Edmiston Describes Business Model for Nomad Mobile Magazines

October 28, 2010
Category: Uncategorized
Mark Edmiston, former Newsweek president and a media investment banker for nearly two decades, has taken aim on being first to market with a family of new, weekly magazines for mobile devices.
 
The first of Edmiston’s Nomad publications is set to debut later this fall. Earlier reports have mentioned three titles to begin with, but in a phone interview this week, Edmiston told me that there are more than a dozen in the works.
 
It’s a truism of digital evolution that sharply defined verticals have become hot while many general interest news publications are on the rocks. Edmiston’s venture follows that principle with a vengeance.
 
The first three of Nomad’s mobile launches will be Real Eats, with an emphasis on the sustainable food movement; Wave Lines, about recreational surfing; and Wide Screen, aiming to fill the vacant space on movies left when Premiere folded in 2007.
 
By the end of the year, Edmiston plans a fourth title on viral video. And he has identified four more concepts for early 2011: personal finance, wine (especially expensive vs. affordable alternatives), losing weight and taking care of your dog. Another six or eight ideas “are in a holding pattern,” he said, but news, as well as general sports or business, are not on his radar.
 
Nomad has hired a first batch of editors and contributors. Prominent designer Roger Black will oversee the look of the magazines, which will configure differently for tablets and smart phones.
 
I’m not here to predict roaring success for Nomad. Edmiston’s own description envisions both a subscription concept and an advertising strategy that are untested in the two formats, both in their commercial infancy.
 
Still, given Edmiston’s long experience looking at media business models good and bad, I had a hunch that he would have one for Nomad that was thoroughly thought out. Here it is, topic by topic, with comparisons to print magazine launches.
 
CONTENT: As the titles above suggest, the topics are narrowly focused. Where there are existing publications in categories like food, wine and surfing, Nomad is trying to carve out a fresh angle. Besides being recognizably magazines, an especially graceful match to iPads and other tablets, they will share a common type face and look. They are being with built with digital add-ons, especially video and photo galleries. “You get the story and pictures of a Mexican restaurant,” Edmiston explained, “and a video of how the bartender mixes a margarita.”
 
Though audience numbers will matter to advertisers, there can be a trade-off between more modest totals versus strong targeting — the same principle that works so well for specialized cable TV networks.
 
PRICING STRATEGY: Later this fall, the first magazines will debut as a free app, allowing readers to sample each. After a month, readers will be asked to pay $6 per 90 days per magazine or $24 a year.
 
CIRCULATION BUILDING AND RETENTION: One of the monster costs of traditional magazine launches is a huge direct mail blitz, followed soon after with an expensive series of renewal letters. Edmiston plans no direct mail, relying instead on the free sample and a torrent of social media promotion. Each editor and contributor will promote “their own brand” (together with Nomad) with tweets and Facebook postings.
 
PAYING EDITORIAL STAFF: From the start, 35 percent of subscription revenue will go to incentive pay for editors and writers, a structure typical for ad sales in old media but not for the editorial side. Avoiding the tyranny of pay per page view, the editor of a given publication gets 5 percent and decides how to distribute the other 30 percent among full-time staff and contributors.
 
Though not a stated part of Nomad’s plan, the multi-title strategy allows for quickly shutting down those that do not take off, as many online publications do with their lineup of blogs.
 
PARTNERS: Another digital-age truism is that you can’t do it all on your own. Success turns on picking the right partners on the right financial terms. While many media developers have complained that getting Apple’s approval for an app is an oblique and frustrating process like getting into an Ivy League college, Edmiston reports the reverse experience.
 
“Apple came to us early on and asked how they could help,” he said. That gives him hope that Nomad will come to terms with Apple on a subscription split or other fee arrangement for hosting, and that, if successful, the Nomad group could figure in a second wave of iPad promotional material.
 
The magazines will be delivered by a new Web-based technology, Treesaver, which will allow it to be accessed via any browser on any device. That means old-fashioned guys like me can view it on our desktop should we choose.

It also should correct a defect my colleague Steve Myers pointed out to me in first generation iPad magazine editions — many are painfully slow to download because they move as photo files of whole pages. A Nomad spokesman told me that in a recent test a prototype downloaded to an iPhone in 45 seconds and to an iPad in 90 seconds.

 
ADVERTISING: Edmiston became the third CEO I have interviewed recently to concede that lucrative mobile advertising formats “are very much a work in progress.” How to make an ad work, especially on the smaller smart phone screen “is a problem that hasn’t yet been solved.”
 
But Nomad will have a few things going for it. On the tablet, Edmiston said, the reader encounters ads in roughly the same way as full-pages in print magazines. You see them turning the page at the end of an article, look and linger for a while if interested, or flip quickly past if not. “It’s not intrusive,” like Web scroll-overs and drop downs, he said; “the user will have control.”
 
Also the initial New York Times article on Nomad reported that it will offer single-advertiser sponsorship of issues and that the Treesaver execs claim their platform will “support a richer advertiser experience.”
 
None of that translates to robust advertising cash flow from the get go, but the plans do sound promising. And Nomad is avoiding the trap of many a failed digital start-up — seeking big audience with free access and counting on advertising to carry the whole revenue load.
 
NO PRINT VERSION: A host of Web-based launches from newspaper hyperlocal sites to Politico have found important advertising revenue by “reverse publishing” a print edition. Barry Diller said recently that with merger talks with Newsweek dead he hopes to create a print extension of The Daily Beast. Edmiston told me that is not in the cards for Nomad. The expense of printing and mailing a short-run magazine in timely fashion around the country would be prohibitive.
 
COSTS: I didn’t talk specifics with Edmiston, but the savings compared to conventional print magazines are enormous — no printing, paper and mailing costs, greatly reduced production expense, and so on.
 
The final question is whether the Nomad titles will be of high quality and engaging. Right now, there is no way to tell since prototypes have not been released for public consumption and will not be until the “edition zero” versions in the free app introductory offer.
 
As for me, I’ll probably pass on surfing, personal finance and sustainable food. I’m a maybe on wine and losing weight (both interests of mine but conflicting). However, I will be watching with eager anticipation early next year for what Edmiston and his Nomad collaborators have to tell me about taking care of our family’s four aging pooches.