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Why digital publishing aggregators are BAD for publishers

Recently I visited a client at their request and their opening remark was “You’re going to tell me how you can digitise my content online and in an app and you’re going to do it for free, because I’m not paying for it.”

As a premium digital services provider, that’s a tough call – even if we wanted to do revenue share, which we don’t, and let me explain why.

aggregator

Firstly, digital publishing is in it’s infancy. I don’t mean that the tools and techniques are not maturing, but the business model; advertising vs subscription – the whole print to digital transition is still being worked at on a lot of different levels. So immediately by going with an aggregator, you are betting on the subscription model. And by subscription I mean the subscription price, less the walled garden cut, then less the aggregators cut. You are lucky if you end up with 35% of the advertised price – and this is if your aggregator sells your subscriptions individually. The next iteration is no doubt, the ‘Netflix of magazines’ where subscribers pay a single monthly fee to access as much magazine content as they want.

Now at this point it is sounding pretty good for the consumer right? All the magazines I can consume for one (low) monthly fee! For the publisher on the other hand, your subscription revenue just got watered down even more. And here’s the problem. As a consumer, why would I pay a subscription to you the publisher when I can pay less than the cost of your subscription and get access to hundreds if not thousands of magazines? A great way to cannibalize your subscriber base, even if your aggregator offers you exposure to MILLIONS of new potential subscribers (I use the term subscriber loosely here at this point).

But let’s take a look at how your aggregator promotes your brand to those millions of new subscribers. Guess what, they are not promoting your brand, they are promoting theirs – your title is just in there somewhere amongst thousands of others. UNLESS your brand is well known, in which case they will definitely promote your brand – but – you guessed it; to promote their product! Sweet deal for the aggregator – you give them your content for free, they use your brand to promote theirs and they take a healthy cut. This is a win-win-win-lose situation. Consumer-appstore-aggregator-publisher.

I’m not sure how reporting is done on the Netflix model, how you report audited figures as a fraction of the subscriber that potentially has access to your title or how you report that back to your advertiser.  Do you even get to know who has bought or read your title now? As a publisher, surely you want meaningful relationships with your readers – you need to know your readers. I know your advertisers do, that’s why they have advertised in your print publication.

Digital is no different from the print model when it comes to creating a community of readers who have an interest in your subject or loyalty to your brand. You should aim to know your subscribers, building a database yourself so you can keep them in your own eco-system, rewarding them for being loyal, nurturing their relationship with you. They are who helped build your brand, your advertisers pay to advertise to them, you can still work the subscription and advertising model yourself until you decide on the best strategy for your brand in the new digital world.

By all means aggregators should be a part of your overall strategy, but if you keep your primary goal that of knowing each and every one of your readers through direct contact, choosing which aggregators best suit your readers will fall into place naturally.