Calculating Digital Magazine App Costs

Digital magazine app costs aren't limited to production and design, there are distribution fees to take into account, as well as the software and hosting fees

Calculating Digital Magazine App Costs

If you’d asked us five or six years ago if it was a good idea to publish a digital magazine app on a tablet so that it could be downloaded in some of the world’s largest newsstands, the answer would’ve been a resounding yes. At the time, publishers reported that 20% of their subscription sales came from this huge marketplace.

Fast-forward to now, we think most publishers should be focusing more on building a good and responsive web magazine (good being the keyword, because there many bad web magazines out there.) Web magazines are built in HTML can be viewed on any device, and you don’t have to pay out anything to the newsstands when someone subscribes, though admittedly you do lose the visibility you get from a marketplace like the Apple store.

That said, if you’re considering building a digital magazine app, there are still some benefits. Some people read from back to front in print magazines. But in a digital magazine app, 95% will read front to back. They’ll see more pages (and ads for that matter). Or, they’ll pick an article and start there. With a web magazine, the reading dynamics are similar but different. It’s a fascinating thing to master if you’re a magazine editor in the 21st century. The web magazine is significantly different, and both are very different from the print magazine.

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Newsstand remit rate costs

Just a few short years ago, magazine publishers were thrilled down to their toes to keep 18-40% of sales from news agencies.

When our CEO and Founder Don Nicholas ran an online newsstand in the late 90s and early 2000s, 18% was the average new remit order for the 1,400 titles there. And some publishers earned absolutely nothing from sales from the agencies they dealt with.

But all these years later, the same publishers complain bitterly about earning … 70% of sales from Apple.

Some people just don’t know when they’ve got it good. We think the cost of digital newsstand publishing is pretty fair.

If you plan to launch a reflow-plus digital magazine appthe type of edition we suggest because it’s most desired and readable—you’re going to incur more costs than if you launch a digital replica. Of course, the cost of using the top digital newsstands is technically free. Apple, Amazon and Google don’t charge you to publish your magazines.

The cost is incurred on those platforms are 30% to Apple, 35% to Amazon and 40% to Google. Amazon and Google’s rates are negotiable.

A lot of folks in the industry consider Apple to be taking a 30% commission, and that number is the focus of their ire. Yet, as we’ve noted, Apple is actually sending publishers 70% of every sale. No publisher pays any newsstand a 30% commission. So we prefer to call it a 70% remit rate – to describe the action that occurs when Apple sends your cut to you.

Which digital newsstand should you use? At this point, they’re not actually called newsstands anymore on Apple or Google, they’re just apps in the app store, but let’s just use that term to describe the place where you can download magazine apps. For these, we’re reporting on the best remit rates we’ve seen around the industry.

Apple App Store

  • Remit rate: 70%
  • Negotiable: No
  • Device: iPad / iPhone

Notes: Many publishers have created apps, due to the official “newsstand” going the way of the Dodo bird. But Apple allows publishers to sell subscriptions on their own websites, even if Apple is also selling those subscriptions, and takes no cut – as long as the website contains content, and isn’t a rival commercial website.

Amazon (Kindle) Newsstand

  • Remit rate: 65%
  • Negotiable: Yes
  • Device: Kindle

Google Play Newsstand

  • Remit rate: 60%
  • Negotiable: Yes
  • Device: Android smartphones & tablets, Google TV

Note: For a period, Google was lumping magazine content subscriptions into Google news after they closed the newsstand, but as of January 2020, magazines aren’t available there, and apps are the only way to publish digital magazine apps.

Zinio

  • Remit rate: 85%/35%
  • Negotiable: Yes
  • Device: All major ones

Note: Zinio, the oldest digital newsstand operation, handles all conversions to digital format for publishers. It also has the most complicated arrangements, and will even handle fulfillment for publishers who want to sell their digital magazines from their own website. According to the last published price we’ve seen, it has the best remit rate if you sell your magazine through your own site (85%) but drops to 35% when sold through their platform.

Digital magazine app design and publication costs

Of course, there are other costs involved, including design and publication. In terms of design, you may need:

  • Design resources –  You’ll need to designate someone to design and produce your digital issues.
  • Magazine software – If your existing designers are ready and willing (more on that below).
  • A partner – You may choose to outsource everything to a company (like Mequoda) that does it all for you, usually for a per-page rate.

Digital magazine app software costs

One thing most publishers will need if they intend to publish on the big platforms is digital magazine publishing software. When perusing digital publishing software rates, you may come across these fees:

  • Initial software fee – the charge to use their software
  • Startup fees – typically from companies who help you set up / design your digital magazine app
  • Per download fee – the flat rate or percent you pay per sale
  • Per published magazine – the flat rate or percent you pay every time a new issue comes out
  • Monthly fees – a flat rate you pay monthly to use the software / service
  • Hosting fees – the cost to host your files

We don’t normally advise publishing a digital replica, however many publishers with smaller budgets, or those who haven’t decided to invest in their digital magazine app yet, choose to start with a digital replica.

In this case, the production costs above would be less, because you’re not truly digitizing the content. A temporary thing, we hope.

Are you still publishing a digital magazine app? Let us know if they’re working for you in the comments. 

Over the past two decades, we’ve guided more than 300 niche publishers through the process of transforming themselves from legacy print publishers into multiplatform operations that often dominate their industry niche and generate operating margins that surpass those created by their legacy print business. Learn more about how we can help you apply these strategies to your publishing business by scheduling a FREE consultation today.

Comments

    Hello. I am in the beginning stages of starting my online magazine. I am looking into 2 digital publishing software companies. One told me that I shouldn’t sell subscriptions but just focus on advertising.

    However, I feel that it will take a while to build up readership before I attract advertisers. If, I don’t offer subscriptions I will be losing money. So, I am wondering, is it a good strategy to offer a free magazine and attract advertisers. Or should I start selling subscriptions from day one? It’s a travel magazine.

    Reply

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