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Will digital editions ever catch on?

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According to a report based on ABC and BPA statements by digital editions vendor Zinio, 148 magazines with a combined circulation of 1.3 million were available in audited digital editions in June 2005. Both of those measures increased 56% over the course of 12 months. Those 148 titles include both consumer and b-to-b magazines-all over the world.

Digital edition technology, now more than five years old and advancing quickly, is available from at least eight vendors (see box, page 21). So why aren't more b-to-b publishers embracing it?

"At this point, there's just too much focus on reducing cost and showing everyone how pretty the digital magazine is," said Paul Miller, senior VP-group director of CMP Media's Electronics and Software Development media groups. "All the suppliers have delivered what they said they would with the technology, but there just hasn't been a lot of forward momentum in four years. To be fair, the media companies are also lacking in vision. They have only focused on the cost savings, but there's a lot more we can do."

Untapped benefits

John Blanchard, VP-operations, Reed Business Information, agreed that the technology used in digital edition publishing has many benefits that have yet to be tapped. In June 2004, Reed signed a multiyear licensing agreement with supplier Olive Software for 55 of its publications. "The real key to digital editions is that we can send [the vendor] a print PDF and they break it down and reassemble it in HTML. This is a powerful capability," Blanchard said. "I can see multiple ways this technology can give us efficiencies in content management, work flow and delivery."

For example, as b-to-b media companies hope to capture a piece of the search market Google now dominates, digital technologies will play a key role, Blanchard said. "Imagine someone doing a Google search that brings the person to a digital article that looks exactly like the magazine, including the ads," he said.

"Folks are being intellectually lazy," said Miller, addressing both publishers and vendors with his criticism. "As publishers, we're as guilty as anyone else in not taking the technology to the next level. We're really in the early stages of the maturity curve and there's more to come here."

Digital's `natural' readership

Most b-to-b publishers say they are still in an experimental mode with digital editions because reader demand is low and advertisers are not willing to pay extra for the new capabilities these platforms provide-such as rich media and video advertising.

A recent study conducted by Mediamark Research for Qmag measured reader acceptance of digital technology by offering a free beta test of Qmag's digital editions to thousands of print magazine subscribers. More than 6,700 respondents completed a survey after using a digital issue. According to Qmag, 60% said they had "positive purchase intent" but only 16% of the audience that decided to try the digital edition preferred it to the magazine. Thirty-one percent reported equal preference for digital and print editions.

"For what we have now, from a technical standpoint, about 12% to 15% of our publications' readers are natural users," said Stephen Moylan, president of Reed Business Information's Boston division. "That's been consistent."

Ziff Davis may have the largest percentage of digital circulation among b-to-b publishing companies, according to David Rock, director of online partnership. "We ran out ahead of everybody three to four years ago," he said. "We aggressively pursued a large digital circulation file initially, but over the past six months, we've been heading toward a more natural blend. We want to seek the level that makes sense."

Rock said eWeek, one of the pioneer titles in digital publishing, now has 65,000 digital subscribers. Yet even with its admittedly aggressive pursuit of those subscribers, eWeek only converted 16% of its circulation to digital.

At Northstar Travel Media's Meetings & Conventions, Group Publisher Bernard Schraer decided to "offer readers the content whatever way they wanted to receive it."

"We're ahead of where we thought we'd be after a full year," Schraer said. "We're about 7% digital and we expected about 4%."

At Advertising Age, which is published by Media Business owner Crain Communications Inc., a digital edition was launched a year ago. "We didn't have a conversion number objective," said VP-Publisher Jill Manee, but Ad Age's natural conversion rate also came out at around 7%, with 4,300 digital recipients out of a circulation of 59,703.

Expansion without cost

For now, most publishers are not concerned about the relatively low percentage of their readers who choose digital editions. For one thing, they say, the readers who chose these editions are usually very happy with them. For another, publishers have deliberately limited their promotion of these products to targeted segments of their audience, such as international subscribers.

"The jury's still out on how people will use it," said Scott Vaughan, publisher of CMP's InformationWeek. "It may turn out to be that digital editions are just for specialty audiences or international distribution because of the efficiency."

"In print, we drew a line at a controlled circulation of 46,000 because of the cost," said Kerry Cannon Jr., group publisher for Travel Agent at Questex, "but the digital edition allows me to cast a wider net." Travel Age recently added 4,000 digital subscribers, expanding it's rate base to 50,000 "without costing the advertisers anything extra." But, because the expanded circulation gives the magazine a qualified circulation that's 14% to 19% higher than its two major competitors, "it gives us a competitive edge," he said.

At Advertising Age, which has a paid circulation, the digital edition costs $99 per year by itself; print subscribers pay an additional $30 to receive both. According to Manee, there are two key reasons readers will pay a premium for the digital version: "First, people who want a jump-start on the week like to be able to read it on Sunday afternoon, the day before the print issue would get to them. Also, it's mobile, so readers who travel a lot can receive it on time wherever they are." 

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