Sweden-based digital magazine aggregator Readly held its annual general meeting in Stockholm on Tuesday. The news was mixed for investors.
The good news is that the company has a product that is popular with people who taste it. Subscriber revenue is growing, as are returns to publishers from the more than 7,000 magazines and newspapers hosted on the Readly platform.
But making a profit has so far eluded the platform. After offering entry-level prices, Readly decides to raise prices to improve the bottom line.
The bad news for Australian customers is that, in an effort to increase revenue, Readly is raising its price in Australia. The old price of $9.99 per month is now $11.99. Existing subscribers get the old price for another two months before the increase takes effect. New subscribers must pay the new price immediately.
Costs more, but still a bargain
There are two pieces of good news associated with rising prices. New subscribers get two months free to explore the service before they start paying the monthly fee. And, perhaps most importantly, Readly is still a bargain at the top price.
Not just because it compares well with other international markets like the UK where subscribers pay £10 a month. (You don’t need to know the intricacies of exchange rates to realize that $12 is much cheaper than £10.)
Subscribers have access to full digitized versions of approximately 7,500 magazines and newspapers. Last year, the platform added 2,500 magazines and more than 300 daily newspapers.
For publishers, being part of the Readly platform provides another source of revenue from people they can’t capture with the print product. Publishers can also have their product featured on a global newsstand.
Because the magazines on Readly are exact reproductions of the printed product, a key attraction for subscribers, publishers also get the ads displayed to digital audiences.
Australian publishers jumped on the Readly offering within a decade of its launch. You’ll find most Are Media titles on the platform, as well as News Corp Australia magazines, as well as publications from nextmedia and Lovatts Media.
Recently Universal Magazines joined the platform, with Readly claiming they were the latest of Australia’s major magazine publishers to come on board.
Getting logs on the platform was a bit more difficult. No News Corp or Nine Entertainment titles in the books yet. From Great Britain, The Guardian and The Observer have been available for some time. There are several other national tabloids available and a wide range of regional newspapers from across the UK. But as in Australia, no News UK papers yet.
Retailer perspective on magazines going digital
Magazine retailers are understandably wary of the digital trend. News agency owner, newsXpress news agency marketing group manager and industry blogger Marc Flecher Told Media week:
“There’s no point in any of us being angry at developments like this. Everyone is doing what they have to do to move forward with change.
“Newsagents do it in stores with the way they allocate space to magazines, publishers do it by finding different ways to connect with their communities, and they find different models for making money.
“[Things like Readly] are now part of life. I have two wishes when you ask me what magazine publishers do.
Retailers want higher cover prices
“One would be a wish for more transparency, and that goes for both newspaper publishers and magazine publishers. And I mean more transparency on their trajectory. The other wish is that they consult their cover prices. The selling price is the sole determinant of what the retailer does. We receive 25% of the cover price. The deliberate withholding of cover price changes, and by that I mean increases, reduces in real terms what the newsagents earn.
“It’s problematic for the newsagent’s chain, but also for the publishers, because the newsagents will lose interest.”
When asked if higher magazine prices might mean selling a few magazine copies, Fletcher replied, “Publishers would say yes. Several newsagents told me recently that it would be great if they could set their own price.
“I think back to 15 years ago with the newspapers. Before News Corp and then Fairfax realized they could raise their cover price without significantly hurting their sales. They resisted and only had very small cover price increases. More recently, they have started to increase more and this does not worsen their trajectory.
“The trajectory still isn’t great, but it doesn’t make it worse. There are magazines where their loyal customers will pay more.
“If you look at titles like The Australian Women’s Weekly or Better homes and gardensan increase in the sale price would not harm their sales.
“We are at a point where the newsagents will take care of it and not complain too much. But they will no longer engage as before.
Mark Fletcher on selling magazines
Fletcher noted that he ran four news agencies, and one of them did not sell magazines. “The most recent branch I’ve had is in Glenferrie Road, Malvern. This shop makes $400,000 a year in magazine sales – a very important part of the business. What happens in store, c is that we are seeing growth in magazine sales and that is coming from outside of the top 100 titles.
“The interest in special interest titles is incredible. We stock the big weeklies and monthlies of course, but it’s the specialist titles that we can stock and that’s something that sets us apart from the supermarkets.
“But it means Are Direct, which used to be Gordon and Gotch, is better with its distribution.
“The retail sector has always seemed to be capital-starved. There was no infrastructure for the efficient allocation and distribution of magazines.
Fletcher added: “They would say it’s not true. But to me, the evidence suggests he never got what he really needed.
Niche magazine audiences are passionate about print
Fletcher gave as an example a customer with a niche interest in a particular type of train. “A customer should be able to go online and see which newsagent is getting that magazine. As a retailer, I should be able to walk in and order a new title in seconds. Instead, I have to navigate a manual process that assumes I’m not an expert at what I’m doing. Retailers wonder why should they care? »
As for clients who want a specialist title, Fletcher noted that there are people who will travel an hour to get what they want. “I didn’t think in 2022 that would be the case.”
Retailers need good service to encourage them to hold a wider range of titles and give them the exposure they deserve. Fletcher is still traveling and rummaging through newsagents and magazine sections and he’s noted that some major retailers aren’t giving titles the space and range they once had.
This is not a problem unique to Australia of course, with Fletcher noting that innovation in the magazine space is lacking in most markets.
Is there still a place for magazines in retail? “There are, but not at the levels we’ve seen in the past.”