Pundits have long called for transformation of news media that will bring new business models better fitted for the digital age. It is still common that publishers offer separate subscriptions for online and offline channels or expensive bundles for mobile access. Efforts to breath new life into the publishing business came not only from publishers and media companies but also technology companies such as Apple, Google, Microsoft. Apple’s Newsstand app, which was introduced in 2011 as a hallmark feature of iOS 5, allowed publishers to recreate and publish their magazines on the iOS platform. Magazines published in the Newsstand app behaved differently from regular apps and had more rights that ought to make them more attractive for publishers and subscribers. Apple provided the tools for publishers to offer free and paid subscriptions and the possibility to push new content to subscribers. Similar solutions were also created by companies such as Samsung and Google. Large and small publishers saw this as an opportunity to reach new customers, with news/magazine apps that stood out from other apps.
Marco Arment, one of the first employees at Tumblr and creator of Instapaper, took on the challenge to create a magazine native to the digital age and perfectly suited for the capabilities of mobile devices. the result was The Magazine.
Introduced, in 2012, the Magazine was a Newsstand app that released weekly issues. Because there are many freelance writers who produce content for their own websites, Marco figured he could attract those writers to produce content for The Magazine. For writers it was attractive to write for The Magazine, since the company allowed all contributors to retain ownership of their content and let them publish it on their own sites two months after it was published in The Magazine. Marco believed that the new tools created a new category for magazines such as The Magazine:
But just as the App Store has given software developers a great new option for accepting direct payment, Newsstand has given publishers an even bigger opportunity with subscription billing and prominent placement. Yet most publishers aren’t experimenting with radical changes.
There’s room for another category between individuals and major publishers, and that’s where The Magazine sits. It’s a multi-author, truly modern digital magazine that can appeal to an audience bigger than a niche but smaller than the readership of The New York Times. This is what a modern magazine can be, not a 300 MB stack of static page images laid out manually by 100 people.
On the money side, The Magazine relied on paid subscriptions from readers and individual issue sales. This revenue was used to pay writers (the subsidy side),editing, illustration, proofreading, design, and programming for each issue.
Although The Magazine was fairly popular and highly profitable according to the owners, the company recently announced that it is shutting down.
Why did it fail?
Apple’s Newsstand is also partially to blame. Because all apps created for the Newsstand are locked into the Newsstand app, they are no longer visible on the homescreen. And because the average mobile device already has dozens of apps fighting for attention, out of sight means out of mind for apps locked in folders. Furthermore, these apps also often faced download issues, causing frustration for subscribers. But unfortunately, the main reason for shutting down is the lack of subscribers. The Magazine did not have a high enough retention rate and was losing subscribers faster than it was gaining them.
What are the possibilities?
The Magazine has shown that it is possible apply a new business model for news media. However, just applying the newest technologies and building a high-quality app was not enough. Publishers already have the writers, they need to find a way to gain and retain as much subscribers as possible.
Do you think large publishing houses should take example?