What’s next for magazines?

It’s no secret that the growth of the online content market constricted the traditional newsprint and magazine publishing industries in both subscription numbers and overall revenue. Though the most dramatic decline in revenue was largely confined to the years of 2008 and 2009, it has been widely reported that the days of the traditional magazine are numbered. However, the content creation and management skills of the publishing industry have been cultivated over decades and its staying power should not be underestimated. Unlike the traditional newsprint sector, which struggled to define their differentiating factors in an Internet-based 24-hour news cycle, magazines have long relied on their special relationships with readers and their ability to provide unique content that sets them apart from their competitors. The titles that didn’t (namely the newsweeklies) were some of the first to fold in the wake of the rise of Internet news.

Those which have survived have been forced to fight a continuous battle for relevancy in order to attempt to maintain circulation numbers. As recent data shows some troubling indicators for the future, it’s clear that the magazine industry won’t have an easy road. Decreasing newsstand sales are one of the most troubling signs of what’s to come. If impulse purchasing is commonly thought to be a signifier that the general public can still be enticed by the unique content touted on print covers, it seems their appetite is waning. For most titles, newsstand sales represent only about 7 percent of total revenue, so the alarming declines don’t signify the end of magazines. However, they could be a harbinger of doom.

In an effort to keep magazines top-of-mind and accessible to all, consumer titles have experimented with digital formats over the past 10 years. In nearly every case, converting the glossy pages of traditional publications to an interactive, convenient and competitive version has been an expensive and complicated challenge. The endeavor is also nearly impossible to replicate consistently over the course of a traditional publishing schedule. It is generally understood that magazines’ strongest asset is their ability to capture attention and connection in a manner not replicated by any other medium. Unfortunately, the industry has not been able to replicate that attention on a digital platform, nor have they determined how to fully monetize engagement levels in the face of ever-cheapening CPMs (cost per thousand) on large-scale digital platforms.

There’s no doubt that the magazine business model doesn’t work in a modern, online world where competition for 24/7 eyeballs increases daily. Up to this point, struggling magazine brands have attempted their forays into the digital platform on an individual basis in order to extend the life of their content services with dubious results. Digital subscriptions for major titles have held at about 30 percent of all magazine subscriptions and no data thus far indicates major increases on the horizon. Now, the latest publishing attempt to evolve the magazine landscape in a digital world is here, and it’s called Texture.

The new Texture digital magazine app was launched several years ago as “Next Issue,” a joint project funded by magazine greats Conde Nast, Time Inc., Hearst Magazines, Meredith and News Corp. More recently joined by Rogers Communications in Canada, and boasting $50 million in a fourth quarter 2015 venture capitalist infusion, the leaders of the magazine world hope to join forces in an attempt to maintain relevancy and stop the circulation bloodbath.  

The Texture app is essentially built on the Netflix, “all-you-can-eat in one monthly subscription” concept and offers 145 titles for a $14.95 monthly fee. A basic monthly subscription of $9.99 removes “premium” titles like Sports Illustrated, Us Weekly and People, but still offers 95 percent of the platform’s available titles. New features support article and topic curation across titles, allowing users to create personalized content lists or simply read their favorite titles from beginning to end. After operating costs, the publisher partners share revenue based on a usage model. Articles read are attributed to each publisher and subscription revenue is split accordingly. If no one reads a title, the publisher receives no revenue share. Competition is slim in this “all-you-can-read” category; the only other major app offering this service is Magzter, which has a larger library but fewer premium titles and more of an international focus than Texture.

Readership and audience

Publishers aren’t yet sure whether this app will inadvertently drive down the quality of their titles’ readerships. If Texture achieves scale, touts abundant readership data collected within the app and attracts new readers to existing quality content, they will have succeeded and this deal with the devil will be worth it. No amount of quality audience erosion will hold them back, and it’s unlikely that quality audiences would disappear anyway, since magazine fans will consume their favorites no matter the format. What’s more, fears over this business structure have been raised before with Netflix itself, and thus far, there have been no complaints from the networks as they cash the retransmission rights checks they enjoy as a direct result of Netflix’s scale. But make no mistake, scale is essential. If Conde Nast, Time, Hearst, Meredith and News Corp can’t figure out how to attract more subscribers, the failed effort will be a sign of the decline of magazine publishing as a whole, not just another failed attempt at conversion to a digital platform.

But as with many previous forays into experimental digital competition, the publishing industry has dabbled with the Next Issue or “Texture” app but never fully committed. Their commitment fears have been primarily focused on a fear of cannibalizing their print publication audience while “cheapening” the audiences they attract through a less expensive version of their premium content. But truth be told, potentially cheapening their brands has never bothered them before. Remember the ‘90s and early 2000s when cheap circulation tricks included $1 annual subscriptions at the check-out counter of Best Buy? Many would argue that falling circulation calls for radical measures and an occasional reader of a digital app is better than a rare reader of a print copy; especially when the former gave up their email address and the rare reader sailed by the title in an airport while maintaining complete anonymity.

However, if it’s such a great idea, why has the app only sold a couple hundred thousand subscriptions over the last few years? Well, if no one has heard of the app, no one will subscribe. The recent cash infusion was highly publicized, but $50 million won’t go far if it’s devoted in part to the technology platform upgrades. Scale needs to be achieved quickly, and it’s hoped that new TV ads will boost Texture’s profile the way Netflix boosted theirs to become a household name.

User experience

There’s no question that small phone screens are a huge problem when it comes to readability, but magazines had a whole device designed for them: tablets. With that in mind, it seems like magazines had the advantage in the digital technology sector. But it’s also true that entertainment time is increasingly spent on mobile phones. That said, it could be argued that magazines were never an “on-the-go” medium. It was always their ability to capture and hold the attention of their devoted readers that made them so valuable. Why can’t iPads or laptop screens at home be devoted to magazines? Why must the beauty and engagement of magazines be removed simply so readers can access them in two-minute bites throughout the day? Destroy the engagement, and everything the magazine industry stands for is destroyed.

With this in mind, refining the digital experience on Texture is vital. Even after the re-structuring and feature updates Texture completed over the last year, usability could be improved. The curation capabilities are sometimes clunky and the magazines lack the depth of links, video and online flexibility that traditional websites offer. However, for the traditional magazine lover, the features that have been added do not detract from the reader experience and feature improvements that will likely bring in new readers.

Monetization

If successful, will Texture create an even greater monopoly within the top magazine publishing groups? Yes it will, but potentially only in the short term. The future success of the industry relies on scale and publishers need to band together to ensure a solid platform. Unlike the television networks’ experiment with Hulu, texture will maintain the individual identities of magazine titles. After all, each magazine brand has been carefully built to identify with specific audiences. Hard core followers of specific titles will continue to read them cover to cover and new readers have the opportunity to find brands they love by searching for specific content. Though Texture is owned by the major publishing houses, their recent infusion of capital came from an outside source, which will help them maintain a growth trajectory even if their vision is insular. Consumer demand for niche publications produced outside the confines of the monopoly will be addressed by a profit-minded third party.

In terms of affecting advertisers, Texture simply contributes additional eyeballs to the print platform. The increased measurement capabilities of the digitally-scanned versions might be a boon to the reach of magazine advertising. Though one drawback could be spread advertising. Since Texture focuses its reading app on a single page view, multiple-page spreads do not have the same effect that they do in print versions. However, the biggest gain for advertisers could be the reach opportunities. Instead of confining ads to a single magazine, future opportunities could include sponsorship of whole segments of readers by genre. Running in-app ads reaching Texture readers on their homepage or within a grouping of male-targeted, parenting or women’s service publications offers advertisers opportunities beyond the scanned page.