Interaction with Revenue: A New Digital Future for Publishers

Given the rise of social media and socially mediated everything-from sales to customer communication-it might seem rather obvious that content consumers want to interact with information and those who produce it. However, as an old school content producer who still produces print publications, I am painfully aware of a "digital divide" that exists between the way we conceive of content for print and the way it wants to be consumed digitally.

When I write a column such as this one, I think of my reader seeing it 6 weeks or a month later, so it needs "legs" to make the long haul to the reader and to remain relevant. This reader is possibly sitting on a train or at a desk, passively pondering my prose. Perhaps something I say will inspire a conversation with a co-worker or even provoke an email sent later in the day. More than likely, however, the column will be read and recycled. The pleasure of seeing my words in print, and knowing their potential to reach thousands of readers, was once largely the measure of my success as a writer.

When I write a blog post, however, I am aware that time is of the essence-that whatever I say needs to be relevant right now. Certainly, one would like to think that these posts become part of the permanent web record that will inform for decades to come. However, I'm acutely aware that the purpose of a post is its immediacy and potential for interaction. With blog posts, I hope for links, trackbacks, referrals, and references. This drives traffic. I hope for reader comments and real-time commentary. Perhaps there are those calculating success by click-throughs. But I know that this is not a good way to calculate impact. Ultimately-as a writer-I may still create content at my lonely keyboard, but today I long for interaction as a measure of my merit.

Today, interaction is more than a way to calculate whether one's ideas attract readers and stimulate discussion, however. Interaction is the basis on which to build business models.

A recent study forecasts $3 billion in subscription revenue from interactive periodicals by 2014. The study, "A New Digital Future for Publishers?" was funded by Next Issue Media, which is an independent media consortium formed by Condé Nast, Hearst Corp., Meredith, News Corp., and Time, Inc. "to explore and shape the boundless opportunities for publishers, advertisers and consumers in the emerging environment of digital publishing and e-reading devices." Conducted by Oliver Wyman, the report indicates that after accounting for potential cannibalization of some print subscriptions, the industry could realize $1.3 billion in incremental revenue alone.

To date, paid digital distribution models newspapers and magazines have not done well, which most attribute to the vast array of free alternatives available online. Even prominent brands that have produced digital replicas of publications (PDF or otherwise) haven't seen significant revenue generation.

The report suggests that we are at the cusp of a new opportunity-given the sudden influx of affordable digital reading devices, as well as the market saturation of netbooks and smartphones. While the report cites the unprecedented popularity of the iPad, it also recognizes the fact that consumers, particularly younger ones, are quite comfortable paying for digital content delivered via their phones.

The report urges media producers not to make the same mistakes they have in the past and to move quickly to develop business models and digital product lines that leverage what interactive publishing has to offer by combining "the best of the print and online worlds: the immersive experience of today's magazines, coupled with higher-quality enhanced content ... as well as exciting new ways to engage with content ... to access additional information related to an article, clipping articles and saving issues to an online library, posting articles to social networking sites, and interacting with other readers."

The report is based upon a study with 1,800 respondents into future consumer buying behavior and willingness to pay for interactive periodicals. Wyman's Future Marketplace Simulation demonstrated the likely formats and features of emerging interactive periodicals and simulated actual purchase and consumption decisions. It found that print subscribers will not only pay the same rates for truly interactive digital reading experiences but that many are willing to pay a premium for interactive digital/print bundles. Additionally, introducing interactive editions at the same prices as today's print subscriptions triples update rates among "device-owning non-subscribers."

The challenge, of course, will be quickly mastering and modeling compelling interactive digital magazines. This will not only require understanding the socially mediated user experience but also transforming content creation conception and workflows so that the products become uniquely immersive experiences that justify-and capitalize on-this interactive opportunity.