March 17, 2010

IPad Changing Magazine Industry Rules

Magazine publishers are starting a new era as consumers await the arrival of the iPad.

According to the Associated Press, The Audit Bureau of Circulations said Tuesday that it has changed its definition of a digital magazine by adapting to the new tablet-style devices.

The new rules allow publishers to count paid digital subscriptions as part of a magazine's overall circulation, as long as the same editorial and advertising material is included.

This would allow custom designs for their articles and photo spreads for the iPad.  Without this rule change, publishers would only be able to count digital editions as they appear exactly the way they do in print.

Magazine publishers are happy with the change because they charge for ads based on the size of their so-called rate base, which is the circulation they guarantee to advertisers.

Newspapers have had looser restrictions by comparison.  Because they do not guarantee a rate base, they count people that pay for access to their Web sites regardless of what ads run there.

The Audit Bureau must approve each software application for the iPad and other devices in order for the tablet circulation to count.  The Bureau has already approved one for Conde Nast's Wired magazine, which will be available for iPads starting in June.  Conde Nast also plans to have its own iPad versions of GQ, The New Yorker, Vanity Fair and Glamour.

Subscriptions on many e-readers like Amazon Inc.'s Kindle do not count because those editions do not carry ads.  However, the iPad has a backlit screen that has the ability to carry color advertising alongside articles, opening up another potential revenue stream.

Magazines will only find this circulation boost if they can persuade readers to pay for applications.  Few consumer magazines or newspapers have succeeded in getting large numbers of readers to pay for access to Web sites.

GQ's iPhone app may provide the best barometer as it meets the auditors' new guidelines.  According to company figures, there are about 6,800 people that have downloaded the first issue for $2.99.  In January there were over 15,100 downloads. 

Apple's iPad device is scheduled to go on sale on April 3rd and preorders are being accepted now from their website.


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