Wednesday, June 23, 2010

For Mags To Survive, More Reliance On Subscription Revenue

The cable programmer model works really well. It gets money from license fee that is passed from cable operator to consumer and it gets money from :30 advertising. It worked so well that broadcast networks are asking for license fees too. And now the print business is putting more reliance on subscription revenue. With the rise of online access, e-readers and iPads that can provide a digital version, subscription revenue may be print's lifesaver. "Publishers have been criticized for becoming overly dependent on ad dollars while letting consumers off the payment hook by selling cheap (and unprofitable) subscriptions—a disparity that became all too apparent when the ad recession hit."

A consistent license fee from consumers offers an important cushion to the health of the business. And new digital versions of a print magazine with more robust content and interactive access can be more valued by the consumer. Exclusive content access, available inside a walled garden and accessed through subscription could save the magazine business. And it may lead to the resurgence of shuttered magazines like Gourmet. "On June 22, it announced plans for a fourth-quarter launch of Gourmet Live, a food-centered social media app that will be free to download but ultimately be driven by consumer payments. Condé Nast expects to test pay approaches including subscriptions and virtual currencies popular in the gaming arena." It sounds real promising.