How much money do publishers make on tablet sales?
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.
- An average cover price of $4.00
- An average frequency of 5 times a year (putting all the monthlies, weeklies, and quarterlies into a big pot)
- An average number of customers of 1,000 per issue
- An average remit of 30% to the tablet/70% to the publisher
- An average price of $9.99 a year
- 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.
- Yearly Revenue, TAB $2.3 million
- Yearly Revenue, PUB $5.5 million
- 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
- 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.