Pricing and the iPad Digital Magazine
First of all, congratulations to all magazines that have taken the plunge into the world of the iPad. You are the early adopters, those that recognize that there may be true success available by going out early and learning as you go.
And there’s a lot of learning to be done. One of the complete unknowns in the world of iPad digital magazines is price.
What will people pay for a magazine they read on a digital reader? How will they value it? Will the early adopter who buys it value it more than a later consumer? Or will consumers, over time, begin to realize the added value of the digimag and be willing to pay more?
A March 2010 study by the Boston Consulting Group (BCG) tells us something about current price elasticity for digital magazines. Surveying over 12,000 readers in 14 countries, the study indicates that e-readers and tablets will become wildly popular and successful consumer devices in coming years. “Within the next year, 28 percent of all respondents—and 51 percent of those familiar with the devices—plan to purchase an e-reader or tablet. Within three years, 49 percent of all respondents—and 73 percent of those familiar with the devices—plan a purchase,” BCG Media reports.
The survey found that consumers In the United States are willing to pay $2 to $4 for a single issue of an online magazine, and $5 to $10 for a monthly online newspaper subscription.
Interestingly, a review of comments from digital Popular Science reveals a similar range for the magazine, but with decidedly more passion attached to those numbers. A few choice comments:
• “Come on guys, help us help you. You can't charge $5 per issue. This is the future of magazines. This is how I want all of my magazines. But I will not pay $5 per issue. Offer us an annual subscription. I'll be the first to subscribe. But this will be my last purchase of a single issue at $5.” SuperDeano
• “4.99 an issue is more than 2x the paper version. You need to get a clue here. I am for you making a profit but 60 bucks a year is a screw job. Reprice the issues and everyone will buy. Wouldn't you rather lower the price and reach more people or over charge and reach only 1/4th? Fair would be at 2 bucks an issue.” Zeekxxxxx
• Large and N Charge laments, "It breaks my heart to write a 3 star review for my favorite magazine. But the 5 dollar price tag is a bit much… Please Lower (sic) the price or add it to my yearly subscription and get the issues out when they hit newsstands.”
These comments clearly show we are at a crossroads. Readers are willing to pay $5 for a print magazine, but not for a digital magazine. They don’t see added value that comes with interactivity, videos, slide shows, not to mention immediate access to additional editorial or advertiser information. Want to know more about an article or an advertiser? The answer is only a click away, thanks to the connected digimag. The first issue of the Wired digimag was more than 500MB―don’t tell me that’s not a $5 value. Nevertheless, Condé Nast rolled out the second issue of Wired at a $1 discount over the print version, at $3.99.
iPad early adopters are also not distinguishing for the most part between the price they pay for a subscription (generally a much lower price per issue) and the price they pay for a print copy bought on the newsstand. For us, it’s clear they are buying a single copy of a magazine; to them, it’s a rip off compared to their subscription.
Time will tell if we’re able to push up the price of a single copy magazine sale, or if even the iPad can’t capture the full value of the digital magazine. Either way, at least we’re headed in the right direction of getting the reader to purchase content.
Next up: Newsflash: Single copy is the sexiest thing going.
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.