Over on the shop site we run for magCulture there’s a unique publication on offer. Called My Favo(u)rite Magazine, it’s a one off where 88 ‘people who make magazines’ choose their favourite-ever single copy of a magazine. It’s been produced to raise funds for Bob Newman.
There’s an entry by Richard Turley, the creative director of BloombergBusinessWeek that encapsulates why people love printed magazines. A colleague of his had stumbled across an old title from 1971 and absolutely loved what he’d found. After they’d both looked at it and talked about it for a while Turley’s colleague said “Sadly, no one will ever stumble upon an old iPad app.”
“That tiny sentence was both a kick in the teeth and an awakening. That tiny sentence made me want to fight for magazines – for print – harder than ever…Because the magazine legacy that we’ve all inherited is too rich, too brilliant, too important to shrug off.
We can’t let print drift into irrelevance on our watch.”
The news that Zinio might be up for sale is interesting, as is the $50-100 million price tag.
Without knowing the financials it’s hard to know whether this figure is realistic, or a bit of kite-flying by the sellers, but I’d be surprised if the business was worth this much. In November last year it raised $20 million of new funding, but there’s a lack of transparency on why they wanted this, what they’ve done with it and how much is left.
Zinio is a classic example of the advantages and the perils of being the first into a market; it is by far the biggest player with by far the biggest range of magazines, but its structure and business model is geared towards it having a near-monopoly and for it to have achieved exponential growth. It obviously wanted to do for magazines what Amazon had done for books, but it has never come close. (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