UPDATED 07:08 EDT / APRIL 18 2011

Publishers Return to Freemium Models, Even as Apple Raises Fees

When every player in the online publishing industry is desperately hanging on to apps as a revival distribution method, Conde Nast decided that Wired would go free for 30 days, under Adobe’s sponsorship, another company with hinging hopes on the mobile sector.

Wired’s mobile take on interactive print media had an early start.  In May 2010, when Wired’s first app edition came out, it encompassed social media features, such as sharing it on platforms like as Facebook and Twitter, and an e-commerce partnership with Amazon, where readers can purchase items the magazine writes about via the online store, but without leaving the magazine app itself.

One year after its release, Wired is now counting between 20,000 and 30,000 downloads in comparison with 100,000 it had on the first issue.  It, like other surprised publishers, found decreasing subscription numbers after the initial wow-factor of digital editions wore off.  Wired publisher Howard Mittman is very confident in Wired’s ability to generate more profits from advertising with the free edition than it did one year ago at a cost of $3.99 as an in-app purchase.

But Wired isn’t the first publication to rethink digital subscription costs. Last month, the 4th issue of the Project publication was made free for download as an in-app purchase under the sponsorship of American Express, for a second time, indicating a lack of synergy between the online publication and the iPad. Why aren’t customers willing to pay for these online magazines? One possible answer might be that customers are not convinced that the iPad edition is more worth than the printed edition.

Technological innovations and the apparition of mobile devices such as the iPad, Kindle or Nook, are transforming the publishing business a full 180 degrees.  The popularity of e-books and online editions and newspapers and magazines is rapidly increasing along with the availability of mobile devices. One famous bookstore went bankrupt, making publishers dependent on companies such as Apple, Amazon or even Barnes & Noble.  Apple knows that, and is playing hard to get.  After increasing its commission for each new subscriber to 33%, Apple is now refusing to offer any more information on subscribers, an extremely valuable marketing tool for publications.


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