E-Media Strategist: A Controlled-Circ App Strategy
While not a direct measurement of app potential, this is a very strong indicator that a large enough base of tablet users just doesn't exist in your target audience against which to generate significant and sustained ad revenue. Yes, when you include smartphones like the iPhone, BlackBerry and Android, that potential audience increases. However, because of the screen size of the smaller devices, significant development and production work must be done to adapt a magazine to them and still be effective—and the publisher now has to sell a completely different product.
What to Do?
So what's a controlled-circulation publisher to do? My advice is to stop looking at a digital magazine app as its own product and revenue stream. Instead, look at both magazine apps and Web-based digital magazines as extensions or even replacements for your print circulation. Sell a single product that is distributed three ways.
For example, look at digital editions. Just a few years ago, these Web-based, page-flipping, digital replicas of print magazines were seen as a publishing panacea—the same way many publishers look at magazine apps today. With digital magazines, publishers could produce the same products, sell them the same way, but reduce printing and distribution costs while selling add-on sponsorships and interactive advertising options.
And they worked … sort of. Many controlled-circulation publishers today have digital magazine distribution representing 15 percent to 20 percent of their qualified circulation. This represents a nice cost reduction, but very few publishers now look at digital magazines as a significant add-on revenue stream. There simply isn't enough digital circulation on its own to sell interactive advertising upgrades.
So here's one strategy for controlled circulation publishers:
• Use one of the major digital magazine technology vendors to power both your digital magazine and create an app for your publication. The cost for this is actually quite affordable (it can be less than $1,500 per issue depending on the exact needs of the publisher), and not much additional work is required.
Eric Shanfelt is the founding partner of Nearview Media, a consulting firm that helps publishers with their digital revenue, audience and platform development. Eric is a 25-year digital media veteran and has been the Chief Digital Officer for several large publishing companies. You can reach Eric at firstname.lastname@example.org.