Wednesday, 26 October 2011

Digital content sales surge - good news for media companies

Media content sales in digital format is a hot topic, especially for those working in the media industry worried about the downturn in the circulation of printed newspapers and magazines.  
With the introduction of iOS 5 Apple also launched a new App intended for easy access to media content. Subscriptions are made easy and new issues are automatically updated. As for myself I have already subscribed to three magazines for the iPad and enjoy the ease of use of the Newsstand App. I'm also quite fond of The Guardian newspaper App included in the Newsstand. Very well done.


U.S. publishers are seeing some early success in this market: Publishers see Apple Newsstand sales surge. The critical question is will this trend continue and how will advertising sales follow, as advertising has been and is the cornerstone in the business model of publishers of newspapers and magazines worldwide. In Finland subscriptions make up to nearly 85% of the revenues of magazine publishers, but for newspapers advertising is more crucial for the current business model based on a printed newspaper delivered to every home. 
It will interesting to see how many European publishers will opt for Newsstand, as many have been reluctant to Apple's policy of charging a 30% commission on the revenue generated from Apps. Time will tell.


Some publishers, like the Financial Times have opted for their own concept of introducing apps. In August FT pulled out of App Store and introduced their own App based on HTML 5 - see FT App. Now more than 15% of FT:s paid content is generated from tablet subscriptions. Digital content sales overall are booming for FT - see the link for Financial Times digital subscription growth