Devin Coldewey on why Conde Nast is pressing the PAUSE button on tablet editions of their magazines:
Despite there being perhaps 20 million tablets out there right now (all inclusive), it doesn’t appear that people are really eating up the digital edition — Popular Science reported as much of its iPad subscriptions, which at 10,000 aren’t microscopic, but are still dwarfed by paper sales. Conde Nast isn’t reporting any statistics, but it seems safe to assume that they’re seeing similarly disappointing results [...] Furthermore, people are still naturally attracted to the enormous volume of free content on the web, some of which they’d be paying for unnecessarily by subscribing to this or that (like the recent NY Times paywall).
About that paywall, keep in mind what our favorite Daring Fireballer had to say last month about the ambitious pricing infrastructure that Conde Nast set to power NY Times’ digital suite:
This brings me to The New York Times’s new digital subscriptions. They’re neither easy-to-understand nor sound like a great value. Unlimited access to the NYT costs four times more than Netflix — $35 every four weeks. You can pay $15 or $20 every four weeks instead, but then you’ve got to choose between using a Times app on your smartphone or iPad (respectively). And how many normal people realize that if you, say, opt for the $15 plan, that you’ll be able to access the Times website from your iPad?
Netflix: one price, access from any device.
New York Times: three tiers, arbitrary division between devices based on screen size.
Both companies also have legacy businesses. Netflix’s legacy business is home delivery of DVD and Blu-ray discs. Pricing for this service starts at $2/month in addition to the basic $8/month plan. It makes sense: every Netflix customer gets a digital subscription; those that want a physical product too pay a little more. The pricing steers people toward a digital-only future.
The New York Times’s legacy business is the printed newspaper. They charge less for a print subscription than an all-inclusive digital subscription, despite the fact that all print subscriptions include an all-inclusive digital subscription. This makes no sense. You pay less but get something that intuitively bears a significant real cost: hundreds of pounds of printed newspaper delivered to your home throughout the year. The pricing steers people toward the legacy business.
Now, back to Coldewey’s piece:
What will it take to bring digital magazine subscriptions in line with paper? More volume in tablets, for one thing. And a lot of tests looking at how and why people pay for and consume various digital items in a “light computing” environment like the iPad. Despite being over a year old, the tablet market is still very much in flux, and adjustments are being made. Conde Nast is probably doing the right thing by tugging on the reins after being in too great of a rush to begin with.
Bullshit. Forget the consumer trends on “light computing” environments like the iPad; forget the nascent flux of digital magazines and tablet computers. “What will it take to bring digital magazine subscriptions in line with paper?”
PRICING. If publishers like Conde Nast want to penetrate the digital magazine market in the context of tablets, they need to be less greedy. It’s a glaring paradox: The less a publishing giant charges potential subscribers for a universal digital suite of quality-content products, the more said publishing giant will succeed. The rest will follow suit.
Consider the astute thoughts of anonymous commenter, Weatherman, on Coldewey’s article:
I am currently a subscriber to Wired magazine, and I’d much rather read it on my iPad, but the fact that I only paid $10 for a year of Wired magazine but would have to pay $60 a year to read it on my iPad is what’s stopping me from going digital. If Conde charged $10 a year for digital subscriptions and gave it free to people who were subscribers to the physical edition, I think they’d convert a lot of people and end up saving a lot of money in print and shipping costs when people start going digital. But that’s not the way that Conde or the other magazines see it; they see a digital “app” edition as a premium product, which it is not. The PAPER edition is what is the premium product, and those who want paper will pay for it, and continue to subscribe. An app version at this point is just what they need to put out in order to save their business, and if they do it right they can cut overhead at the same time, and make themselves profitable. But if they try to charge a premium for digital content, they only end up shooting themselves in the foot [...]
The cluelessness of the publishing industry is akin to that of the record companies back in the 1990′s [...]