Monday, 9 April 2012

New subscription models: 'Combo' or 'Spotify-like' All-you-can-read


Just last week Next Issue Media launched the Android app featuring the 'All-you-can-read" subscription for 32 popular magazines, the first of its kind in Publishing. The idea is novel and will more than likely attract readers, as it is priced at $9.99 for unlimited access to monthly and bi-weekly magazines, or $14.99 per month for monthlies and weeklies. And the prices include back issues starting from January 1, 2012. This subscription model is 'Spotify-like' as it gives unlimited access to a number of premium magazines. Next Issue Media, owned by Condé Nast, Hearst, Meredith, News Corp and Time Inc., expects the service to feature up to 75 titles later this year. To my mind this subscription plan is good news to the consumer, and particularly a reader with an appetite for a number of quality magazines. Currently a one-month subscription to a particular title e.g. The New Yorker iPad app is priced at $5.99. The downside is that the Next Issue app is only for Android 3.0 and will not work on a Kindle Fire. An iPad version is being worked on and would be submitted to Apple for approval soon, perhaps in the next eight weeks. The Android app (see image below) works like Spotify's unlimited service for music i.e. you will be streaming the content and hence you cannot download issues to read without a WiFi-connection.


Unlike most subscription models for individual magazine titles, this subscription plan does not include the printed versions of the magazines, as it is designed to increase digital readership. The Group of Publishers behind Next Issue Media has a good reason to put its digital editions on tablets. According to the most recent ABC figures (Audit Bureau of Circulation) digital circulation of magazines - on tablets, smartphones and paid websites - has doubled in the past year. However, this is still quite a small percentage of the total business of magazine publishers.

Will this subscription model be attractive to Newspaper publishers as well? And will it increase digital readership of paid content? This remains to be seen and I believe that this subscription model will only take off when it becomes available on the 'mainstream tablets' i.e. Kindle Fire and the iPad. In any case there are already plans in Belgium and Holland to put together a common platform to meet demand for their content - see Dutch, Belgian publishers mull a 'Spotify for newspapers'.

Meanwhile 'Combo' subscriptions for newspapers seem to have been quite a hit in the past six months. The Economist has enjoyed high growth in circulation for the past 10 years and its latest ABC data for July-December 2011 show a total circulation of 1,487,010, approx. 100,000 digital-only subscribers and up to 560,000 digital readers per week. So many readers like me are 'Combo' subscribers receiving the bundled content of the weekly magazine in print plus the digital package including the tablet, the smartphone and the website. Its app has 1 million unique users per month, i.e. people who actually download content for reading (not just the app). Moreover the popular Intelligent Life magazine has a circulation of 175,000 and many readers have opted for the iPad app. The Economist has priced the 'Combo' package including a 51 week subscription of the printed paper at 128 euros compared with 125 euros for a Digital subscription. So for only 3 euros a year you get the print package delivered to your address in Europe. The reason for this is obvious, print advertising is still valuable income for the publisher and it requires a large circulation to give value for money.


'Combo' subscriptions with flexibility for the reader are in demand also in Finland, where the number of tablets is expected to double in 2012. 'Helsingin Sanomat', the leading Finnish newspaper published by Sanoma News, has offered its flexible 'Combo' subscription package since last year, with readers able to pick the print and digital modules as they wish. The 'Combo' model has been a true success story, as one third i.e. more than 120,000 subscribers have opted for the 'Combo' package. As for myself I have opted for the mobile and tablet version 7 days a week and the Sunday paper together with the monthly supplement in print. Combo is the primary new sales alternative and it accounts for more than 80% of new subscription sales. At the end of 2011 the 'Helsingin Sanomat' iPad app had been downloaded to more than 48,000 devices and the number of frequent readers is increasing. However this number is still small in comparison with the fact that Helsingin Sanomat reaches 1.9 million Finns through different channels every week, including the daily paper, the HS.fi website, smartphone apps, the weekly and monthly supplements as well as Radio Helsinki. In the next year the printed paper will have a new look and a tabloid size in print, as the traditional broadsheet paper will become history. The aim is improved usability and from a reader point of view the tabloid is more handy and closer to the tablet format. 

All of the printed supplements are featurde in the revamped iPad app launched in February this year. Sanoma, like most other media firms "need to speed up the transition to digital" as reported in the Sanoma View annual report published in March. It will be interesting to see how tablet readership and advertising will develop in the next 6-12 months, as there are more iPads and other tablets available in Finland.