Forbes reporting:
The so-called first mover advantage is really only an advantage if
you don’t get too far out ahead of your customer. Founded in 2001, the
digital magazines company Zinio was arguably a good eight years ahead of
its time. After all, Apple AAPL +0.8%
hadn’t yet come out with the iPhone, much less the iPad, the technology
that would finally sell the average reader on the idea of a magazine
consisting only of pixels.
To be sure, being early to the game has had its benefits. With 5,500
titles, Zinio has the deepest offerings of any digital newsstand, and
its 12.5 million registered users rank it among the biggest vendors not
named Apple, Amazon or Google GOOG +1.75%.
But there’s also a bit of catching up to, with consumers increasingly
demonstrating a preference for digital subscription plans that offer
flexibility and variety rather than ownership, like the ones that have
made Netflix NFLX +1.02% and Spotify into household names.
Zinio’s answer to that demand is a new offering called Z-Pass. For $5
a month, a customer receives her choice of three magazines from a
catalog of more than 300. Subscribers can swap titles in and out as they
choose and add more to the plan for $1.50 each, although some premium
magazines, such as the Economist, cost more....
Zinio president Michelle Bottomley says Z-Pass grew out
of a round of consumer research the company did last fall. “We asked
them what they thought would make it easier to read more digital
magazines,” she says. “One of the things we noticed is that price per
unit was a big barrier.”
That $5 figure didn’t come out of nowhere. “We asked them if there
was a price point they couldn’t resist,” says CEO Rusty Lewis. He likens
the cost of $1.66 per issue to “the price of a cup of coffee.”
Five bucks also makes Zinio’s product a lot cheaper than the one offered by Next Issue Media,
the digital magazine service owned by a consortium of big publishers,
which sells subscription packages priced at $10 and $15 a month. While
the $15 option includes unlimited access to all NIM’s titles, its
library is far more limited, numbering 82 titles as of March.
http://www.forbes.com/sites/jeffbercovici/2013/05/16/zinio-the-granddaddy-of-e-magazine-sellers-moves-to-the-netflix-model/
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