Aren’t Push-Button Magazines Long Overdue?

Peggy O'Connor in the newsstand glory days. © Time Inc.

Thomas Paine reached 100,000 American colonists with his Common Sense, a number that would today mean 20,000,000 in terms of population reach. And it never would have existed without a print shop and movable type. A failed corset-maker like T. Paine certainly wouldn’t have had the means (and probably not the will) to reproduce them all by hand.

Print technology keeps getting better as it evolves, and by better I mean easier for more people to read more things. The tract lived on through ‘zines for a few centuries and now seems to have mostly transmuted into the insta-published blog. Books — that walled City of Troy of publishing — stayed exclusive for a while but digital printing battered through the gate and e-books plum brought down the wall. But wither the magazine? A young politico can post her treatises for the entire world to find (should they choose to look). A novelist can do the same, and largely within the same format he would have 20 years ago. But today’s crusading magazine moguls don’t seem to have anywhere to turn for help overcoming the obstacles.

And those obstacles are many.

The cheapest way for a new magazine to launch is web-only; a well-designed site can mostly mimic the sections of a print magazine (and therefore its reading pleasure), printing costs are zero, distribution costs stop at your hosting fees. But is it easier to sustain after launch? Building an audience for a web magazine isn’t easy; it takes daily hours trying to catch attention amid the internet noise, then holding that attention once you get a click. And once you’ve succeeded at that Herculean feat you get to the fun part: trying to part your new readers from their money so you can pay your contributing staff.

Tablet editions present a cocktail of challenges, combining the high start-up costs of print (developer fees, digital distribution commissions) with the audience-building challenges of web editions.

Print remains the winning business model for magazines; though the initial costs are staggeringly scary, the follow-up benefits are pretty sweet. National newsstand distribution turns a magazine into self-advertising in thousands of locations where people are pre-disposed to buying something to read, meaning millions of “good” consumer impressions. A newsstand browser knows that the magazine will cost something, unlike the internet browser who expects that it won’t, and they are thus already weighing the pros and cons of buying one while it’s in their hands. If a magazine is well-curated, competitively priced, and specifically targeted, a reader will be sold within seconds of flipping through it. And that flipping-through is another fantastic benefit: print magazines can be 100% previewed unlike the pay-walled articles on a web-magazine. Probably the most beneficial benefit is the subscription offers bound-in to newsstand copies. No one subscribes off-the-bat (as we often ask our web-magazine audience to do) but they will take a chance on a single copy, intending to subscribe if they like it. A three- or four-percent return on print subscription offers can dramatically boost circulation, shortening the path to making ends meet with the next issue. As someone who has made more magazine P&Ls than I care to count, the newsstand/subs/digital combo always leads to the most revenue in the long-term while digital-only loses or just breaks even.

So, with all of that long-winded, overly simplified, surface-skimming business analysis out of the way, on to the point at last: what to do about those terrifying start-up costs? How many modern Henry Luces have a spare few hundred grand to start up the creaky newsstand distribution machine, not to mention the spare 20 hours each week to maintain it? HP’s MagCloud service beckons temptingly with an alternative: print-on-demand magazines, built-in order fulfillment for single copies and subs, no returned copies or distributor costs. And then you get socked with the bill.

The cost for an 80-page saddle-stitched magazine through MagCloud (roughly similar to a copy of Us Weekly or Businessweek) delivered to a reader is $18.48, with $16 of that tied up in printing. A similar job at an offset printer, at a print run in the neighborhood of 10,000 copies, would be a buck per unit. The $15 difference is apparently what it’s worth to you, as a publisher, to forego the risk of up-front investment in a returnable business. You don’t need me to tell you that that’s patently absurd. No Henry Luce worthy of the comparison would ever consider abusing the customer this way.

This looks even sillier when compared to the ease that book publishing entrepreneurs enjoy. To take Amazon’s CreateSpace for just one example (I think there’s at least a half-dozen other legitimate self-publishing aids today), a 200-page book retailing for $7.99 gets you $1.50 profit per-copy as the publisher, with Amazon taking $6.50 for printing and fulfillment (not to mention placement on Amazon, one of the world’s largest book retailers). Everyone in the supply chain wins in this scenario and it’s only one of many potential scenarios; CreateSpace pays royalties rather than charging for a service, which allows publishers to play with pricing and trim size to get the best balance of cover price and profit.

To put it another way, if a start-up publisher with limited capital wants to publish a novel at a fair market price and try to compete, they can do so within five minutes. If a start-up magazine publisher in similar constraints wants to do the same, well, they can’t.

MagCloud starts in a great place. It recognizes the need for print magazines. It probably meets a need for highly specialized magazines with pre-existing audiences. But HP doesn’t use its fantastically advanced print technology to further the art or industry. Today’s publishers are actually better off paying someone to set movable type like Thomas Paine did 250 years ago.

The burden isn’t on HP to further art and industry, of course. The burden is on other enterprising companies to step in and meet this growing need. I wonder who it will be. More importantly, I wonder how long it will take them to show up.

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