January 23, 2015 Last Updated 1:05 pm

The Newsstand dilemma: changing subscription options risks losing loyal readers

The rules of the various digital newsstands mean changing pricing may come with dire consequences similar to pulling an app and launching a completely new one

The relaunch of App Publisher is only a week or so away (we’ll let you know, that’s for sure). Writing and editing content, getting contributions, creating graphics and covers are easy compared to the problems one encounters with pricing inside a digital newsstand.

Many established publishers who initially launched their Newsstand apps with single issue, monthly and annual subscription options, are finding that offering a monthly subscription is like holding a tiger by the tail. The monthly subscription option drove much of the sales as readers saw the option as a way to get a discount on the first issue they bought without having to commit to an annual subscription. But Apple sends readers subscription renewal notices each month, thus encouraging readers to opt out.

Cosmo-pricingBut publishers can not just eliminate the monthly option without losing their existing readers and so it takes a brave publisher to admit they have been wrong and to end their pricing scheme.

Some magazines are seeing reduced sales after initially seeing only growth. Updated circulation audits are due to be released soon, and many publishers and industry observers are curious if digital editions sales will continue to see growth, or will stagnate. Not all popular magazines reported growth in the last audits, but sometimes the reasons can be complicated (like a buggy app that is not fixed in a quick manner).

For Paul Blake, the publisher of App Publisher, and I, the problems of pricing become more complicated by the fact that the digital magazine’s publishing frequency is changing. In 2014, App Publisher appeared eight times: four standard issues, and four directory issues. In 2015, the plan calls for there to be six standard issues, with (maybe) two additional directory or special issues.

Those extra issues are there because the original pricing had only two tiers: single issue pricing ($4.99) and a monthly subscription level ($1.99). The problem with the monthly subscription being that it didn’t really match the publishing frequency and that Apple was sending out those renewal notices.

How would you price the new App Publisher?

The obvious way, if it were a new digital magazine, would be to offer single issues, as well as semi-annual and/or annual subscriptions. But for existing titles that means losing all those current monthly subscribers lose their subscriptions (and the revenue!).

(It is important to note the mechanism concerning eliminating a subscription level. If you go into the Newsstand tab of iTunes Connect and eliminate a level, the reader continues to get that subscription until the end of the contracted term. If that is a year, you only lose them after they have received 12 issues – whatever the number of contracted issues were. So if you eliminate the monthly subscription level you lose them once they have received that one issue – basically instantly.)

For many self and small publishers, dealing with subscription levels are already low, losing current subscribers is a painful thought. My own thinking, as a magazine publisher for many years, is to take the pain and start again. Learn, and then try to get it right the second time around.

But publishers of popular consumer titles are threatening their own jobs by reporting a dramatic drop in digital circulation without support from the corporate suits. Without it, they are often stuck with that monthly subscription option – hating the reader turnover, but not daring risking even further losses by changing their price scheme.

  • Nick Martin 3 years ago

    Really good points!

    Curious, what will you decide to do with App Publisher subscriptions?