'Digital Storefront' Aims to Give Bulk of Revenue to Publishers

Consortium to Consult With Marketers as Co-Developers of Ad Types

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NEW YORK (AdAge.com) -- Magazines and newspapers that sell content through the digital storefront being planned by five major publishers will get the "lion's share" of any revenue the storefront generates, according to the storefront's interim managing director.

John Squires
John Squires
That will help the storefront attract the widest possible variety of print products, including book publishers and comic book publishers, said Time Inc. exec VP John Squires, who is leaving Time Inc. after 20 years to run the storefront at least at the start.

Time Inc., News Corp., Conde Nast, Hearst and Meredith confirmed their plans for the storefront this morning, weeks after word first emerged but with plenty of questions still left to answer.

Those questions include the identity of the storefront's first CEO. The partners in the venture will conduct a search, but Mr. Squires said he is himself a candidate.

The storefront was conceived in large part because Amazon's Kindle revealed both the potential for print content on next-generation devices and the ramifications of letting device manufactures hold too much power. Amazon takes 70% of any revenue it gets from consumers and doesn't let publishers have any information about their readers on the Kindle. Publishers are aiming for a very different revenue split at the storefront, where they hope consumers buy digital editions tailored for a variety of devices including iPhones and anticipated tablet computers.

"We really want to make it a publisher-friendly environment where we get thousands of clients," Mr. Squires said. "That's what we believe will be really terrific for the consumer. To do that obviously we have to have an economic model that's really compelling for publishers."

The storefront is also about to start consulting with big advertisers about the kinds of advertising that will appear in the digital editions it sells. Publishers need marketers and agencies alike to buy in if the storefront effort is going to succeed.

The publishers are envisioning digital editions that allow ads to include video and new functionality. "We really believe that it's going to be immersive, it's going to be friendly to brand-building and it's going to have incredible impact against consumers, plus some really great metrics," Mr. Squires said. "We're thrilled by the opportunity to do what existing print properties do well and what the web does well together."

"Clearly we're going to need advertiser support on this," he added. "We'll reach out to advertisers in a co-development mode."

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