The end of Newsstand subscriptions

Amazon has decided to withdraw the ability to subscribe to magazines and newspapers through the Kindle platform, and appears to be promoting Kindle Unlimited as the alternative approach instead.

Business News

As someone with a good understanding of both the tech and the publishing worlds, I think this represents a threat (and maybe some opportunities) to the publishing world as Amazon tries to commodify the written word.

Now that I’ve set the scene, you should probably take a read of Amazon’s announcement. It’s detailed, but it’s really aimed at consumers. But tucked away in there, is a very important statement:

…you can explore alternate subscription options provided by the publishers by visiting Your Memberships and Subscriptions page. Alternatively, you can visit publisher websites for additional subscription options. Selected digital magazine subscriptions are also available in Kindle Unlimited.

It’s been on my mind for a while that Kindle Unlimited is Amazon’s attempt to create a Spotify-like service for books. Musicians have long grappled with this issue – unless they’re a massive act, the royalties they earn from Spotify are barely noteworthy.

This is a significant challenge and threat for publishers where the options to upsell may well be more limited. Not that many people will pay to see their favourite columnist live. Certainly not in Taylor Swift numbers.

The Kindle Unlimited Business Model

I’m still trying to tease out the exact numbers that newspaper and magazine publishers receive from being on Kindle Unlimited, and what sort of transparency there is, but essentially it would seem that it’s a share of an amount of revenue that is allocated by Amazon into what is known as the Kindle Select Global Fund.

A writer called Daniel Tortora runs a page about the revenues for book authors, and I suspect the numbers won’t be wildly dissimilar for periodical publishers. This extract is useful information:

The author payout to US authors has ranged from roughly $0.0040 to $0.0050 per page read, or $0.40 to $0.50 per 100 pages read. Over time, the KDP Select author payout has averaged about $0.45 per 100 pages read.

There’s a lot more besides this on Daniel’s page which is worth a read.

In essence though, Kindle Unlimited is to the written word what Spotify is to music. And that, dear publisher, isn’t necessarily a good thing. And you might be about to lose control to a US tech giant that will grind every margin. And not only that, Amazon adores exclusivity in their deals.

What does that mean for a magazine with the equivalent of about 100 pages? Well, a cover to cover reading will, I estimate, generate about 45p. Do correct me if you know otherwise.

This begs the question: do you make 45p from a print sale? A digital subscription?

The Problem Amazon Seeks to Solve

Kindle Unlimited is super convenient. And chances are that your subscription system… isn’t. I don’t know why, but one thing I’ve struggled with is to encourage digital publishers to absolutely simplify their subscription journeys, to de-risk taking on a subscription by having short terms (weekly or monthly!) and to make it super easy to cancel. Or just buy access for a short period of time. Economically. Why is it so much easier for me to try a full on and complex server environment for my web apps but so tricky to pay to read a few articles I’m interested in?

One of my favourite publications, but not one I subscribe to, is New Scientist. Here’s their subscription page:

Ultimately, I like New Scientist but I’m a four times a year kind of buyer. I have an interest in some subjects they talk about. Sometimes. When I have spare time. I don’t have £117’s worth of interest, however. But I don’t see a paper newsstand every day so it’d be nice to dip in and out.

I know why a magazine would want a subscriber. It’s a nice and steady revenue stream. But it fails to address a key market segment. People who are dipping in and out.

If the New Scientist becomes available on Kindle Unlimited, I can spend a flat £7.99 a month. Easy! But that 45p revenue share is miserable. Worse is, in reality, I’ll read about twenty articles a year. So the revenue from me would be maybe 12p or so. Meh. Magazines of quality can’t survive on that. It means that the Kindle Unlimited space is really best suited to low production cost, low value publishing. In depth, heavily featured content can’t survive at those prices.

Our Suggested Answer

Simplicity. Efficiency. Readability. User focus. Profit margins.

We’ve put a lot of effort into developing a new CMS which has built in tools specifically for periodical publishing, and a partner app that runs alongside it. The CMS has been used to publish Kindle editions by The Spectator and New Statesman. It’s fast, easy to use, and multi-tenanted, and portfolio capable. The screenshot below shows it in use for building The Spectator’s Kindle.

And this is where I announce the partner app for this tool. Standfirst Reader – a place where you can manage your digital content subscriptions, read them easily, and, most importantly, know that the bulk of your subscription is going straight to the publication you’ve subscribed to. Our intention is to complete the development to support a smooth subscription flow for our publishers. We can also add integrations to your subscription providers if you wish to make it a part of your general offering.

Ultimately, we feel that there’s no need for 30%-70% margins on this sort of thing that tech giants are trying to make. If we could get ten good magazines on this, we could run at 15% margin to help fund the ongoing development and maintenance of the platform.

In testing we tried out some Spectator content on Reader so you can have some screenshots as an example.

As you can see – it’s presented as a simple app, designed to remove complexities. It’s designed to give a very fast, easy UI for the reader to work with. Subscriptions are centrally managed, and specific just to this app, and you can allow people to buy a single issue at a time if they desire – perhaps for a holiday or a long trip. Content can be automatically pulled in from your CMS feeds, or you can create it directly in our CMS. Everything, everywhere, is made as easy and streamlined as possible. People will also be able to subscribe separately online to help reduce App Store type fees.

We’re looking for a handful of quality publishers, based in the UK, to express an interest in joining this program. Could you lead the way to a fair and consumer friendly content promotion system?

Register your interest in Standfirst for Periodicals

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