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Consortium to Give Maghound Bite?

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A consortium Time Inc. is trying to assemble for the industry to sell digital editions of magazines could provide a fix for Maghound, the company’s flagging online magazine subscription service.

Time Inc. launched the Netflix-like service a little over a year ago as a new way to sell Time Inc.’s and rival publishing houses’ titles. But the service has struggled to grow subscription sales and attract participation of non-Time Inc. publishers.

In addition to a reluctance to hand over their subscription sales to Time Inc., a few publishers have questioned the Maghound model. While some publishers are focused on developing ongoing contact with the consumer, Maghound members can change which titles they’re getting at any time.

As of now, the site lists 317 available titles, far short of what a rival company circulation executive said the goal is. Meredith and Hearst are selling a number of their titles on Maghound, but notably, Condé Nast and Wenner Media have declined to get on board, meaning popular titles like Us Weekly and Vanity Fair are missing from the site.

“They need a thousand” titles, said the exec. “They’re working hard to do whatever they can do to get more.” (Time Inc. wouldn’t confirm the number of titles it is targeting for the service.)
Maghound also continues to produce very small subscription sales volumes for titles, said one circ exec at a participating publishing company who spoke on condition of anonymity.

Part of the reason could be that Time Inc. has put off plans to step up its promotion of
Maghound to prospective readers while it focuses on building the e-reader consortium.

Time Inc. acknowledged that it was looking at alternative models for Maghound but wouldn’t elaborate on what that might include. “We’re considering a number of options,” a company representative said.

Scenarios that are said to be under consideration include spinning Maghound off into a non-Time Inc. entity or incorporating it into Time Inc.’s proposed e-reader consortium that’s intended to manage the sales of magazines’ e-reader versions.

Time Inc. isn’t talking publicly about the e-reader consortium, but sources close to it say its development is moving quickly. Condé Nast, Hearst and Meredith are expected to join with Time Inc. to back a new company run by Time Inc. executive vp John Squires, who has been spearheading the effort.

Folding Maghound into an independent entity might help bring around publishers who are reluctant to give up so much of their subscription sales to Time Inc., which already dominates magazine industry subscription sales through its subsidiary company, Synapse.

“They’re trying to find a formula that would make everyone comfortable,” said a source familiar with the process. “Nobody is happy with Time Inc. controlling so much of their destiny.”