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Reports Say Interactive Magazines Could Bring In As Much As $3 Billion

A recent assessment of consumer demand for interactive periodicals showed some interesting news for the future of digital magazines and other publications for devices like the iPad. Using “Future Marketplace Simulation,” consulting firm Oliver Wyman projected $3 billion in potential revenue for the U.S. magazine and newspaper industry by 2014. After an assessment of the impact by “the potential cannibalization of some print subscriptions,” the industry stands to see $1.3 billion in incremental revenue.

Folio: breaks down the report’s key findings:

1. Among device-owning subscribers, the availability of interactive editions at the point of renewal, at the same price as today’s print editions, drives a 9-point increase in the overall subscription renewal rate, from today’s 55 percent industry average to 64 percent.

2. Many subscribers perceive print and interactive formats to be complementary; 30 percent of renewing subscribers choose a bundled print and interactive edition, at a 33 percent premium to the stand-alone price of either.

3. The interactive format enables effective cross-selling via recommendation engines and browsing features; 17 percent of current subscribers make additional purchases.

4. Automatic renewals eliminate the traditional “bill-me later” model and greatly reduce churn, from an average of 45 percent today to 25 percent.

5. The introduction of interactive editions in an online store setting, at the same price as today’s print editions, triples uptake rates among device-owning non-subscribers, from 5 percent to 15 percent.

The report recommends that interactive publications take steps like creating new interactive products and develop innovative subscription packages as means of drawing in consumers and advertisers alike.

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