Time Inc. Launches New Tablet Strategy

Apple subscriptions deal still eludes company, though

Time Inc. is making it easier for readers to access its magazines in digital form. The company announced Wednesday that it will make all 21 of its U.S. titles available on the iPad and other tablets by the end of the year. But consumers still won’t be able to buy subscriptions through a key sales channel, Apple’s iTunes store.

The publisher said it's expanding its “all-access” model already in place at Time and Sports Illustrated that lets people buy print-digital bundles as well as digital-only subscriptions and single issues. Time Inc. already distributes its titles in the HP TouchPad, Android, and Next Issue Media stores, and as part of today's announcement said it would start to sell digital editions on Barnes & Noble’s Nook Color.

The announcement was made by Maurice Edelson and may be his first public statement since he was appointed, along with Howard Averill and John Huey, to run the company after Jack Griffin was fired as CEO in February. Edelson, who has been overseeing strategy and meeting with Apple to work on iPad subscription sales, called the news a "bold commitment" to offering content in the burgeoning tablet market.  

Other major publishers, including Hearst and Condé Nast, have acquiesced to Apple, which takes a 30 percent cut of revenue from sales through iTunes and controls the consumer relationship in order to offer subscriptions through its store. But Time Inc. seems to have foregone that strategy in order to maintain control over its subscriber data. Outside iTunes, Time Inc. also has more flexibility to try out different sales tactics to cross-sell and upsell its titles.

Publishers have been eager to make their titles available in as many tablet sales channels as possible as consumers migrate, however slowly, to those platforms. Though Time Inc. has been giving up revenue it would get from selling subscriptions through iTunes, letting print subscribers add the digital edition for free gives people a reason to keep buying the print edition, thus protecting its core business.  

As Vivek Shah, a former Time Inc. digital executive who’s now CEO of Ziff Davis, put it, “Maintaining the print rate base is an absolute goal in that exercise. It’s the magazine equivalent of TV Everywhere.”

There are potential issues to the all-access approach, though. As print subscribers add the digital edition, advertisers may ask if readers will start to bypass the print edition, diluting the value of the ads inside.

A Time Inc. rep said the title's ad rates would continue to be based on print-only rate bases, although it was working with the Audit Bureau of Circulations and advertisers on best practices.

Earlier this week, Condé Nast announced that it had sold 242,000 digital editions on the iPad. Time Inc. also said it was making money from its digital copies, with more than 600,000 digital single copies of People, Time, Sports Illustrated, and Fortune sold so far. Including print subscribers who upgraded to get digital editions for free, the company said its digital magazines and content apps have been downloaded 11 million times.

The company didn’t provide a title-by-title breakdown, and it continues to hold back on releasing details on digital readership that advertisers have clamored for. It promised to report digital sales and subscriber information to the Audit Bureau of Circulations starting in January, though.