SI Adds App Subscriptions, but Digital Costs More Than Print Alone
UPDATE See below for details.
NEW YORK (AdAge.com) -- Time Inc. launched its version of the digital future of magazines today -- introducing a single Sports Illustrated subscription for print, computers, tablets and mobile devices -- but gave no update on if and when this would include subscriptions on Apple's iPad, the dominant device among a new generation of tablet computers.
The plan, dubbed "All Access," is currently restricted to Google devices such as Android-powered phones, Google's Chrome operating system and Samsung's "Galaxy" tablet computer, but will also include HP's upcoming "TouchPad" when it launches later this year.
"Content should not get lost in our conversations about flashy new devices," Terry McDonell, editor of the Time Inc. sports group, said during a publicity event at the Time Life Building in New York today. "It comes back to the storytelling and design and the look of these things."
"What we're announcing today is we now have a subscription model that will allow you as a subscriber to have the edition on a tablet, print or on the web," he said at another point. "One price, one subscription, you get it everywhere."
Everywhere, that is, but the iPad. Even though News Corp. reached a deal with Apple to sell subscriptions to its iPad newspaper, The Daily, Apple and the nation's largest magazine publisher are still circling each other warily. Single copies of magazines like Sports Illustrated and Time are available in Apple's app store, but subscriptions are still some ways away. Apple typically takes 30% of all sales in the iTunes store, and owns the data and billing relationship with consumers, a key sticking point for publishers that want to use that data and relationship themselves.
Time Inc. executives expressed confidence that subscriptions would be coming to iTunes, but declined to give a timetable or details on the talks. "We love Apple and we were on the iPad at the very beginning," said Randall Rothenberg, Time Inc. exec VP-chief digital officer. "We have a great desire to sell subscriptions in the iTunes store. We are confident we will be able to extend this 'All Access' idea across all devices."
It is, in a sense, a magazine version of Time Warner CEO Jeff Bewkes' TV Everywhere concept, where cable subscribers would be able to log in to receive TV content anywhere, not only from the set-top box in the home. It's a simple concept that's proven complicated to execute, given myriad distributors and cable agreements.
The magazine version is more straightforward, but it still introduces middlemen such as Apple and Google after 100 years during which nobody came between subscribers and publishers but the mail man.
Google was all too happy to implement All Access because its struggling Android App Market could use the content as a way to drive adoption of Android-powered mobile devices. Apple, however, is reluctant to allow publishers to the most basic data about who is subscribing, including name, ZIP code and an email address. News Corp.'s The Daily has a work-around that asks subscribers whether it's OK for Apple to share that information with The Daily for marketing purposes. That opt-in approach might not assuage magazine publishers.
That data has long been a key business for publishers, which marketed subscriber lists as a means of offsetting the cost of the physical product.
Another key piece of the model, of course, is advertising. Time Inc. advertisers won't automatically have their ads on all devices. Its tablet editions are sold to marketers on a sponsorship model that restricts the ad load to seven sponsors. Last fall, the company described research showing that advertising on a tablet has a big emotional impact on readers.
Time Inc. is also arguing that it will earn additional revenue from digital subscriptions. Under All Access, print plus digital will cost $48 a year or $4.99 a month, while a print-only subscription is $39 a year. Digital-only subscriptions are also more expensive than print: $3.99 a month, or $47.88 a year. Sports Illustrated has 2.9 million print subscribers.
"Emerging media allows us to transform our business in a way, I guess two to three years ago, we didn't see coming," said Mark Ford, president of the Time Inc. sports group.
With several devices and two operating systems -- Android and HP's Web OS -- Time Inc. is hoping to circle the wagons on its main quarry, Apple. For subscribers, it's offering another incentive: Sports Illustrated's upcoming Swimsuit Edition, which will be available on all devices, along with 80 videos. As Mr. Terry said, "That's like three movies!"
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UPDATE: Sports Illustrated later confirmed that it will soon do away with print-only subscriptions entirely, selling the "All Access" package bundling print and digital editions instead.