The Business of Magazine Apps: Why Circulation is King

Many articles have been written on The Daily’s failure and why publishers have gotten magazine apps all wrong. These articles have a list of reasons, mainly technical, on what’s wrong with magazine apps and how to improve them.

However, they all ignore the reason why the majority of publishers continue to produce flat digital replicas of their print counterpart instead of a rich interactive experience that most consumers expect. The reason is circulation.

Understanding why brands of all sizes continue to struggle in releasing a successful magazine app that delivers on the consumer experience, and as a new revenue generator, requires taking a closer look at the business of magazines. As with any business, it comes down to money.

Magazines make some money from their subscription fees, but the bulk of their revenue comes from advertising. Higher circulation means more people paying the subscription fee, but more importantly it allows the magazine to charge advertisers higher rates.

The print industry has been on the decline due to competing forces such as websites and aggregators that provide much of the same content for free and in real-time; as a result circulation is down for most magazines. In response to this decline the Alliance for Audited Media, which is the North American organization that provides authenticated circulation figures from print publishers, ruled that magazines could count digital-edition sales towards their circulation total—a game changer. Immediately, publishers became interested in the business of magazine apps as a way to boost their declining circulation.

Consequently, publishers are evaluating their digital strategy to find a solution for their business and brand. Publishers want to take advantage of the digital-edition circulation increase, but releasing a quality app costs money. Circulation influences the amount a publisher can spend developing their magazine app.

The cost of a magazine app depends on the type of app. A flat PDF replica is simple and inexpensive to produce; it can easily be added to the end of the monthly print publishing pipeline because the content and layout are identical.

A PDF replica has no maintenance overhead and very few technical challenges besides file size. With PDF APIs standard on most tablet platforms, it can be viewed in any white-labeled PDF reader.

However, when a magazine decides it wants a more interactive experience that captures the nature of their brand, the costs quickly start to rise. There are technical challenges, like deciding what and how many platforms to target, and then targeting the correct resolutions, orientations and conforming to those platforms’ design guidelines and quality bars.

Therefore, creating an app for more than one platform can dramatically increase costs. Additionally, designing for an interactive medium is different than designing for a static one. Consumers expect apps to have interactive elements such as built in picture slideshows, videos that play in place, and social media integration; unlike other apps, the design of a magazine app constantly changes to showcase the monthly content (most magazine apps cycle through a few layout templates). All these requirements add additional steps to the publishing pipeline that are either filled in-house with extra resources or through external vendors—all which increase costs.

Many magazines are simply not in a position to create expensive interactive apps because they’re unable to allocate a large enough budget. The result is that magazines with weak circulation have no choice but to release a PDF replica so they can take advantage of the digital-edition circulation increase without making a significant financial investment. On the other hand, magazines with high circulation can afford to create a more immersive reading experience that keeps their customers engaged and strengthens their brand.

The Daily had the financial resources to create an engaging app and although circulation alone doesn’t fully explain why it failed, it does explain why it couldn’t right the ship before it sank.

The bottom line is that when it comes to magazines, circulation is king, and when it comes to magazine apps, circulation is still king.