Tuesday, July 10, 2012

Next Issue Media launches its digital newsstand for the iPad; alliance between major publishers takes two years to launch a product that has a chance to attract readers

The digital alliance between major publishers Condé Nast, Hearst, Meredith, News Corporation and Time Inc. has often reminded me of those football follies, where the team fumbles the ball and camera follows along as the ball goes bouncing here and there and no one seems able to get their hands on the things. It may be funny to watch, but when you are in the middle of the scrum things seem pretty desperate.

In December of 2009, can you believe, I first wrote about the new alliance between the publishing giants. At that time I wondered if the new initiative was "more an attempt to head off any efforts by Apple or Google or Amazon to become the default marketplace for digital magazines."

Users of the Next Issue app must first go online to create an account.
The original press release mentioned "portable digital devices," making it clear that the publishers were quite aware of what Apple had in mind and were already plotting their own solution. Next Issue Media may be considered then as the end result of major publishers concerned that their industry would become the next segment effected by Apple (re: music).

Recounting the missteps taken by Next Issue Media makes clear that the company has done everything it can be work around Apple. It's first launch of a digital newsstand was exclusive to the Samsung Galaxy Tab. That effort began in May of 2011, a year and half after the announcement of the alliance – pretty fast by old media standards, disastrously slow by new media standards. And, really, the Galaxy Tab?

One year later, this April, an Android app was launched. That app appears to be suffering from the fragmentation of the Android platform with users complaining that the app is broken by Jelly Bean, the latest flavor of Android.

Now, finally, Next Issue Media has launched an iPad app. Simply called Next Issue, the app is like that from Zinio: a shell app that allows your access to your account, which you must create online, which then allows you to read your magazines through your tablet.

The whole mechanism is designed to bypass Apple's systems: you can not create an account through the app, you can not pay for anything through the app.

The point of differentiation for Next Issue is its pricing model: readers can subscribe to individual magazines through their service, buy individual issues, or buy one of two plans that offer a whole range of magazines – $9.99 per month for Unlimited Basic, or $14.99 for Unlimited Premium that includes Entertainment Weekly, People, Sports Illustrated, The New Yorker, TIME.

(Those who download the app get a one month free trial for signing up and entering their credit card information.)

Because of its subscription approach some have been calling Next Issue the Hulu for magazines solution.

That it has taken the new company this long to understand the basic publishing concept that one goes where the readers are shows that there have been other issues driving the direction of the business.

As for the app, I only encountered one problem: after I downloaded and installed the app I noticed that signing into my account did nothing. That was because I had not signed up for a plan. After I did so, the app did not update. I hit the refresh button many times but to no avail. Shutting down the app and rebooting finally did the trick. After that everything went smoothly.
The reading experience will completely depend on the approach taken by the publishers, but for the most part, the issues being produced by these major publishers are tailored for the iPad (though some have already complained about retina support).

Next Issue Media wants to attract other publishers from outside the alliance. But I'm sure many publishers will see Next Issue Media for what it is, another third party that will be taking its share of the revenue. The most obvious benefit for publishers is that they will get the customer contact information, something Apple is loath to share.

But the one price/unlimited access approach only works if the selection of magazines is huge. Compared to Zinio, Next Issue is the small corner kiosk. With only 39 magazines in the digital newsstand, the per month subscription price may seem high to many readers. But if new titles are added will the price have to go up, or will the publisher's share go down? You can see the business model problems here.

Meanwhile, the company has had since the start of 2010 to attract other media players to its side. This has to call into question whether a publishing alliance made up of such heavy hitters will ever be nimble enough to compete in this environment.

Now that Next Issue is in the App Store we might start to get some real answers. After all now the company is actually in the ballgame. (Beware, the predictable sports cliché end is approaching...) It's taken them a while to finally get a grip on the ball, even if they now find themselves with third and long.