Saying that David Hepworth is a man with a bit of a track record in publishing is a bit like calling Einstein something of an egghead. He played a major role in re-inventing publishing in the 80s and 90s and today is behind an excellent niche magazine company. So when he talks the industry listens. And today he has been mulling over iPad magazines.
We have now reached a fascinating point in the genesis of iPad mags. The innovators who have swallowed the ‘this is the future of magazines’ mantra wholesale (like Conde Nast) are already out the blocks. And now companies with print titles in the tech space, like Future Publishing (LSE: FUTR) and Haymarket, are readying their iPad versions of existing titles.
So with Apple (NSDQ: AAPL) expected to have sold five million iPads by the end of the year and Android tablets likely to be one of the big tech stories of 2011 publishers can smell a critical mass.
The big question, and one that is perplexing David Hepworth, is: do you invest in an iPad mag now or wait and see what happens? Or as he puts it…
“If you listen to the futurists you have no choice. If you’re adventurous you go for one of those all bells and whistles remakes such as Wired.”
He then adds…
“Problem is, things like this are insanely expensive to produce, aimed at a user base which is a fraction of the magazine’s universe and by the time it’s proven (or not) as a medium the publishers will be thousands of pounds in the hole. The only people guaranteed to make money are the developers. The only people to make money out of the Gold Rush were the people who sold the shovels. It’s an old joke but it still holds good.”
He may be looking at a different set of figures to me but I am not sure that iPad mags are insanely expensive to produce any more. Surely if you have the content in the mag, you only need to add a little video and few clever graphics (which shouldn’t break anyone’s bank) pay the developer and then you are off.
The price of producing iPad mags is falling so quickly that very soon a whole slew of indie publishers will have iPad mags ready to roll and once again the mainstream publishers will have missed the boat.
The nightmare scenario for publishers with big media brands is if a new wave of indie publishers emerges who offer their iPad magazines for free. Dennis Publishing already offers its iGizmo iPad magazine for nothing (and it has been very successful), which makes it less likely that mainstream publishers will be able to charge £4-£5 for users to download them.
We are almost a tipping point, too. Glam Media, which monetises blogs, already have a division for monetising iPad magazine content. They may even offer a complete service and repurpose the most popular blogs as magazines. Glam gets a load more ad inventory which they can then sell as a network offering brands huge reach on the format. It will not only work but will also mean that the rates that existing publishers are charging for their iPad mags will be squeezed too.
Indie publishers have another big advantage too. They don’t have the massive overheads (or shareholder expectations) of mainstream publishers. They will be able to produce this content cheaply.
Hepworth also points out…
“I don’t feel in my water that people will inevitably use their iPads to read complete magazines on. At the moment they’re using magazines to try out their iPads with, which is not the same thing at all.”
I do think he has a point and that there is a novelty value at the moment which is obviously spurring the early adopters on, but that hasn’t stopped huge sales of books on the iPad and the Kindle.
I don’t think people will be paying for iPad magazines in two years time, so, like the web, ad revenue will become crucial. That means magazine publishers have a shortish window of time to establish themselves as iPad magazine brands.
If I were David Hepworth, looking at rising paper costs, dwindling print sales and websites that are tricky to monetise, I’d be all over the iPad.
This article was reproduced from Ashley’s blog with permission.
This article originally appeared in CEO, Sutro Digital.