By forcing magazine and newspapers to access iPhone and iPad users via its app store, Apple’s (NASDAQ:AAPL) message to the publishing world has been clear clear: The iPad and iPhone are your future, so learn to play by our rules.
However, Apple may need to change its attitude if it wants its portable devices to be where that business lives in the future — the iPad may need magazines a whole lot more than magazines need the iPad.
Jann Wenner, the publisher behind Rolling Stone, Us Weekly, and Men’s Journal, spoke with Ad Age recently and struck out at not just publishers’ mad dash toward the iPad, but web-based formats in general. He said publishers are “crazy” to pursue the platform — first, because of the cost to develop an interactive publication like Apple’s The Daily venture with News Corp. (NYSE:NWS), but also due to the low sales of “5000 copies there, 3000 copies here.”
Interviewer Nat Ives even pointed to Bonnier Group’s Popular Science as having only grown an iPad subscriber base of 16,000 readers compared to that magazine’s 1.2 million print subscribers.
While Wenner’s history with web versions of his publications certainly tempers his viewpoint — Rolling Stone has been notorious for failing to make a popular transition online over the past fifteen years –his point is well taken. While the lower cost of iPad and e-reader publication seems like a promising alternative to publishers losing money on printing and mailing costs as advertising revenue falls, there’s simply no evidence of a promising readership yet.
It isn’t just the iPad either, but all connected portable electronics. A New York Times report published last month highlighted the success of magazines targeted toward women on Barnes & Noble‘s (NYSE:BKS) Nook Color e-reader device. The report highlighted the fact that publications like O, The Oprah Magazine, Women’s Health, and Everyday With Rachel Ray top the Nook best-seller list. Liz Schimel of Meredith told the Times that Nook editions of her imprint’s magazines like Better Homes and Gardens were outselling iPad editions by 2 to 1.
Still, only about1.5 million magazine subscriptions and single issues have been sold on the Nook Color since November, according to Barnes & Noble. Better Homes and Gardens’ circulation alone is around 7.5 million for each issue according to the Audit Bureau or Circulations.
There are 25 million iPads in consumer hands, which translates into a monumental amount of money for Apple — and potential money for media businesses contending with a declining market for physical reading material. The electronic magazine and newspaper business, however, demonstrates that some media aren’t going to stop relying on physical sales for the bulk of their income just yet. The iPad wants to be the place where everything’s happening, but right now magazine publishers should be pouring their efforts into other ventures.
As of this writing, Anthony John Agnello did not own a position in any of the stocks named here. Follow him on Twitter at @ajohnagnello and become a fan of InvestorPlace on Facebook.
