New Study Forecasts $3 Billion in Subscription Revenue From Interactive Periodicals by 2014

NEW YORK, Aug. 16 /PRNewswire/ -- A new, comprehensive assessment of consumer demand for interactive periodicals projects the potential for $3 billion in revenue for the U.S. magazine and newspaper industry by 2014. The study conducted by Oliver Wyman for Next Issue Media – the digital publishing consortium of Conde Nast, Hearst, Meredith, News Corporation and Time, Inc. – indicates that after accounting for potential cannibalization of some print subscriptions, the industry could realize $1.3 billion in incremental revenue.

The in-depth study employed Oliver Wyman's Future Marketplace Simulation platform to quantify expected demand across nearly 230 periodical titles. Surveying 1,800 U.S. consumers, it demonstrated the likely formats and features of emerging interactive periodicals and simulated actual purchase / consumption decisions that consumers will be making by the 2011 holiday season and beyond. The study did not assess impact on advertising, commerce, single copy sales or other potential revenue streams from interactive periodicals, which could add further to this growth potential.

The study's findings, summarized in a detailed white paper available at www.nextissuemedia.com, build upon documented trends in the marketplace. These include the emergence of color, touchscreen portable devices that enable an immersive eReading experience and growing comfort by consumers in accessing and paying for digital content via a variety of portable devices.

"Our mission at Next Issue Media is to offer consumers the consummate interactive reading experience across a wide array of the world's finest curated content," said Morgan Guenther, president and CEO, Next Issue Media. "This study confirms one key element of our industry-wide opportunity – namely, increasing overall circulation revenue while driving brand value among both existing and new customers."

Five key findings underpin the revenue projections forecast by the study:

1. Among device-owning subscribers, the availability of interactive editions at the point of renewal, at the same price as today's print editions, drives a 9 point increase in the overall subscription renewal rate, from today's 55% industry average to 64%.
2. Many subscribers perceive print and interactive formats to be complementary; 30% of renewing subscribers choose a bundled print and interactive edition, at a 33% premium to the stand-alone price of either.
3. The interactive format enables effective cross-selling via recommendation engines and browsing features; 17% of current subscribers make additional purchases.
4. Automatic renewals eliminate the traditional "bill-me later" model and greatly reduce churn, from an average of 45% today to 25%.
5. The introduction of interactive editions in an online store setting, at the same price as today's print editions, triples uptake rates among device-owning non-subscribers, from 5% to 15%.

"The landscape for digitally distributing magazines and newspapers is about to rapidly change," said Martin Kon, partner and head of the global media and entertainment practice at Oliver Wyman. "Our Future Marketplace Simulation shows significant consumer enthusiasm for interactive periodicals that offer enhanced features, personalization, multimedia content and optimized layout and navigation."

The Next Issue Media / Oliver Wyman study further revealed that interactive publications appeal equally to men and women. While younger consumers will have the highest adoption rates, all age groups show a net increase in circulation revenue.

To realize the revenue potential, publishers will need to create new interactive products; offer a large library of cross-sold interactive titles; develop innovative subscription packages; find mutually beneficial partnerships with leading OEMs; carefully define future advertising standards and metrics; and fundamentally rethink internal workflows, capabilities and organization.

About Next Issue Media

Next Issue Media, the digital publishing consortium of Conde Nast, Hearst, Meredith, News Corporation and Time, Inc., is establishing an end-to-end publishing platform to develop, market and deliver all forms of paid content – a vast array of magazines, newspapers and more – to consumers via the digital device of their choice.  The venture's mission is to provide not only publishers, but advertisers, consumers and technology partners with an easy and economical entree into the eReading channel. For more information, visit www.nextissuemedia.com.

About Oliver Wyman

With more than 2,500 professionals in over 40 cities around the globe, Oliver Wyman is an international management consulting firm that combines deep industry knowledge with specialized expertise in strategy, operations, risk management, organizational transformation and leadership development.

The firm helps clients optimize their businesses, improve their operations and risk profile and accelerate their organizational performance to seize the most attractive opportunities. Oliver Wyman is part of Marsh & McLennan Companies (NYSE: MMC). For more information, visit www.oliverwyman.com.

SOURCE Next Issue Media

WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM?

440k+
Newsrooms &
Influencers

9k+
Digital Media
Outlets

270k+
Journalists
Opted In

GET STARTED