Ideas for How to Monetize the Future of Magazines
“If you’re going to criticize, you should propose,” a wise man once said. Just kidding – it was Paul Ryan. But the sentiment is fair. I’ve been pretty critical of magazine publishers this week, so I now have some responsibility to offer constructive suggestions. I can’t pretend that I have all the answers, or that what I’m about to suggest isn’t at least in some part naive. But some discussion is better than no discussion.
What I’m about to suggest assumes that (until the next paradigm-shifting technology comes along) we will ultimately do the majority of our magazine reading on tablets and smartphones, and that publishers will throttle back the amount of free magazine content that is currently available on the Web.
Partner with Square Even if magazine content does eventually move to a Spotify-like platform with an all-you-can-eat subscription model, publishers should still figure out a way to do micropayments. It is essential that users can buy content on a per-article basis. To achieve that, publishers should be knocking down Jack Dorsey’s door. Dorsey’s Square already has an elegant payment platform that requires nothing more than a smartphone app hooked up to a bank account.
Using Pay With Square, publishers could replicate the proximity payment feature that Square offers for bricks-and-mortar retailers. That system, which is still in its infancy, allows users to buy items in stores without having to reach for their wallets or their phones. The retailer simply has an app on their tablet that recognizes the customer’s account and profile. Publishers could take that approach to extracting money from readers when they enter their content platform. Just before reading a publisher’s content, or upon opening the reading app, a reader could be presented with a push notification that offers two options:
- Buffet mode: Readers pay a fee that lets them read as much as they want for a set period of time. They could pay for access to content by the day, week, or month.
- Pay Per Story mode: Readers pay a set fee for each story they want to read. To pay for a story, they need only tap on a “Buy this story” icon listed by the story’s headline. Once tapped, that same button could turn into an “undo” option, which would allow readers to retrieve their payments within 30 seconds if they hit the button by mistake.
Readers should also be allowed to show off that they have tipped for stories, so they’re rewarded for their virtuous behavior. They could elect to share via Twitter, Facebook, or on their reading profiles that they have paid a tip for a particular story, or list of stories. Then they can feel all smug for contributing to smart journalism that reflects well on their personal sense of intelligence.
Gesture-Based Tips Assuming publishers have partnered with a payment platform like Square, one easy way to leave a tip on a story would be to allow a reader to use her finger to draw a number on the story she has just finished reading. If she traced the outline of the number 5, she would be prompted with a notification that says, “Do you want to leave a $5 tip?”. Tap “yes” and it’s done.
Ads Targeted at the Story Level Magazine ads have traditionally been sold as part of a bundle that includes all the magazine’s content and other ads. But because magazine bundles don’t work well in digital media, publishers will instead have to attach ads, in one form or another, to individual stories. In order to be able to charge top dollar for these ads, and to make them useful to both advertisers and readers, they should be optimally targeted, based on the reader’s location, profile, interests (if declared), and reading history. Yes, a lot of people will have privacy concerns about having such data mined for advertising, but a lot of people will be fine with it. To a large extent, Google, Facebook, and Twitter are already doing it anyway.
These ads could also be matched to the content in the story. One way to achieve this would be to sell the ads after a story has been written but before it has been published. Ad agencies could be given the ability to adapt their work to best match the content, and they could adjust their campaigns according to early results.
There should also be a self-serve option, just as there is with Google, Twitter, and Facebook. So advertisers could access the publishing platform’s ad service, stipulate the degree of targeting they want – say, male New Yorker readers who read more than five stories a week and are accessing the app from San Francisco – and send their ad out into the world.
Ad Attachments What if readers could pay a small fee to attach their own ads to a story? If, say, you’ve just finished reading a story about Europe’s hottest startups and you’re a startup founder in Silicon Valley looking for talent, perhaps it would make sense to stick a “Developer Wanted” ad to the story. Or maybe an online language school sees a story about the growing appetite for Mandarin speakers in US government jobs and wants to attach an ad that says “We can teach you now!”.
These ads could be displayed on a page that is linked to, but separate from, the story, accessible, perhaps, by a swipe to the right. At the bottom of the story there could be a small box saying “14 reader ads attached”, or something like that. Advertisers could pay higher prices for more prominent positions on that page.
Would that work? Maybe. Readers might just ignore the ad pages, unless they’re somehow incentivized (by great deals?) to check them out. I’m also not sure how great a need there would be for such a service, so this one falls into the “total experiment” category. Worth a try!
Premium Accounts GigaOm’s Matthew Ingram had a good piece yesterday that highlighted TechDirt’s “velvet rope” approach to premium services. TechDirt now offers readers the chance to buy lunch with the founder ($250), gives premium subscribers the chance to see stories before they are published, and even lets them pay to shut the site down for the day ($1 million).
In necessarily repositioning themselves away from bundling, publishers should look at premium accounts as a way to stay close to and reward their fans or communities. I’m not convinced that added content – such as special videos, picture galleries, and whatnot – are enough to pull a few extra dollars out of readers’ pockets, but I’m pretty sure publishers could make some money by selling access. Premium subscribers, for instance, could be invited to glitzy annual dinners, conferences, and happy hours attended by editorial teams, executives, and prominent people from relevant industries. Those events could in turn be sponsored, covered and packaged into stories and videos. Much like PandoMonthly, in fact.
Of course, lots of publications already do that – the New Yorker, for example. But in a digital context in which advertising might not ultimately play such a large role in publishers’ revenue mix, they will need to find new ways, and bolster existing strategies, to build and connect with a loyal user base. In a world of distributed journalism in which publishers are chiefly endorses, producers, editors, and commissioners – and not bundlers – brand loyalty is going to be more important than ever.
A Final Word None of these suggestions is a silver bullet. And even taken together, they are highly unlikely to soothe publishers’ financial woes. But all of these approaches can bring in meaningful revenue without having to rely in any way on the legacy model, which publishers are trying to extend with the launch of Next Issue. The business of magazines needs a fundamental re-think, and I offer these suggestions merely as a place to start.