Thursday, October 15, 2009

The Economist Magazine Embraces the Kindle as a Revenue Generator

It pays to pay attention to those who command premium prices. In the weekly news magazine market, The Economist is by far the leader in actually getting their customers to pay.

Charlie Rose had Economist editor John Micklethwait on recently and he talked about their strategy for the Kindle. (Note: this is my transcription - not official)

Micklethwait: The interesting one to me is the Kindle. If you want an example of the difference between us and other magazines. If you look at the Kindle, we charge $10 per month. Virtually every other magazine charges $2 or $3 per month. And the reason why we charge that is because we have worked out that that is what we need to make money from it. Remember that you can't carry advertising at all on the Kindle, and what worries me a bit from the perspective of the other magazines is that they are all looking at the Kindle as a little bit of incremental business. We're looking at it as something which we think long term, it or its descendants or a derivative of it would replace a chunk of the print magazine.

Charlie: It has to stand alone.

Micklethwait: Yeah and you have to look at it as something that could eventually cannibalize your product. But ultimately I think that's exciting. I'm mean look we have distribute The Economist all the way around this country and all the way around the world. The idea that people with electronic e-readers could actually be getting this almost immediately on a Thursday evening or Friday morning - that's a very exciting idea.
Time and Newsweek are struggling and changing their strategies. The Economist seems to be thriving. I think that The Economist's forward-thinking and confident perspective on the future of publishing is a big reason for this strength.

Video here. The discussion about e-readers starts at about 16:50.

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