Conversations with a couple of publishers this week about how offering print and digital bundles has fuelled revenue growth, deeper engagement and increased renewals. In both cases after and initial rapid growth, the number of ‘digital only’ subs has not increased much over the past few years, but the number of bundled subs continues to increase.
One of the important elements of the bundle is ensuring that the new subscribers activate their digital subs – they’re paying for it after all, and if they don’t engage with this aspect of their subscription then it is less likely that they will renew their bundle.
One of the publishers has quite a complex CRM process in place to make sure that subs use their new digital edition and then keep using it throughout the year. This involves emails, in app notifications, offline messaging and various other devices.
The other publisher has just done a telemarketing test to people who had subscribed offline, paid for a bundled sub, but then not activated the digital element of that subscription. Of the people they spoke to 70% (no that’s not a typo, 70%) activated their new digital subs there and then. That’s an unbelievable response.
I don’t know the reasons given for not activating the sub before, but one imagines it is a combination of forgetfulness, technical problems and ignorance of actually having a bundle.
Remember that this was to people who had subscribed offline, so the success of the campaign is almost certainly influenced by that, but it still shows that you should be looking at new ways to get your subscribers to engage with the digital product that they have paid for. If they do, then it’s likely your retention rates will go up, which will give a boost to both volumes and revenues.
If you’re at all concerned with digital editions of magazines you should follow @david_hicks on Twitter. You do have to endure a succession of tweets about Man United (a once-successful association football club m’lud), but between these he says some very sensible things about digital magazines.
“Sensible” in this context means of course “stuff I agree with”, and his criticisms of PDF ‘page-turners’ are generally right on the money.
These ‘digital facsimiles’ were devised as a solution to publishers’ problems, not to meet any need of consumers. They allow a magazine to pretend they’ve ‘gone digital’, when in reality they’ve done nothing of the sort. They tie a publisher and a consumer to a publishing and content schedule that dates from the days of movable type. And I don’t care what your reader survey says, people don’t like reading facsimile editions – if they did you’d be selling more of them.
A ‘proper’ digital edition will have been built from the ground up so that it works in the way a user of a digital device consumes content. It wouldn’t be issue-based; it should be updated constantly and able to draw on all the content of the title. Your magazine might support several editions or apps for different types of content, or you might have one app that pulls in material from multiple titles. The key is to identify the need and build around that, not create a clumsy facsimile and hope to drag current readers across to it.
Having set my standard firmly in the ground, I’m now going to tell you why every title should have a PDF version.
For consumers who don’t want print, produce a proper digital experience rather than a rubbish compromise. But because page-turners are simply an extension of the print product, give them away free with a print subscription and leverage the marketing benefits that this allows. (more…)
If you haven’t already read Patrick Smith’s piece for Media Briefing on VAT for digital products, then you should. How the HMRC applies its VAT rules has the potential to leave publishing companies with large unexpected costs.
Basically, print product is zero-rated for VAT (not ’exempt’ – more on that later) which means that publishers are not collecting tax on copy sales and subscriptions. Digital product is VATable at 20% (for goods serviced from the UK) so any app sales, paywall charges, online subscriptions etc should have VAT applied.
(There is discussion among publishers as to whether digital facsimile editions incur VAT. Zinio add the tax onto its customer charges, others don’t. My belief is that these sales are VATable, but you’d be well advised to try to find a definitive answer.)
As Patrick points out, the big issue comes over the bundling of print and digital subs – basically, the digital part of the sub incurs VAT, which you must specify and