Apple Presents Publishers with a Challenge and an Opportunity

The publishing world is up in arms about Apple’s bait-and-switch with Sports Illustrated (“trouble for every
magazine publisher” MediaMemo’s Peter Kafka calls it). Would-be subscribers are in an uproar as well; according to Yahoo News, Time Magazine’s iPad app garnered an average rating of 1.5 stars out of a possible five, with the biggest complaint begin that the $260 full-year price (based on the single-copy cost of $4.99) is way out of ratio to the $20 print subscription.

Welcome to the world of single copy, where that gap has been growing bigger by the year. At one point a 60% discount was considered a slap in the face to the retailers. Now we’re looking ratios of ten to one.

Perhaps this contretemps is an opportunity for us to step back and reassess. Remember how we want our digital readers to pay for content? Remember how we want them to pay for what the content is worth?

Before we rush to give away that same content let’s take a deep breath. Our publishing model has been broken, so say we all, and we seem to agree that it’s been on account of several things. One, though, is the ever-widening gap between subscriptions and single copy. Related, the deep discounting of subscriptions to the point that we’re not getting paid enough to cover the cost of content. A third, the monetization of our sites, and how to get paid for digital.

A picture is forming here.

So all right, we don’t have digital subs yet—at least not for the iPad, at least not through the iTunes store. What we do have is single copy. So now might be a good time to give some thought to what content is worth, especially digital content, especially digital content sold as single copies. And we want to give some thought to what happens when content is too deeply discounted, both in print and online.

We’ve discovered that content, whether or not it “wants to be free”, does cost to create. And we’ve discovered that people can get really used to not paying for content, or not paying much for it. We learned that again pretty recently, we learned it to our cost.

And now is our opportunity, in selling issues one copy at a time, to figure out what is the right price point for the customer—and for us. As Wired magazine’s Chris Anderson said, “the iPad expands the idea of the newsstand.”

Let’s not lose sight of what the newsstand is. It’s an opportunity for our customers to select each issue based on its cover, its editorial, and the choices of words we select to let them know what’s in it. And it’s an opportunity for our customers to show how much they want each issue by paying full price for it…not necessarily the same full cover price of the print version, but whatever we select as the full price for the
digital version. normal"">Publishing Executive’s Thea Selby mentions a sweet spot of $2-$4 for consumer price acceptance. Is that the right point for the publisher? It might make sense to find out, before we train our readers to expectations we can’t support.

The newsstand customer has always been important to every publisher of every consumer publication. Having an audience of single copy buyers essentially defines a publication as consumer. And the newsstand, whether print or digital, gives us dynamic and ongoing opportunities—opportunities for testing, for conversion, for splits…and for revenue.

Revenue that might be important to the future of content.