bandwidth which is trivial for a single use or download item, but non-trivial for something where you also have streaming and restreaming rights. That bandwidth is paid for twice. The sender and the receiver both pay provisioning costs.

    Rocketman
     
  25. macrumors 6502

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    London, UK
    #25
    "#1 content providing media conglomerate worldwide" VS "leading mobile OS platform in need if quality, exclusive contents to keep its advance vs Android and Amazon and Windows and soon in need of exclusive premium TV contents"


    I guess those 30% are smart and CAN shrink to à more moderate figure.

    Plus Bewkes is really pushing the Contents Everywhere initiative.


    I guess it is a win-win, good to see competition avoiding us the pain of an Apple hegemony.
     

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