November 27, 2009
Publishers Creating Online Newsstand
A consortium of magazine publishers including Time Inc. and Cond© Nast plan to jointly build an online newsstand for publications in multiple digital formats, according to people with knowledge of the plans.
The formation of a new company to run the online newsstand "” sometimes characterized as an "iTunes for magazines" "” may be announced in early December. Time, Cond© Nast, Hearst and Meredith all intend to be equity partners in the new company, although the deals have not yet been signed.
Executives have talked about an iTunes model for magazines for months.
In the face of slumping print circulations for many magazines, the publishing houses are eager to exert some control over digital readership, said people at the companies, who spoke on condition of anonymity because they were not authorized to talk about the plans. Some newspaper owners have also expressed interest in the joint venture.
Time Inc., publisher of Time, Fortune, Sports Illustrated, People and other magazines, is carrying out largescale layoffs after cutting around 600 jobs last year.
The New York Observer reported Tuesday that John Squires, the Time Inc. executive, would become the new company's interim chief executive while the partners looked for a permanent head. In June, Ann Moore, the Time Inc. chairwoman, gave Mr. Squires the responsibility of creating a digital road map for the company.
"It's increasingly clear that finding the right digital business model is crucial for the future of our business," Ms. Moore said in a memorandum at the time. She added, "We need to develop a strategy for the portable digital world and to refine our views on paid content." A Time Inc. spokeswoman declined to comment Tuesday.
The magazine industry has been generally slow in experimenting with digital products, but they have shown more interest this year in extending the print experience and audience. This month Cond© Nast became one of the first publishers to repurpose an entire magazine issue for the iPhone, selling a copy of GQ as an application for $2.99.
"We know that the world of digital is far grander than display advertising," Charles H. Townsend, Cond© Nast's chief executive, said at a demonstration of the application last month.