An online consortium of publishers are party to Next Issue Media, which makes 145 digital versions of magazines available to subscribers in exchange for a monthly fee. It has just gotten a shot in the arm.
According to Eric Katz of Wells Fargo Securities, investment firm KKR is providing the equity boost.
The investment amounts to $50M,
NIM uses a Netflix model, according to Katz – it allow subscribers to access current and past issues of the collection of magazines, and has other features as well, all for $9.99 a month.
Its members include Conde Nast, Hearst, Meredith, NWSA, and Rogers Communications.
The magazines are compensated on the basis of time spent with their magazines.
A particular beneficiary of the service is Time, thanks to its cornerstone attraction People – Katz said Time picks up $5 every time a subscriber auto-renews that title.
Summing up the Wells Fargo take on NIM, Katz said, “While we aren’t quite sure if the digital subs will meaningfully cannibalize print subs in the near-term, we do think this could provide a nice incremental, high margin revenue stream from millennials (as well as older generations) who don’t have print subscriptions but would prefer the ”all-you-can-eat” digital model that has become so mainstream (i.e. NFLX, Spotify, etc.). Importantly, this digital model carries much lower costs for the magazines companies, particularly related to print and delivery costs.”
RBR-TVBR observation: As a member of an older demo, I confess that there are times when I want to have an actual book, magazine or newspaper in my hands, not some battery-draining handheld device, or a desktop device that chains me to one physical location.
On the other hand, I am perfectly aware that my two teenaged not-really-children-any-mores are perfectly content to satisfy their media needs electronically.
And furthermore, I work for a publication that at one time was printed on paper once a week and sent to people in a paper envelope with a glue-backed piece of paper paying the freight charge. It is a publication that exists entirely online today, with the exception of the occasional print version tied to special occasions.
My take on all this is that NIM may or may not work – but if it doesn’t, these publishers had better have other digital tricks up their sleeve because the future for glossy paper-based products is dicey at best.
