Back in the spring of 2009, I wrote a column for minonline.com on why paid digital content had a bright future.
At the time, the general sentiment in media circles was that free or freemium, ad-supported models were the most sensible. I suggested that media brands that offered unique, differentiated experiences online coupled with frictionless, one-click payment systems could see meaningful growth. Amazon’s Kindle was already in the market, but the iPad was still a year away. Some 50 million tablets later, it’s hard to imagine just how much things have changed in such a relatively short period of time.
So it was with great irony that one night last week, I downloaded New York Times columnist Thomas Friedman’s latest book, That Used to Be Us: How America Fell Behind in the World It Invented and How We Can Come Back (Farrar, Straus and Giroux). If you haven’t read it, it is worth every cent of the $12.99 download price. In classic Friedman fashion, he and his co-author, Michael Mandelbaum, make the big, game-changing ideas simple and compelling. While he is mostly speaking about the challenges facing America today, I was repeatedly struck by how comments like this—on how our country responded to the end of the Cold War—were entirely relevant to all businesses including media:
It is very possible that in the year ahead, our country may go through another national election cycle with politics-as-usual. But in the media industry, business-as-usual is a thing of the past. Our “constituents” vote every day, often multiple times a day. Already, eBooks represent more than 50% of Amazon’s book sales and nearly 20% of major publisher sales come from e-formats.
Despite the early-on hand wringing change often brings—including the recent concern whether offering subscriptions via Apple would make sense for publishers—early evidence suggests that digital sales via Apple, Amazon and Barnes & Noble represent growth opportunities more than cannibalization. Perhaps equally as encouraging is the fact that the same well-established brands that seemed to be most vulnerable are actually positioned to do quite well because of their trusted connection with consumers. In fact, not only is my flagship brand Reader’s Digest currently the top-selling magazine on the Kindle, but total digital edition sales now exceed 25% of its monthly magazine newsstand sales.
Even as I write this, my first column on paid digital content seems so much farther in the past than just two years ago. The difference today is that the future is now. While there are still many changes to navigate in the months and years ahead, it’s clear that after some early blows, the media business continues to adapt, evolve and represent one of the great innovation engines in America today.
Dan Lagani is president, Reader’s Digest North America.