Wednesday, April 4, 2012

Next Issue launches new Android newsstand that offers pay-as-you-go subscription model

Once a year I write a post about Next Issue – I guess today is the day I write the 2012 post. You see, back in 2009, technically before this site publicly launched, I wrote about the formation of Next Issue.

Formed by Condé Nast, Hearst, Meredith, News Corporation and Time Inc., Next Issue said they wanted to "develop open standards for a new digital storefront and related technology that will allow consumers to enjoy their favorite media content on portable digital devices."

Six months later I wrote about Next Issue finally getting around to hiring a CEO. One year after that I wrote about the launch of its digital newsstand – one that worked only on the Samsung Galaxy Tab.

Today, right on cue, Next Issue is back, this time with a digital newsstand that will work on Android tablets running Honeycomb and Ice Cream Sandwich, though it can't seem to list those tablets by name.

The new Next Issue app can be found inside Google Play here, but not inside the Amazon app store, nor, of course, inside the Apple App Store – which means the app will appeal to media writers but not actual readers.

Ken Doctor, writing on Nieman Journalism Lab calls the new Next Issue app "a model-changing product for publishers."

While I agree that a Pandora for magazine approach has some much merit, I strongly disagree with the whole concept of Next Issue.

First, the approach has been all about maintaining the near monopoly the large publishers have over the industry. With the demise of the physical newsstand, the big players feel seriously threatened by an open digital publishing model.

Meanwhile, the media consultants have been advising their old media clients to stay away from Apple, and even that the iPad is worthless and should be returned. Search for "Digital First", for instance, and you will not find any apps under that name, and the apps found under the other names formerly used by the publishers will reveal only stale, poorly designed replica editions.

In other words, if you want leadership in the area of digital look elsewhere other than the old line companies and their so-called new media consultants.

If I sound bitter, it is because I am. While the newspaper and magazine industries have declined, their thought leaders have driven their clients on with a whip, urging them to double down on their mistakes.

So now, two years plus one day after the release of the iPad, we get another attempt at a digital newsstand outside of the App Store, with promises that soon a Next Issue app will be available for the iPad.

Will it? Will there be an iPad app? Yes, you're damn straight they'll be. Anyone, other than a media executive or media consultant, would have told you that two years ago - and did.

So why this new app, and this new model? Because the old line companies lost. They lost their bet against the iPad, and they lost their bet against the Newsstand with its shared revenue model. So the pay-as-you-go model had to be created if only to have something to sell outside of the Newsstand. In the meantime, each of the Next Issue players have launched iPad app editions, but most have fought tooth and nail to not play the game the way Apple wants them to.

Ken Doctor quotes Next Issue's CEO Morgan Guenther as saying that "most of their digital subscribers are new, non-print ones." Sorry, but this may be true of the companies involved in Next Issue, but is this true for all publishers?

The reason these old publishers may be finding that they are reaching new customers but not their old ones is that these publishers have made the decision to not offer free access to the app editions to their existing print subscribers. Everyone has to pay, so print readers are refusing to pay twice. The result is that majority of digital readers are new – gee, what a shock. In the meantime, print subscribers who own iPads are screaming bloody murder inside the App Store.

As for the pay-as-you-go model, it has merit, but if Next Issue's app gets approved by Apple these publishers are going to be in serious trouble. You see, two (or more) can play this game. If the publishers behind Next Issue want to rent out their magazines how will they feel if Apple, Google and Amazon decide to play this game, as well. Why not allow a subscription model inside Newsstand?

Would you rather pay $9.99 to access 32 magazines inside Next Issue's app, or 2,207 (as of today) publications inside Newsstand?

If giving away the web was bad business for publishers, what will renting out the tablet do for them. Worse, in the current subscription model, publishers can increase and decrease their cover prices, but Next Issue, or whoever owns the rental platform, sets the price.

Will the rental model be successful? You can count on it, watch for a new press release soon.

The reason is that the publishers inside Next Issue have rigged the game. You see if you want to read Time on your iPad you'll have to pay $4.99 per issue. $9.99 for all the Next Issue titles is bargain, isn't it? You begin to see why these publishers insisted on high prices inside the App Store, and why they've lived with all the negative comments from print readers.

Doctor's post on Nieman is really a call to the newspaper trade to get going in new directions and to adopt new models in order to compete and thrive on the new digital platforms. But I guess, after over two years, it is hard to get very excited about anything Next Issue does. It seems to be living in its own universe, and that shouldn't surprise anyone.

In 2009 I asked "will other publishers be allowed to use the "store" or will it be the sole possession of the consortium members?"

Over two years later it is clear that Next Issue is all about the limited partners.

In fact, in that original post I said that Next Issue would find that, if they opened up their store front, they'd probably find that there was more money to be made as the gatekeeper than there is being the publisher. Two year later what is the most valuable company in the world? And how have the past two years been for publishers?