Remember the last time you picked up a printed magazine from a newsstand? Three months ago, when I forgot to bring my headphones on a long train ride, I decided to purchase a good old magazine to kill some time. Upon making my way into the newsstand in the train station, I was facing hundreds of options to choose from. Whatever you are interested in, may it be sports and fitness, business or law, motor vehicles, travelling, interior design or cooking, art and fashion, philosophy or psychology, cross-words or knitting, you will find a magazine about it. I ended up with three different journals at a total of €25, because I was interested in a few articles in each of the journals. And after I finished reading the exciting parts, I disposed of the magazines.
Clearly, several inconveniences make the traditional magazine an unattractive choice for consumers in the digital age. First of all, magazines outdate very fast, they come in unhandy shapes and size, are not environmentally friendly and consist of advertisement by half. Second of all, you are probably interested in reading only one interview or article, and specialised journals can be very pricy. In general, consumers can buy, access and consume content in three different way. The first one is the traditional way of shopping at a newsstand (and buying impulsively). The second and more cost-efficient way is paying for an annual subscription to receive the latest issue every month via mail. Lately, most magazines offer an online subscription with access to web content, often combined with a mobile app. Consider the example of the “Wall Street Journal”, where a subscription, including home delivery of the printed version and access to the web content, mobile and tablet apps, will cost you more than 270€ annually (Wall Street Journal).
Sweden-based start-up Readly discovered the opportunity to bundle customer value in 2013 and is now offering a monthly subscription at a flat fee of €9,99 with access to more than 4.000 titles. And customer seem to appreciate the platform business model approach, as “the app’s revenue grew by 54% just last year – from €12 million to €19 million” (Loritz, 2019) In terms of cost structure, Readly is paying out up to 50% of subscription fees to publishers, depending on the time consumers spent reading their magazines. Additionally, Readly attracts publishers to the platform by sharing user behaviour data, to let publishers obtain additional earnings from ads. With total revenue growth of 723%, the Financial Times ranked Readly among “Europe’s Top 200 fastest growing start-ups” (Smith, 2019). While the global magazine industry accounts for a €70 million market volume, only 6,5% is consumed digitally (Loritz, 2019). Despite Readly’s considerable success and the large bundle offered, the start-up is now challenged by Apple.
With personalised suggestions featuring a human-curated news enhanced by live pictures, Apple is aiming to innovate mobile reading experience with Apple News +. This initiative is building on the Apple News app, introduced in 2015 which included mostly add-driven content, focusing on the daily news. Since March 2019, U.S. customers with IOS and OS operating systems have access to more than 300 titles at a flat fee of $9,99 (Goode, 2019). In contrast to Readly, Apple emphasises user data privacy, cutting ad revenue of publishers to a bare minimum.
While Apple is expanding its service environment, it is also threatening the publishing industry. Media conglomerates that offer their portfolio on Apple News +, risk cannibalization of their current subscriber base. Nevertheless, it is also an opportunity to attain new customer segments in a digital environment and gain an edge over competing magazines (Lee, 2019).
How do you consume the news? Would you rather subscribe to Readly or Apple New+, or do you prefer to get off the screen for once and read a printed magazine?
Goode, L. (2019) Apple Launches Apple News+ Paid Subscription Service. Wired. Retrieved from: https://www.wired.com/story/apple-launches-apple-news-plus-news-subscription-service/
Lee, Edmund (2019) Media Companies Take a Big Gamble on Apple. New York Times. https://www.nytimes.com/2019/04/02/business/media/media-companies-take-a-big-gamble-on-apple.html
Loritz, M. (2019) The digital transformation of the magazine industry: Interview with Readly CEO Maria Hedengren. EU-Startups. Retrieved from : https://www.eu-startups.com/2019/07/the-digital-transformation-of-the-magazine-industry-interview-with-readly-ceo-maria-hedengren/
Smith, I. (2019) The FT 1000: third annual list of Europe’s fastest-growing companies. Financial Times. Retrieved from: https://www.ft.com/content/238174d2-3139-11e9-8744-e7016697f225
Wall Street Journal https://store.wsj.com/shop/US/US/wsjusafm0519/?inttrackingCode=aaqul1tm&icid=WSJ_ON_PHP_ACQ_NA&n2IKsaD9=n2IKsaD9&Pg9aWOPT=Pg9aWOPT&Cp5dKJWb=Cp5dKJWb&APCc9OU1=APCc9OU1
