Magazines: Are Hopes for Tablets Overdone?

Magazine publishers’ two main revenue sources remain in print –sales and advertising– and both fell again in 2011. Circulation revenues were lower, as were the number of print ad pages sold.  The weak economy and the shift to digital share the blame.  So far, most magazines are not capturing enough of the growth in digital to make up for what is disappearing from print. The industry’s digital revenues, while fast growing, are just 5% of the total, lower than in newspapers.. There are exceptions, though, which may point the way for others. Four years after launching an aggressive strategy to prioritize digital, The Atlantic announced that it earned more from digital advertising than print ads in the month of October.

Readers, meanwhile, are migrating fast to digital and mobile, a move that accelerated in 2011 with the explosion of tablets and smartphone ownership. Thanks in part to the popularity of apps such as the Apple Newsstand,Google playstore etc  which make it easy to find and download magazines and other publications, that acceleration is likely to continue.

The shift is bringing new opportunities for magazine publishers, along with an array of new financial and technical challenges.

The good news for magazine publishers is that the newest mobile devices, particularly tablets, may provide a particularly good environment for magazines. Research shows that people read more long-form content on the new devices and that they spend more time on magazine apps specifically than with those of other media.

The bad news for magazine publishers is that the number of platforms they must compete on is proliferating.  Keeping up with the rapidly growing array of new technologies that consumers are adopting will require large investments, even as revenues show little or no growth.  While many magazine publishers believe tablet ads will eventually prove a lucrative replacement for print ads, it is far from clear when that will occur.  In the meantime, publishers are increasingly leveraging the power of their well-known brands into other arenas – events, e-commerce and even entertainment – in the effort to find the new revenues needed to ensure a strong future.

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