Magazines in the Amazon: What to Expect from Amazon’s Newsstand & Subscription Business

The world’s largest bookseller recently made two moves that could open new opportunities for magazine publishers, so it’s a good time to consider what’s afoot in the Amazon. It was recently revealed that TNG, the U.S.’s largest newsstand distributor, has a deal to supply magazines to Amazon’s rapidly growing chain of bookstores. That’s a switch from Amazon’s web site, which doesn’t really have a home for single-copy magazines. Five of the six Amazon Books stores were opened in the past eight months, and another six are close to opening. Some reports indicate the cybershopping giant plans eventually to have several hundred books-and-electronics stores in the U.S. And just two weeks ago, Amazon announced its Subscribe with Amazon marketplace that will supposedly harness the power of Amazon’s recommendation engine and customer data to help companies sell digital subscriptions. Here is Amazon’s pitch to publishers and other subscription sellers: "Subscribe with Amazon is a self-service solution that allows you to make your digital subscription purchasable to millions of highly qualified shoppers who trust Amazon to be their primary shopping destination." No doubt, some optimists will herald these developments as representing a renaissance for magazines, while our friends in book publishing will be inclined to warn us about an invasion of the Evil Empire. But Amazon’s history suggests it has no grand scheme for the magazine industry, either to rejuvenate it or to destroy it. It is prone to experimenting, failing fast, learning from its failures, and moving on. We publishers can also learn from Amazon’s experiments and from trying to view the magazine-media business from Amazon’s perspective: Selling magazines can be successful for Amazon even if it only breaks even on them: The company is a master at using customers’ purchase and search data to determine what other products to pitch to them – and, increasingly, to sell ads to third parties. The smartphone-based checkout system in Amazon’s brick-and-mortar stores ensures that it can link every purchase to the buyer’s Amazon account. What better way to learn about someone’s interests and what they might buy than to track what magazines they like? Limited selection, high visibility: Amazon Books stores have a much smaller selection of books than, say, the typical Barnes & Noble partly because every book is shown with its cover rather than its spine facing out. That may reflect Amazon’s obsession with creating a better customer experience, or it may just be an experiment. In any case, Amazon Books is merchandising magazines the same way: A recent Business Insider photo showed a magazine section with exactly 96 neatly arranged titles, each showing the entire front cover. You might have noticed in other stores that the typical magazine section is a bit more cluttered these days, as shown in this recent photo from a Rite Aid. [caption id="attachment_22617" align="aligncenter" width="550"] Partially covered magazines at a Rite Aid newsstand[/caption] Data-driven inventory: In the traditional newsstand system, it’s common for the same title to sell out consistently in one store that gets five copies but hardly sell any of the 10 copies distributed to another store. Matching distribution to sales history has been an uphill battle for the newsstand ecosystem. You can bet Amazon/TNG will operate far more efficiently. Amazon may use its real-time sales data and rapid-shipping prowess, or even its print-on-demand capabilities, to restock stores with hot-selling issues. Not all magazine sales are equal, from Amazon’s perspective. A sale of Bowhunter reveals far more about a customer’s interests than one of Sports Illustrated. Ads and promotions can be targeted better to someone who buys a Better Homes & Gardens bookazine than one who buys the actual BH&G As its data about magazine buyers grows, don’t be surprised to see Amazon offering some titles at a discount or otherwise showing a preference for certain niche titles over the big sellers. Amazon doesn’t see much potential in “print under glass” digital publications. Though it dominates the selling of ebooks, Amazon’s Kindle software is notoriously unsuited to “fixed-layout” books – the kind containing photos or graphics that can’t be easily “reflowed” for small screens. So don’t expect Amazon to make much of a push to sell Kindle-edition magazines. But at least Subscribe with Amazon may offer publishers a user-friendly format for marketing our own magazines. “Digital subscriptions” doesn’t necessarily mean “digital publications.” News coverage of the Subscribe with Amazon announcement focused on magazines and newspapers. But the marketplace is actually intended for a much wider variety of apps, web sites, services, software, etc. – in short, just about any kind of digital subscription that a company can host. For publishers, perhaps Subscribe with Amazon will not be so much about selling magazines as it a pathway to monetizing such “non-magazine” offerings as premium web sites, online courses, newsletters, downloadable data, archives, etc. Amazon seems to be bringing new thinking to the magazine-media business. Will those of us who make our living in this industry do the same?

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Magazines in the Amazon: What to Expect from Amazon’s Newsstand & Subscription Business

D. Eadward Tree

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