Newsweek has a print customer base of about 1.5 million and has decided to go all digital. Should you close your bricks business and go all digital? No, and here is why from the magazine business that should apply to other brick/click combo businesses:
- Bricks will always be there: So long as human beings have physical bodies and senses of touch taste, smell etc. the bricks world will have a market. It does feel nice to read a Newsweek or Time at the dentist's waiting room. And when you get that 80-90% off offer for the print magazine you do tend to sign up. Time magazine has 3.3 million subscribers while Newsweek has about 1.5 million subscribers.
- Getting online paid subscribers is hard: According to Felix Salmon of Reuters , Huffington Post tried the paid subscriber model for just five issues before going free. There are almost no chances of picking up the 1.5 million subscribers that Newsweek print would have to convert to digital only.
- Thinking Brick costs is a fallacy: Newsweek Editor Tina Brown says that it costs $43 million to produce the print magazine including the paper, printing and distribution, before hiring a single writer. Going by this logic almost every venture that serves large numbers of people spend more around the supporting infrastructure. Thus every major university and hospital spends far more on the campus, equipment, managers, support staff than the faculty and doctors.
- What business are you in - the US News case: What business are you in, is the question to ask. US News went all digital since 2010 and have an iPad subscription version at 99 cents that has very few takers - comparatively speaking. However, rankings in various categories like colleges etc. provide US News with a huge following. There are 50,000 subscribers for the college rankings detailed information at $29.00. There are 10 web clicks for rankings against two web clicks for news and note that both produce no revenue for US News. In other words, US News appears to be more in the rankings business than the news business.
One must wonder if Newsweek actually asked its print subscribers why they really subscribed to the print magazine, for when you have a customer base in the brick world you have an ongoing relationship in the CRM sense. Asking customers to change to digital en masse also raises the question of the technology adoption ability of the entire customer base.
To summarize,if you have existing "bricks" customers make sure that they will be able and willing to pay for your product digitally before you go entirely digital. Contact StratoServe.