Hearst Magazines Happy With iPad’s Digital Distribution Process

Apple’s Newsstand, which was introduced in October with the release of iOS 5 has proven to be a success for many magazines. According to Hearst Magazines president David Carey, Hearst is expecting to have one million digital subscribers by the end of 2012.
Tablet magazines are catching on with iPad owners, and other companies have reported similar successes. Condé Nast reported a 268% increase in subscriptions after Newsstand was released, and as a result, the publisher went digital with several more titles.
Hearst Magazines, the company behind titles like Cosmopolitan, Esquire, O, and Popular Mechanics, offers its publications for $19.99, or $3.99 to $4.99 an issue. The company currently has 400,000 subscribers that read its digital publications.
Unlike other publishers, Hearst charges for digital subscriptions even when a customer has a print subscription. Subscriptions are not all-inclusive. Competitor Time Inc (of Sports Illustrated and People fame) and Condé Nast both allow print subscribers to access digital versions of magazines.
According to Carey, the low $12 to $15 cost of a magazine subscription justifies the charge for other products. “We feel if people want the content in multiple formats they should pay for it,” he told Reuters in an interview. “At our price points we don’t feel compelled to offer another free product to the end user. We could always pivot back into it. We don’t want the word ‘free’ connected to content in this medium.”
Last spring, there was conflict between Apple and magazine publishers, as publishers demanded access to subscriber information and Apple demanded a 35 percent cut of revenue. Apple gives customers the option to share their personal data, and 60 percent have indeed opted in, a higher number than Hearst Magazines expected. As for Apple’s fee, it allows Hearst to keep 65 percent of revenue, whereas in print, publishers keep 55 cents for every dollar.
As it turns out, working with Apple wasn’t such a bad thing after all, and much of the drama was for naught. Digital media is on the rise, and it was wise of publishers to evolve and adopt new technologies. “It’s a pretty efficient distribution for us to be honest,” Carey conceded.
[via Reuters]