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Principal in Next Steps Marketing

The Digital Market

By Thea Selby

About Thea

M. Thea Selby is a Principal in Next Steps Marketing, a San Francisco boutique firm that solves audience-building challenges in creative, customized way using practical "call-to-action" marketing techniques where the return is clearly measurable by clicks, online sign-ups, responses to direct mail, orders from partners, or sales at newsstand.

She was the 2010 Women's Leadership Conference Chair, is a co-founder and board member of Exceptional Women in Publishing—a national organization dedicated to supporting women in and through the power of online and print media—and is the former CEO and Publisher of Light Green Media, a digital publishing company.

 

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How much money do publishers make on tablet sales?

 
Get the Flash Player to see this rotator.
 

Having given the old college try on how many magazines are being sold on tablets, this week, I’m going to do some simple math with quite a few assumptions to come up with a rough estimate of how much money tablets are making publishers.

I did a calculation assuming all sales to be single copy sales on the one hand, and all sales to be subscriptions on the other. The truth lies in the middle, as the iPad did not have subscription sales at the start.

Let’s start with single copy sales.

My assumptions:

  1. An average cover price of $4.00
  2. An average frequency of 5 times a year (putting all the monthlies, weeklies, and quarterlies into a big pot)
  3. An average number of customers of 1,000 per issue
  4. An average remit of 30% to the tablet/70% to the publisher

Subscriptions assumptions:

  1. An average price of $9.99 a year
  2. An average of 1,000 subscriptions a year sold

With these assumptions in place, here are the dollars, in millions. Click on the chart above to see it in a formatted version.

Nexus—No Subscription: 

  • Yearly Revenue, TAB  $2.3 million
  • Yearly Revenue, PUB  $5.5 million 

Nexus—Subscription:

  • Yearly Revenue, TAB  $1.3 million
  • Yearly Revenue, PUB  $3.1 million

Apple iPad —No Subscription

  • Yearly Revenue, TAB  $15.5 million   
  • Yearly Revenue, PUB  $36.2 million

Apple iPad —Subscription

  • Yearly Revenue, TAB  $8.9 million   
  • Yearly Revenue, PUB  $20.7 million

Amazon Kindle—No Subscription  

  • Yearly Revenue, TAB  $3.9 million
  • Yearly Revenue, PUB  $9.1 million

Amazon Kindle—Subscription

  • Yearly Revenue, TAB  $2.2 million
  • Yearly Revenue, PUB  $5.2 million


We see a low in revenue of Nexus, earning only $1.3M out of magazine sales per year, and a high from the iPad, of $15.5M per year. On the publisher’s side, since they receive 70% of the revenue, the aggregate revenue is a low of $3.1M with subscription assumptions for Nexus and a high of $36.2M assumptions for the iPad.

Are these estimates low? Are they high? I think they are very low. Read my next blog to find out why.

Note: I want to thank Barbara Scott, my partner in research crime, for her continued research support.

P.S. I’ve tried to answer the questions posed in the comments section. Please feel free to email me if you feel you’d like to continue the conversation.

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