Will Google, Apple and Amazon Fuel Newspaper, Magazine Subscriptions?

While a lot of people in the media industry spent the past couple of years figuring out how to make old media business models work online, and media critics droned on about the death of newspapers and magazines, technology innovators focused on fixing the problem. What problem? Getting consumers to want to pay for digital content.


The New Newspaper, Magazine

Newspapers (in print form) may be “dying” in terms of subscription declines and upside down business models, but devices like Amazon’s Kindle and Apple’s iPad are breathing fresh life into publishing for newspapers, magazines and anything else in print.
Nobody knows for sure how many Kindles have been sold to date, but there are plenty of guesses out there that suggest there are at least 5 million out there. Of course, that’s nothing compared to the iPad. Apple moved 7.33 million iPads in Q4 – more than 3 million than the previous quarter.
That’s enough devices to think about, but there are also tons of new tablets running Google’s Android platform – and the new Blackberry Playbook tablet will be a hit.
All this adds up to a lot of mobile devices in the marketplace – new devices built for a world of digital media. Instead of throwing your slippers on and marching down the driveway to get your paper, you can just turn on your reader.

Same Old, Same Old

Some skeptics might argue new devices don’t change the problem. Publishers have been delivering online content for years and few have been able to drive significant profits from it. True, but these new devices dramatically change consumption habits. People may be much more likely to subscribe to content on a Kindle or an iPad because it’s cool. It’s a new format and it’s convenient.
One major factor that has limited the growth of online subscriptions for publishers is the media industry’s payment infrastructure. Most media conglomerates would like to control distribution and payments, limiting users’ ability to buy subscriptions from competitors. Some businesses have tried to organize publishers through partnership, but the models have failed to gain traction. Amazon, Apple and Google each now have a payment platform that simplifies digital content subscriptions for publishers and consumers alike… at a price of course.

New Payments Platforms

Both Apple and Google have launched services that allow publishers to control billing for digital content subscriptions distributed in apps – turning up the heat on competitor Amazon.
Apple’s subscription billing service lets publishers of magazines, newspapers, music and video set terms This essentially lets consumers buy content for any Apple device they have (not just limited to the iPad). By comparison, Google’s One Pass subscription publishing service makes digital content available across tablets, smartphones and websites – great news for the growing audience of Android users (the second most popular smartphone platform).
All this adds up to more options and flexibility for getting your favorite content. No longer do consumers have to subscribe from each publication’s website. Now they can get all their subscriptions on one platform (or three if you will).

The Downside

Apple takes its standard 30% cut of revenues from App Store purchases. Google OnePass also takes 30%. This may sound like a lot, until you realize that Amazon.com has charged publishers upwards of 70% in the past. It’s a good thing to have all three in the game, since it should drive the split down. There are concerns about the cable/satellite TV problem, where you might only be able to get one type of content on a particular platform. If publishers can keep pushing their content to all three, consumers will be much happier.
Of course, any of these revenue splits will make it difficult to generate significant profits – then again, when you consider the volume of devices in the market place already, and the limited selection of titles that have converted to the new format, there could be some meaningful short-term revenue gains for publishers if they convert their content to the new devices today (for example, you can’t get Men’s Health on a Kindle – you might be more likely to switch to a magazine you can get in digital form).
This is a much better deal for smaller publishers looking to build an audience. Google, Amazon and Apple deliver the audience for those that publish great content. Arguably a new wave of start-up magazines that opt to go all-digital will spring in the near future. Who will be the Angry Birds of digital magazines or newspapers?

For now, consumers are more likely to pay for content they can get on their Kindle, iPad or other tablet or reader – and that’s good news for publishers, Apple, Amazon and Google alike.
What do you think? Do these new devices and platforms create more opportunities for publishers? Do you think consumers are more willing to pay for content on these devices than online content or print subscriptions?