fashion-memopad
fashion-memopad

Condé Nast, Amazon Ink Subscription Deal

Deal streamlines the sale of magazine subscriptions through the “1-click” shopping platform on the online retail behemoth.

fashion-memopad/news

CONDÉ LINKS WITH AMAZON: It’s good to be the king. On Tuesday, Amazon.com and Condé Nast struck a deal to streamline the sale of magazine subscriptions through the behemoth online retailer’s signature “1-click” shopping platform.

The development was in keeping with publishers’ recent efforts to expand their methods of distribution beyond traditional consumer marketing, like direct mail and subscription inserts, and a slew of more recent digital merchants, like Apple’s Newsstand, Google Play and Next Issue, a digital newsstand co-owned by the major magazine publishers, including Condé, Hearst and Time Inc.

More profoundly, an Amazon-Condé alliance underscores a realignment of the media landscape and the increasingly vital importance of technology giants for the magazine industry to reach new readers. “It recognizes the ascendancy of Apple and Amazon as first points of sale for entertainment and media,” said Ken Doctor, a media analyst at Outsell.

As print circulation, including subscriptions and newsstand, has declined — 0.1 percent for subs and 10 percent for newsstand just in the first half, according to the Alliance for Audited Media — publishers have moved, some faster than others, to make their magazines available on as many platforms and distribution venues as possible.

Apple’s Newsstand was until now the most prominent. Condé and Hearst started peddling their magazines there in 2011, while Time Inc. jumped on the bandwagon last summer to encouraging results. Digital subscriptions are already helping stabilize circulation figures — sales nearly doubled from the same period last year to an average of 10.2 million, which now accounts for 3.3 percent of overall circulation, according to AAM. Amazon, on the other hand, offers a tantalizing 215 million customers, according to its most recent earnings report.

A partnership with the retailer affords Condé new platforms of discovery; reading, by way of Amazon’s Kindle Fire and other devices, and transaction — readers would now purchase or renew their subscriptions, both print and digital, through their existing Amazon accounts. The service is being referred to as “All Access.”

“You put the three together for Amazon, and similarly for Apple, publishers have had to acquiesce and make relationships with these companies that have huge reach,” Doctor said.

Condé Nast president Bob Sauerberg described the deal as a continuation of the wider sales strategy that started in 2011 by making Condé magazines available on the Apple Newsstand.

“The thing we learned is that consumers want our content in all platforms,” Sauerberg said.

He said he expects to see a growth in the composition of circulation in a year, though he declined to spell out exactly what the company’s expectations are.

“It’s fair to say we’re very bullish in how this is going to help us in building more volume for Condé,” he said.

Through the end of last year, Condé’s overall circulation, including digital replicas, was 18.6 million copies compared to 32.9 million at Time Inc., 31.6 million at Meredith and 30.7 million at Hearst, according to AAM.

An additional perk for Condé is that it will have access to all the customer data it normally got from traditional consumer-marketing efforts. This had been a point of contention when publishers were negotiating with Apple, though Sauerberg said that has since been resolved and it now also has access to that information from Apple.

One possible risk, Doctor warned, is that a publisher that has a long-standing relationship with a customer might lose it now that there’s a third party involved. Additionally, if a reader renews via Amazon, who gets a cut of that subscription?

In exchange for bringing in new customers, Amazon will be taking an unspecified percentage of the subscription revenue — Amazon has asked for 30 percent in similar arrangements in the past, Reuters reported. It also wasn’t clear from the announcement if Amazon’s cut of the revenue is fixed, or if there’s room for Condé to renegotiate more palatable terms in the future if the partnership thrives.

Sauerberg declined to go into specifics about the financial details of the deal.

“If I didn’t think the benefits outweighed the risks, I wouldn’t have done it. We have alignment in terms of what we’re trying to do,” he said, adding that the deal is not comparable to Condé’s other distribution agreements. “I can’t talk about terms and conditions. But I’m going into it with a long-term point of view,” he said.

Before Tuesday’s news, all publishers had some sort of arrangement with Amazon to be distributed via the Kindle Fire. For instance, all of Time Inc. is available on the device, but Amazon only processes digital-only subscriptions and single-copy sales while Time handles the print-digital bundles.

The difference now is that subscriptions to Condé magazines can be purchased or renewed directly through Amazon’s Web site. The first titles offered through the service are Vogue, Glamour, Bon Appétit, Lucky, Golf Digest, Vanity Fair and Wired, while the remaining brands will come online later this year. Already on Tuesday, some of the magazines were promoting low-price subscriptions, like $3 for a year’s subscription to Glamour, for a limited time. Doctor said other publishers may eventually come around to similar arrangements with Amazon, but they are more likely to move at their own pace to figure out what makes the most sense for them. Time and Hearst are sticking by their present strategy.

“With digital subs, our present priority at this time is to drive discrete subscriptions,” said John Loughlin, Hearst Magazines’ executive vice president, general manager.

“While we have great relationships with our digital partners, including Amazon, our all-access strategy is focused on having a direct connection with our consumers,” said a spokeswoman for Time.

load comments

ADD A COMMENT

Sign in using your Facebook or Twitter account, or simply type your comment below as a guest by entering your email and name. Your email address will not be shared. Please note that WWD reserves the right to remove profane, distasteful or otherwise inappropriate language.
News from WWD
Newsletters

Sign upSign up for WWD and FN newsletters to receive daily headlines, breaking news alerts and weekly industry wrap-ups.

LatestPublications
getIsArchiveOnly= hasAccess=false hasArchiveAccess=false