Publishers Split Over Revenue Models

by Erik Sass , January 6, 2011

E-Book-Person

Practically every major publisher is rushing to get their publications on the iPad (and a seemingly endless array of other handheld devices) -- but not everyone agrees on exactly how they are going to make money from digital distribution.

At least that's what a new survey from Harrison Group and Zinio suggests. The research outfit and digital magazine producer also found that publishers don't necessarily see eye-to-eye with consumers about the ways content should be distributed and monetized.

There's no question that publishers view digital publications as the wave of the future. The survey of 476 publishing industry professionals found that 74% were already engaged in creating and distributing digital versions of their publications, with slightly less than half -- 43% -- maintaining separate print and digital operations.

By 2020, large majorities of respondents said they expect digital editions to become more widely used than print products for newspapers (82%), magazines (74%) and books (62%). Interestingly, 67% did not believe that digital editions will differ significantly from the print originals -- a point of view that seems to overlook or dismiss the enormous potential of additional interactive features.

On the consumer front, publishers differed from their customers on critical issues including protection of intellectual property, re-publication, distribution and content management.

A separate, parallel survey of consumers found that they placed the highest priority on being able to freely share content; they also expect to be able to view (and share) digital publications across multiple devices, including smartphones, tablets, e-readers, and the like.

Harrison and Zinio noted that these consumer attitudes -- which would naturally tend to undermine simple subscription models -- point to a major perception gap between how publishers and consumers view the future of the business. Whereas 74% of publishers believe subscriptions are still the way to go with digital products, just 13% of consumers agreed; the other 87% of consumers were split among several options, including unlimited access at a set price (33%), single-copy sales (25%), micropayments for individual items and articles (16%), and prepaid credit plans (14%).

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2 comments about "Publishers Split Over Revenue Models ".

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Peter Brevett from HFM U.S., January 7, 2011 at 12:44 p.m.
A major issue for consumers is the lack of a combination print/digital subscription price. Publishers and handheld manufacturers have not seemed to work out this stumbling block. If a consumer already has print subscription to magazine, why would they want to pay price for a digital subscription, also, unless it is discounted? Is electronic portability and convenience worth paying what is sometimes double the subscription price to have access to both print and electronic subscriptions?
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Darren Davis from Artisan News Service, January 10, 2011 at 5:10 p.m.

There is no need to pay for content anymore. People will gravitate to free but ad supported content over pay -- in part because of the stigma of giving over personal information over the net, which many still view as insecure and not as private as first thought. Ad supported content still pre-supposes users are anonymous. For iPad, consumers will eventually choose web browsing and bookmarks of a free site over a digital subscription of a magazine. The only solution is for Magazines to stop putting free content out alltogether and concentrate on their bread and butter, which is hard-copy magazines. I still love a paper Rolling Stone in my hand -- not on the screen.