Condé Nast Inks Big Deal With Amazon

Condé Nast has announced a big deal with Amazon that will let people buy and renew print and digital subscriptions to its magazines on the e-commerce giant. The new service, which Amazon is billing as the first of its kind with a publisher, also enables customers to get immediate access to their digital subscriptions on various devices including Amazon’s own Kindle Fire, the iPad, and Android tablets and phones. Not all brands will be immediately available although Condé Nast is kicking off the service with a handful of its titles that are the biggest in circulation or are digitally driven. They are Vogue, Glamour, Bon Appétit, Lucky, Golf Digest, Vanity Fair and Wired. The company’s other titles, which include The New Yorker, Allure and GQ, are expected to be brought on later in the year. The so-called “All-Access” plan speaks to the need for publishers to adapt as people are increasingly shifting their reading to digital formats and the increasing role of digital giants in delivering that content. At the same time, digital platforms have discovered the need for content; Amazon founder Jeff Bezos' purchase of The Washington Post invited speculation that Amazon would plug the newspaper's content into its reading devices. Magazines remain primarily a print proposition, though, and Condé Nast sees print as the primary beneficiary of the Amazon deal. As of the first half of this year, digital circulation made up just 3.3 percent of total circulation, according to the Alliance for Audited Media (formerly the Audit Bureau of Circulations). With Amazon, Condé Nast will be able to tap into millions of potential new customers through the e-tailing giant's vast user base. "We want to expand the volume of people that Condé Nast has relationships with and the engagement we have with them," Bob Sauerberg, president of Condé Nast, said in an interview. "So we're transitioning our company from selling print to selling access to our products on a variety of platforms. This announcement is integral to that." The Amazon deal also helps Condé Nast iron out the subscription process, which, in its existing forms, has been rife with stumbling blocks to purchase. Even on Condé Nast's sites, subscribing involves filling out an online form. Readers can continue to subscribe via those sites. But now, existing Amazon customers can order a new magazine with one click, and orders are automatically renewed unless the customer actively stops it. That ease of purchase is part of the appeal of Apple's iTunes store, too, although the big difference is that while iTunes is a digital store, Amazon is handling Condé Nast's print subscription orders as well as digital. "The order entry process is cumbersome," Sauerberg said of existing subscription methods. "The renewal process is cumbersome. This simplifies all that." Another obvious potential benefit to working with Amazon is its vast distribution network. While Sauerberg stressed that today's announcement was about reaching more customers and making it easy for them to buy magazines, he indicated that the two companies would be working to cut the time it takes new subscribers to get their first issue. He said Condé Nast also planned to use Amazon's platform to add the ability to gift subscriptions. The hunt for new readers comes as publishers are pushing the circulation revenue lever with increasing urgency to offset sagging ad revenue. In addition to selling subscriptions through Amazon, Condé Nast also has been quietly pushing up its cover and subscription prices to get away from the rock-bottom subscription prices that have for years been standard practice among publishers. (To entice people to subscribe to its titles via the new Amazon deal, however, the publisher is offering its titles at an introductory deal of six months for $6 or less.) The shift by publishers to adapt their content to digital platforms has been an awkward one. Selling their titles via iTunes meant ceding control over subscriber information and giving 30 percent of the revenue to Apple. The top magazine publishers tried to take matters into their own hands by creating their own one-stop-shop, Next Issue Media, that would let them control their pricing and subscription information destiny. But the titles’ exposure was limited, and hardly anyone talks about the venture these days. "Because of the dominant place of companies like Amazon and Apple, publishers are finding themselves having to acquiesce," pointed out Ken Doctor, publishing analyst at Outsell. The digital giants offer access to huge customer bases and ease of payment, and they own the devices that the content is being read on, he said. The early issues that dogged publishers have somewhat disappeared. Publishers have grudgingly accepted Apple's 30 percent cut of each sale, and they've been relieved to find that when asked, customers willingly provide their contact information—data that publishers consider critical to upselling and cross-selling them other products. Sauerberg put a positive spin on the deal, saying that Condé Nast is getting the same subscriber info—name, address and email—from Amazon that it would get if the customer came directly through the publisher. He declined to get into detail about other information the publisher may be getting but said data access was no longer a stumbling block. "Apple's our friend; Amazon's our friend. We get what we need, which was important to be able to execute against All-Access," Sauerberg said. How the Amazon deal will affect pricing is another matter, though. Sauerberg wouldn't discuss details of the arrangement although in other deals, Amazon has taken 30 percent. He said Condé Nast would also continue to set the prices of its magazines. But Amazon's history as a lowest-cost retailer, particularly with the book publishing industry, offers a cautionary tale for publishers when they're trying to move the needle in the opposite direction. "They can essentially say, 'Magazines are X [price],'" Doctor said. "You might lose pricing power."

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Condé Nast Inks Big Deal With Amazon

Offers 'All-Access' to digital subscriptions

Lucia Moses

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