The Future of the Magazine Industry Doesn’t Include Magazines

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Among the beneficiaries of the iPad’s success is Howard Schultz, CEO of Starbucks. He is perhaps an unlikely winner considering that, in 2010 at least, coffee can’t be consumed over an electronic interface. However, Starbucks is the largest wifi network in North America, with some 30 million users logging on each week in Starbucks outlets. At first, says Schultz, these customers “were mostly synching their emails. Then people began coming to our stores and looking for content.”

Schultz saw an opportunity. Earlier this week, the company launched what they are calling the Starbucks Digital Network. Customers who bring their iPads to one of Schultz’s coffee houses will be able to access “free premium content” from a number of sources such as The New York Times and health giant Rodale, publisher of Runner’s World and Prevention. What does this mean? Without acquiring any more real estate, or nailing together a single shelf, Starbucks is in the act of becoming the country’s largest newsstand.

via World Future Society.

There Are 11 Comments On This Article.

  1. The iPad is a game changer. It is the first device that allows the consumption of content in a user friendly way with exceptionally high quality. I bought one the first day they went on sale. It has become an indispensable tool for me in the field, office, and home. It is causing other companies to deliver similar devices. Eventually, these tablet computers will be the way we consume information and desktops and laptops will be the way we produce information.
    As for the extinction of the magazine, not really. It’s just the paper that will be done away with.

    Schultz’ decision will help to accelerate the developing trend since competitors will have to follow suit. Then, when the execs of companies engaged in information distribution stop in for coffee and see the iPAd revolution of themselves, they will finally understand the direction of the future of the publishing industry. And they might even realize that they will not need all those ad dollars they now need and have a hard time getting because their production cost will be much lower and they won’t have mailing costs. Maybe they will even realize that top quality content might be worth a subscription price that people will actually pay if they do not have to wade through pages of ads they don’t care about. I must be dreaming ………….

    • @Richard Weisgrau, Check out this report on the rapid decline of the on-line version of Wired, which has so far been the most successful digital magazine:

      http://www.wwd.com/media-news/fashion-memopad/scott-dadich-is-executive-director-of-digital-magazine-development-at-conde-nast-3340095/

      The reality is that people with tablets, much like those with laptop computers, want free content. In order for the magazines to make this work, they need ad revenues. The word in the advertising community now is that the low distribution volume does not support the investment.

      The magazines could dump their websites, which would force readers to the digital editions, but I don’t see that as viable. Advertisers pay the revenues to make magazines work, and keep the subscription costs low enough to encourage continued reading. So far Barnes & Noble might have a way forward with their new plan to allow browsing on the Nook Color, but it is way to early to tell.

      The iPad, and other tablet computers, are elegant technology, and I expect greater usage. Some of the volume will replace netbooks, and some will replace laptops. The devices that tablets replace are more expensive. Until the expense becomes far lower, there is not a functional way that lower cost content will be replaced by higher cost devices. Right now tablets are an unproven niche.

      Again, compare the volume of iPads sold to the volume of digital magazines paid for to view on the iPad. The percentage is extremely low. The lessen I see from this is that web content will continue to prevail over paid content.

      • @Gordon Moat, I think you are correct in the short run, but in the long run when tablets proliferate I think the online media game will change. The key to that change will be expert content at a fair price. I read the paper edition of the NY Times every day. I read the iPAd Editors Highlights on my iPAd. I prefer the iPad. If they had the complete NY Times available for the iPad I’e be willing to pay three times what I pay for the paper version.

        One of my four books was made into a Kindle edition. It sells for half the price of the printed version. Too soon to fully evaluate, but I think the Kindle edition will sell in more than 2 times the volume of the printed book.

        The one advantage I have at 68 years old is that I have seen how long it takes to actually make a paradigm shift. I am confident that in ten years time the tablets will rule and content will be subscribed to. We are, in my opinion, on the cusp of change in values due to our continuing economic woes. More and more people want value, and they cannot get it for free.

        • @Richard Weisgrau,
          I think you’re in the minority if you’re willing to pay more for your newspaper’s iPad version than the printed one. It’s much easier to justify a price for a tangible object that gets delivered to your doorstep as compared to a virtual object you have to download onto your own expensive device via your own internet connection.

          It’s interesting that you say you’ve seen “how long it takes to actually make a paradigm shift” when in fact the whole point of Thomas S. Kuhn’s “The Structure of Scientific Revolution” which made the term “paradigm shift” famous is that this is not a slow, gradual process.

          • @John, I suppose one’s notion of “slow. gradual” is at point. I think we can all agree that photography is now a digital technology (more so than film). In my mind that transition was a paradigm shift. When did it start. Well, as I recall it began in the early eighties with the Sony Mavica camera and by the mid eighties with the Kodak adapted Nikons that cost $25,000. Twenty-five years later the shift is complete for all intents and purposes. Does 25 years qualify as “slow, gradual?” In my mind it does.

            • @Richard Weisgrau,
              The point is that if it’s a slow process it can’t qualify as a paradigm shift. A classic example for a paradigm shift is the shift from the Ptolemaic (geocentric) model of the world to a Copernican (heliocentric) model. The point is that the realization that the earth goes around the sun is not a slow, gradual process. Once an individual realizes this his whole view of the world changes from one moment to the other. That’s a paradigm shift.

              Now of course one can argue that it’s a sudden change at the individual level but a slow and gradual process on societal level and that’s certainly true. However, I still don’t think that the move to digital technology qualifies as a paradigm shift precisely because, even at an individual leven, it is a slow process. Perceptions and ways of dealing with content, interacting with people and taking pictures have certainly changed but it’s not like our world view is being turned upside down from one moment to the other. We’re gradually adapting to new circumstances just like people have done for all of history.

              It should also be noted, though, that the term “paradigm shift” as intended by Kuhn is restricted to scientific theories only where it makes much more sense to use it.

              • @John., I would have to disagree that the recognition of change by an individual is a paradigm shift. I understand Kuhn’s coinage of the term and its initial relationship to science. However, in common usage, I believe that a paradigm sift is a change in doing and/or thinking from one way to another. For example, the printing press was the beginning of the age of literacy, but widespread literacy took substantially longer than the day of the first press run, maybe a hundred years longer. That was in my mind a paradigm shift as wad the shift from an agricultural to an industrial economy.

  2. I’m not sure, @RichardWesigrau, free content is more likely the wave in my view. If you’re having coffee anyway, and want to read the Times, you’ll absolutely go to Starbucks. Well, at least, I will. Having just left the Metro area and now living in a beach community, I’m quite happy to schlep over to the one Starbucks in town for a decent cup o’Joe and an infusion of verified, well-written, original content. For free.

    Plus think of all the free content being churned out every minute on the internet from all those people trying to win keyword phrases. If free isn’t the way it’s going, then it’s all going to have to be really cheap to make it? I can feel the old 80’s mantra returning – we’ll just have to “make it up in volume”!

    • @Juliet Johnson,
      You can get the free newspaper at Starbucks but I don’t think you’ll have much luck finding a decent cup of coffee there.

    • @Juliet Johnson, I agree that free is the prevailing desire of people. However, good content cannot be produced and distributed forever for free. When advertising pays for content and distribution it is not free. We pay indirectly and erroneously perceive it to be free since we do not attach a percentage of the cost of goods purchased to the ‘free’ content.

      Does it all have to be “really cheap” if not free? I think good content has to be priced fairly and fair will always be determined by market forces. I do know that good content will not be produced in any meaningful quantity if there is no financial reward for doing so. Someone is going to have pay for it. That someone is us. It is only a matter of how we pay, directly or indirectly. I prefer directly.