woodwing

The business potential of a tablet device

Suppose you are publisher of a consumer magazine. You publish monthly, your circulation in print is 100 and you are planning to publish a digital version of your magazine on a tablet device (and you are in the lucky position you have the right system to create this ;-) ).

How many copies of the digital issue 'April 2012' do you think you will sell and what happens to your profitability?

Assume:

• Your printed circulation is divided into 75% subscribers and 25% single copy sales
• In 2 years you convert 20% of your subscribers and 10% of your single copy buyers to the tablet
• In 2 years you attract 15% new tablet readers (compared to your original print circulation)
• The price for your tablet issue equals the print issue
• The margin on your printed editions is 10% (being the difference between retail price and fixed + variable cost)
• The margin on your tablet edition is 15% (since your variable cost will be less, i.e. print and distribution)

Based on these assumptions:

Your circulation will increase by 15%.
Approximately 30% of your readers will use the tablet, 70% will read print.
And your profitability will increase by 1% per issue.

Not impressed?

Now suppose you are the publisher of Playboy in the USA. Your current circulation is 2.6 mio. copies a month, selling for US$ 5 per copy and you decided to publish a digital magazine for the tablet. Congratulations, you just increased your profit in 2012 by almost US$ 400k PER ISSUE!

Stay tuned for the next episode: the advertising potential on the tablet.