Condé Nast Tries Turning the App Store Into a Newsstand: Will You Buy GQ for Your iPhone?
by Peter Kafka
Posted on October 20, 2009 at 12:26 PM PT
I’ve all but declared a moratorium on “Company X has an iPhone app” stories–memo to PR folk: There are now 85,000 apps–but this one is actually interesting: Condé Nast is turning the app into a digital magazine.
The publisher plans to start selling digital copies of its print titles via a yet-to-be-approved app. Condé will start with the December issue of GQ, which it will sell for $2.99 (versus a newsstand price of $4.99), but the idea is that the publisher can use the same technology to sell other issues of other magazines down the road.
Condé says the GQ digital issue will replicate the print one on a page-by-page basis, including the ads. Digital bonuses include related videos, as well as links to sites for products (clothing, music, etc.) featured in the issue.
I wasn’t able to attend Condé’s presentation this morning, so I can’t tell you how its attempt to transfer a rich glossy magazine onto a phone (or iPod touch) actually works. But for now, I’ll take the company’s word for it and assume that it’s a nice alternative to carrying around some dead trees.
The interesting question is the business model, which I think has some real potential. This doesn’t solve Condé’s core problem–its costs are too high to support its shrinking ad revenue–but it does have several things going for it.
For one, this approach reaches its potential readers where they are: I don’t want to read a magazine at my desk, and I’m far from sold on the idea of buying a specialized reader to consume it digitally. Getting it to me on my phone, which goes wherever I do, is the way to go.
It also generates some (potential) additional revenue for Condé Nast right off the bat without creating a channel conflict with its analog product line: Condé will be able to count any magazines sold via its app platform toward its audited circulation numbers, a trick that no publisher has been able to pull off with Web products so far. Meanwhile advertisers in the print publication who want to add digital links to the iPhone version will pay a premium, Condé says. And the publisher has been able to extract additional dollars from Grey Goose and Gillette, which will be “premium sponsors” of the GQ issue.
Bonus upside: Condé says the technology it has assembled for this effort should work well for future Apple (AAPL) products, like, say, its mythical tablet. “We think that the minute Apple is ready, if they ever are, to announce that they’re going forward with a tablet, that we’ll be ahead of everybody,” says Sarah Chubb, president of Condé Nast Digital.
This doesn’t solve the distribution issue that Condé and other publishers have with Apple, Amazon (AMZN) and other potential digital delivery outfits: Apple, not Condé, will control the billing relationship for the app. But then again, Condé doesn’t get to interact with you when you buy a magazine at a newsstand either, so at least it’s not getting disintermediated.
The question, as always, is whether customers are willing to pay anything at all for content they’ve been getting free on the Web. I still think we’re going to end up with a small segment of people willing to pay up for specialized stuff and a very large group that are going to end up with free things of dubious value. It would be great to be proved wrong, though.
Comments
I’d be wiling to do it if I can save FULL SIZE pages to my photo library or to email them as PDF’s. If they create a “locked” version, it’s pointless like some of the other iPhone apps with photos and text – locked in its format is USELESS. I also want interactive ads that are NOT generalized http://www.company.com home page. If the ad is for a trench coat, I want to go to that specific page with info on that coat. If all they are going to do is scanned the mag and add page turn effects, I can do that right now. It offers NO advantages of a regular mag.
Posted by joe belkin at October 20th, 2009 at 4:50 pmPretty sure you’re going to be disappointed, but I’ll get an in-person demo next week and report back.
Posted by Peter Kafka at October 21st, 2009 at 3:51 amThe newsstand approach seems to me less convenient (and less sticky, of course) than a subscription offer. Do you know if Conde Nast will do both?
Posted by Phoebe Spanier at October 21st, 2009 at 5:17 amAsked them the same thing, and they say they don’t know yet. Trying single issues for now, though they say that they have the technical ability to offer a subscription.
Posted by Peter Kafka at October 21st, 2009 at 6:13 am