Posted by: Matt Shanahan
The publisher’s challenge of preserving at least the profit per reader in the changing media landscape is daunting, so it is interesting to watch particular strategies. Take People Magazine as an example.
People Magazine in 2009 had a $408 Revenue Per Reader in their print business. It came from nearly $1B in ad sales, $284M in one-time sales, and $235M in subscriptions with an average weekly distribution of 3.6M readers.
This week, People Magazine announced that it print subscribers will receive bundled access to their digital edition on iPads. The bundling of their print and digital offerings will assist in migrating $1.48B revenue stream from one channel to another one. People Magazine made what looks like a smart move for several reasons.
First, by bundling the offerings, they can create loyalty with their existing subscribers by giving them new value in the form of digital access. Increase loyalty reduces churn and preserves the revenue stream.
Second, by bundling the offerings, they can encourage buyers of the more expensive single copy digital version to purchase the print edition and get the iPad version for free. Essentially, they increase circulation by using the digital single copy as a marketing promotion. The move helps bolster the existing ad revenue in print which remains the most lucrative.
Third, by bundling the offerings, they can migrate their audience to a 100% digital channel when the engagement metrics reach the right level and the ad units produce the right revenue. Will it ultimately be a $408 RPV? Who knows but bundling seems like a good approach to migrating their audience and revenue.
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