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The web is putting magazine publishers under increasing pressure


The web is putting magazine publishers under increasing pressure

According to a study by the PricewaterhouseCoopers (PwC) consultancy, around 60 percent of magazine readers worldwide would like a digital edition, at least to supplement the print product. Readers under the age of 15 even prefer digital magazines to print editions.

The consultants warn that the Internet is increasingly putting the traditional business model of magazine publishers under pressure. The development is forcing publishers to realign their business model. “Additional advertising revenues will hardly be able to compensate for the losses in sales. Publishers have to open up new sources of revenue by making greater use of the brand potential of their magazines, for example through target group-oriented online shops,” comments Frank Mackenroth, partner and head of the Entertainment & Media industry group at PwC.

Magazine publishers currently generate around 80 billion US dollars (50.3 billion euros) in annual sales worldwide. By 2012, PwC forecasts revenue to increase to $95 billion. The share of sales from the digital business will then be between 10 and 20 percent. Even if some publishers have already discontinued printed magazines in favor of digital editions, the consultants believe that this will remain the exception for the foreseeable future. However, as the experts determined in their study, every second reader would buy their favorite magazine even if it was only available in digital format.

The consultants observed little willingness among women in particular to only read their favorite magazine on the screen. Only 29 percent would buy a purely digital edition, for men the proportion is 41 percent. The preferences of the buyers also depend on their national origin. In China, India and Russia, for example, between 70 and 80 percent of respondents have no problem reading magazines exclusively on their cell phones or PCs. In Germany and the Netherlands, on the other hand, only 35 percent would be willing to do so. Even in the US, only a good half of the readers would remain loyal to a magazine that is only published digitally.

The analysts report how much a digital magazine can cost also depends on the type of digital offering. On average, buyers would only pay 35 percent of the price of the print edition for a magazine on their cell phone, but 47 percent for an e-paper on their PC. In a package with the printed title, digital magazines would even become a loss-making business for publishers. Because for e-paper and print magazine together, consumers are only willing to pay 66 percent of the price of the magazine. This also explains why magazine publishers design digital editions and the print version of their magazines differently.

For the study “The medium is the message – Outlook for Magazine Publishing in the Digital Age”, PwC surveyed a good 5,000 readers in ten countries, including over 500 from Germany.