Lessons from The Atlantic and the Columbus Dispatch

A story of success and a story of failure. The Atlantic posts profit in the fourth quarter of 2010, the first time in decades. Its online traffic grew 34% with a monthly average of 5 million unique visitors. The turn-around is attributed to

1. Creating a solid brand identity
2. A digital-first strategy
3. Building a marketing services operation
4. Expanding live events; and
5. Maintaining a relentless focus on hiring top talent.

Stop Thinking Like a Portal is the hard lesson the Columbus Dispatch newspaper in Ohio should learn from its poor handling of the homeless golden voice video that was shot by its reporter and went viral on YouTube thanks to a reader.

Few publishers …  seem to have really embraced the idea that content can’t be bottled up and locked behind walls any more, and that there is more to be gained by letting it be shared than there is to be lost.

Review of Zinio

In a previous post I praised the "iTunes for magazine," an online newsstand planned by a group of magazine publishers including Time Inc. and Condé Nast. Then I got an email from Zinio and learned that Zinio has already developed such a newsstand that is selling more than 50,000 digital magazines and books in 15 languages. I was really intrigued why the other group is reinventing the wheel. So I did a little digging on Zinio and talked to its Global EVP and CMO, Jeanniey Mullen.

A private company established in 2001, Zinio, according to the San Francisco Chronicle, has about 5 million active customers and powers Barnes & Noble's electronic magazine sales and e-book previews. The business model of the company is to take a percentage of the revenue from magazine sales, Mullen said. But Zinio is not making money yet, according to Globe and Mail.

Zinio is pursuing a "unity" platform that will allow its readers, with no extra cost, to enjoy their digital magazines on any existing and future device, be it computer, smart phone, tablet, or TV with Internet access. To read their magazines on computers and enjoy the full print-link glory and feel, readers are recommended to download Zinio's free reader software. They can also bookmark, take notes, print any magazine page or share a copy with a friend. To read their magazines on smart phones, the readers need to download an app and the iPhone app was released earlier this month.

I downloaded Zinio's reader software, purchased a few free magazines, and read them on my computer. The process is rather simple and pleasant. Zinio's reader software is quite similar to FLYP, another gorgeous digital magazine reader, and the New York Times Reader. But the latter two are built for a single publication. I don't want to spend so much time and storage space on single-use softwares. I would much prefer a more universal magazine reader like Zinio's.

I really like the Unity platform. I can imagine myself flipping through the beautiful pages on my computer, reading bookmarked articles on my smart phone while commuting on bus or waiting in the dentist's office, or showing saved videos from magazines on an Internet TV to guests in my living room.

If Zinio is already serve as "iTunes for magazines," why does another group of magazines, some of them are Zinio's customers, want to start another platform? Zinio's Mullen didn't answer. My guess is that some magazine publishers do not like the Unity platform since it limits the publishers' ability to have different price and access models for different devices. Even though publishers have an alternative choice to use Zinio's "private-labeled newsstands" service to create their own web front (e.g. Four Points) while using Zinio's technology only as a power engine under the hood, the cost may be too high, or the design possibility offered by the power engine may still be too limited for a magazine publisher. It's a power struggle between content providers and distributors. In the off-line world, the struggle often leads to vertical integration of the whole publishing process. We'll see how the struggle plays out in the online world. The same struggle happens in the newspaper industry as well, with NewspaperDirect trying to be the "iTunes for newspapers."

The magazine industry is experiencing the crushing impact of advertisers' migration from print to online. American magazines lost a quarter of its ad pages between 2008 and 2009. One forecast says that in 2012, the industry's ad revenue will shrink 28% from its peak in 2007. Readers are migrating online too. According to the San Francisco Chronicle, from 2005 to 2007, the number of digital publication subscribers grew from 5.2 million to 13.4 million. So the industry is in a hurry to catch up with advertisers and readers, and to come up with a new business model. Will Zinio succeed? Will "iTunes for magazines" succeed? It's hard to say. But the common external threat may force them to join forces to survive. I won't be surprised if Zinio ends up with being acquired by an alliance of publishers for its technology and customer base.