Digital Subs Rising, The Economist Unbundles Tablet Editions From Print
Ever since Apple introduced the iPad in April 2010, magazine publishers have been trying to figure out how to make the most of their app editions.
Time Inc. gives its print subscribers access to tablet and smartphone apps under a strategy it calls "All Access" -- designed in part to shore up print. But it gave up on an attempt to use that more robust package to underpin a price hike at Sports Illustrated from $39 to $48. Rival publishers such as Hearst and Conde Nast, meanwhile, have resolutely sold app subscriptions separately, figuring they're leaving money on the table otherwise.
Now an important independent magazine has left the "All Access" camp: The Economist last month stopped bundling app access with all new print subscriptions, charging more to newcomers who want both and introducing a print option that comes without apps.
We asked Michael Brunt, senior VP-head of circulation for the Americas and global head of marketing at Economist Digital, to explain why The Economist decided to unbundle now and how the early results are looking.
Our conversation has been edited.
Advertising Age: How exactly were you selling subscriptions until now? All print subscriptions came with tablet access?
Michael Brunt: You could choose print and it would include access to digital. Or you could choose digital only.
So we've got three choices now. There's a print-only, a digital-only and then a bundle.
Ad Age : Is print-only literally what it sounds like, without full access to the website?
Mr. Brunt: Print-only does have access to the website.
Ad Age : Why have you been bundling your print and tablet subscriptions together these past two years?
Mr. Brunt: I think it was really about gauging demand for our content in a digital format. So we launched our apps and we wanted our current readers to be able to access those and gauge the appeal they have and see how much our subscribers would value them.
Ad Age : So why unbundle print and digital now?
Mr. Brunt: Over the last couple of years, we have found that increasing numbers of people were paying for digital-only and that there was genuine demand for both. A substantial number of print subscribers had activated access to our digital content. It demonstrated demand for people reading our content in both print and in digital.
Our subscribers really value our content, and we wanted to create a pricing structure that made sense for the way that people wanted to buy our subscription. People think it's reasonable to pay a little more for both and to give them a choice for a lower cost if they just want print or they just want digital.
Ad Age : Did this also give you the opportunity to charge more for print-plus -digital?
Mr. Brunt: Yes. So our print is now $127, and that 's what it was for the previous print-and-digital bundle. And our bundled price is $160 in the U.S.
Some people definitely still choose to only read us in print. But that is definitely a minority. People are willing to pay for our content across multiple platforms. And it's really important. A large part of our revenue comes from our subscriptions.
Ad Age : Which plans have new subscribers been favoring since October?
Mr. Brunt: The digital-only price is the same as the print-only price. So we have around a quarter of our subscribers choosing that option. A quarter are print-only. And half are choosing the bundle.
It doesn't vary that widely from our current subscribers. Around a similar amount chose digital-only before. Before we changed the pricing, we had a digital-only option and an increasing number of subscribers were choosing that .
Ad Age : Are existing print subscribers losing their tablet and smartphone access?
Mr. Brunt: We've maintained our access for our current subscribers.
Ad Age : How and when are you going to move them to the new structure?
Mr. Brunt: I'm actually currently modeling different scenarios for that . At the moment, I'm maintaining current prices for our current subscribers.
Ad Age : Do you expect to increase your overall paid circulation this way? And will you increase your rate base, the paid circulation you promise your advertisers?
Mr. Brunt: As you may know, we're launching a digital rate base in January. We are currently able to maintain our print rate base at the same level but we will see print volumes decline. It doesn't look like that 's going to affect our rate base in the short term. But with this structure we've launched, I think there's a lot more clarity. It's actually increased the volume of subscriptions that we get. We're growing our paid digital circulation pretty fast.
So the overall number of print or digital subscribers or single-copy buyers is steadily increasing. But we know at some point our print circulation will decline and we're ready for that .