Consumer Marketing Survey Subscription Sales on the Internet and Digital Developments Study 2010 Actual 2011 Forecast

Transcription

1 Consumer Marketing Survey Subscription Sales on the Internet and Digital Developments Study 2010 Actual 2011 Forecast August, 2011

2 Consumer Marketing Print and Digital Subscription Sales The Association of Magazine Media distributed the survey in April 2011 with responses received from 20 companies reflecting the experiences of 104 titles (Outliers on some statistics were removed). Not all titles provided information for all questions information is based on final results. 2011estimates are based on four months of actual results. Participating Titles All You Food & Wine Motorcycle Classics Runner's World American Cowboy Food Network Muscle & Fitness Scientific American Arts And Crafts Homes Forbes Muscle & Fitness Hers Scientific American Mind Backpacker Fortune National Enquirer Seventeen Better Homes And Gardens Gas Engine Magazine National Geographic Kids Shape Black Belt Glamour National Geographic Little Kids Si Kids Bloomberg Businessweek Globe National Geographic Magazine Southern Living Capper's Golf National Geographic Traveler Spin To Win Rodeo Climbing Magazine Good Housekeeping Natural Health Sports Illustrated Coastal Living Gq Natural Home & Garden Star Cooking Light Grit New York Magazine Sunset Cosmopolitan Guideposts Newsweek Magazine The Herb Companion Country Living Harper's Bazaar Old House Interiors The New Yorker Country Weekly Health Old House Journal The Trail Rider Country's Best Cabins Horse & Rider Oprah This Old House Dressage Today Horse Journal Parents Timber Home Living Dwell House Beautiful People Time Entertainment Weekly Instyle People En Espanol Town & Country Equus Ladies Home Journal People Stylewatch Travel + Leisure Esquire Log Home Living Popular Mechanics Urban Climbing Magazine Essence Marie Claire Popular Science Utne Reader Family Circle Magazine Men's Fitness Practical Horseman Vegetarian Times Farm Collector Men's Health Prevention Veranda Fit Pregnancy Money Reader's Digest Vogue Fitness Magazine More Magazine Real Simple Women's Health Flex Mother Earth News Redbook Yoga Journal 2

3 Internet subscriptions represent one out of every five direct to publisher new business sales Internet sold orders were 12 of total gross orders sold in 2010 and are forecasted remain flat in 2011 By title, internet sold orders ranged from 1 to 50 of total orders in 2010; from 1 to 44 in 2011 Internet sold DTP new business orders were 20 of all DTP new business and are estimated to be 21 in 2011 By title, DTP new business orders sold online ranged from 3 to 67 in 2010 ; from 2 to 68 in of all renewals sold were sold on the internet ACTUAL 2010 ESTIMATE 2011 Orders (000s) Gross Internet Sold of Row Gross Off-line Sold of Row Total Total Gross Internet Sold of Row Gross Off-line Sold of Row Total Total New Business DTP 7, , , , , , Renewals DTP 1, , , , , , Total DTP 9, , , , , , Agents 3, , , , , , Grand Totals 13, , , , , ,

4 The internet has become the largest source of new business subscriptions for 20 of titles Largest New Biz Source of Titles Internet: 19 *Offline Source: 81 * Non-internet related DTP sold internet orders are expected to grow 6 in 2011 Growth in DTP volume offsets 10 reduction in internet agent sold subs DTP new business sales accounted for 59 of internet activity last year & growing 6 in 2011 Internet renewal subs are 12 of internet sold in both 2010 &2011 Agent orders represented 29 of internet orders in 2010 & is estimated to be 26 this year INTERNET SOLD Orders (000 s) 2010 Est /( - ) Change New Business DTP 7, , Renewals DTP 1, , Total DTP 9, , Agents 3, , (365) -10 Grand Totals 13, ,

5 New business online orders really are new As the internet has matured as a source of subs, the new orders has come more into line with other sources like agents or insert cards By title, the range of underlying renewals was 0-48 New Actual 2010: 88* Estimated 2011: 87* *Outlier titles removed Internet new business orders are primarily sold on publisher websites Publishers have focused extensively on internet sales from their own web pages: in of internet new business orders came from editorial sites, slightly decreasing to 49 this year subscriptions from internal and external lists generate 14 growing to 17 of new business orders Internal cross-sells and upsells are estimated to fall from 15 of production to 12 Search engine marketing is growing rapidly from 7 of subs in 2010 to 10 in 2011 Third party sites and affiliates represent 2 of subscription sales as does Co-Registration Internet DTP New Business Orders New Business Orders (000 s) /(-) Change Editorial websites 3, , (19) 0 - internal lists 1, , external third party lists Other internal - cross selling, upsells and offline to online 1, , (132) -12 Other direct to publisher third parties (i.e. partnerships/affiliates) Search Engine Marketing Co-Registration (88) -64 Other DTP Total 7, ,

6 Amazon and Magazines.com are the major internet agent sources despite reductions in usage Amazon is forecasted to lose almost twice the volume as Magazines.com from 2010 to 2011 The two largest agents are expected to produce near to identical volumes in 2011 Internet Agent New Business Orders New Business Orders (000 s) /(-) Change Amazon (269) -30 Magazines.com (136) -18 Other Agents 2, , Total 3, , (364) -10 The mix of on-line renewal channels is expected to remain stable By title the mix of renewal sources ranged from website sold also ranges from of the orders by title Other sources account for as much as 84 of the orders by title Internet Renewal Orders Renewal Orders Change Editorial websites Other Total

7 New business pay up rates are increasing across virtually all internet sources Only Other DTP third party efforts are estimated to have lower payment in 2011 Titles own efforts cross-sells and search engine marketing are the best paying DTP sources Third party list and Other DTP third parties are the worst paying sources. Magazines.com and other agent payment has improved about 10 points Internet New Business Pay up Rates* Gross Pay up Net Gross Net Pay up Editorial websites 3,997 2, ,627 1, internal lists 1, external third party lists Other internal - cross selling, upsells and offline to online 1, Other direct to publisher third parties (i.e. partnerships/affiliates) Search Engine Marketing Co-Registration Other DTP Amazon Magazines.com Other Agents 1,808 1, ,896 1, Total 11,085 7, ,449 6, *Volumes reflect only titles that reported payment 7

8 40 of the responding titles are using social media as a subscription source will be the first year with significant gross sub volumes The number of titles reporting social media sub sales in 2011 increased by 56 versus 2010 Social Media as a Subscription Source Social Media as a Subscription Source 2011 Survey Titles using Soc. Media 39 Act 2010 Gross Subs sold 16 Est 2011 Gross Subs Sold 148 Growth 2011 vs Facebook and Twitter are used by the most titles but Deal of the Day sites are growing Deal of the Day sites came into broad usage in 2011 with 37 of respondents using at least one Other Social Media used include YouTube and Group Commerce Social Media Outlets Used of Responding Titles Using Social Media Outlets Facebook Twitter Groupon 4 33 Living Social 1 31 Other Deal of the Day sites 5 19 Other Social Media 1 3 8

9 Three quarters of the titles are offering Digital Editions in 2011 In 2010 more than half offered digital editions for both subscriptions and single copy sales Three quarters of the respondents will have digital editions in 2011 Use of Digital Editions Digital Editions Change selling subs selling single copies Titles are offering subscriptions to digital editions through multiple channels Apple has shown the most growth in 2011 due to the introduction of subscription sales on the ipad Many titles listed other channels including Nook, Kindle and HP Subscription Channels for Digital Editions of Responding Titles Using Channel to Sell Subs Zinio Texterity 9 5 Apple 6 22 Android 3 13 Blackberry 1 10 Nook NA 26 Kobo 1 7 Other

10 Zinio and Apple are the channels used by most titles for single copy sales Most channels are growing significantly in single copy sale usage Other channels mentioned are Nook, Kindle and HP Single Copy Channels for Digital Editions of Responding Titles Using Channel to Sell Single Copies 2010* 2011* Zinio Texterity 9 4 Apple Android 3 7 Blackberry 1 4 Nook NA 25 Kobo 0 2 Other *Titles can use multiple channels Use of both replica and enhanced digital editions is growing In of titles offered replica editions, in produce them Enhanced editions were sold by 20 in 2010 increasing to 34 in 2011 Over a third of respondents had digital editions that were neither replicas or enhanced in 2010 Types of Digital Editions Offered of Responding Titles Using Channel to Sell Single Copies Replica Edition Enhanced Edition 5 6 Both Replica and Enhanced None of the above

11 Consumer marketing has complete or partial responsibility for audience development at a majority of surveyed titles. 70 are completely or partially responsible for generating and/ or tracking web traffic Responsibility is shared at the majority of titles Circulation Responsibility for Audience 2011 Survey Completely responsible: 7 Partially responsible: 63 Not at all responsible: 30 Website Traffic is growing 8 Almost 160 million monthly uniques came to respondents websites in 2010 On average about 2 million visited each title s site monthly Monthly Unique Visitors Change Avg. Visitors 1,942,505 2,104,504 8 Total Visitors 161,805, ,198,

12 Survey Summary Internet subscriptions represent one out of every five direct to publisher new business sales The internet has become the largest source of new business subscriptions for 20 of titles DTP sold internet orders are expected to grow 6 in 2011 and Agent sold internet orders decline by 10 New business pay up rates are increasing across virtually all internet sources 40 of the responding titles are using social media as a subscription source Facebook and Twitter are used by the most titles but Deal of the Day sites are growing Three quarters of the titles are offering Digital Editions in 2011 Zinio and Apple are the channels used by most titles for single copy sales Use of both replica and enhanced digital editions is growing with ¾ having replicas and over a third having enhanced editions in 2011 Titles are offering subscriptions to digital editions through multiple channels with Zinio, Apple and Nook used by most Consumer marketing has complete or partial responsibility for audience development at 70 of surveyed titles Website Traffic is growing 8 despite all the digital edition activity 12