Flipboard’s Quittner: Newsstand magazine business is “horrible,” “ugly”

“Virtually every publication in the world right now would desperately like to be 100 percent digital” but most can’t do it, said Flipboard editorial director and Time Inc. (s TWX) vet Josh Quittner at Internet Week this week, as publishers debated how to monetize digital magazines.

Social sharing is bound to become more valuable than print distribution, Quittner said. “The newsstand business is a horrible business. Magazines pay something like 50 percent of their costs of distribution to newsstands, and then if they sell 20 to 30 percent of their magazines, that’s considered a home run. Then they have to pay to kill — to destroy — the 30 to 40 percent of the magaines they don’t sell. It’s a really ugly, uneconomical business that is probably not long for the world.”

The Daily editor-in-chief Jesse Angelo said “we always wanted to be a subscription product, with paid ads” and said that “when we talk about apps, it drives thousands and thousands of downloads to the Apple Store. There’s beginning to be a re-creation of the original Web link economy in apps.”

As for paid content, many Flipboard publishers are asking for paywall support, Quittner said. “People will pay for ‘essential’ — the WSJ, the NYT, and the Daily,” he said. Flipboard hasn’t introduced a paywall option yet, but “we have to create systems that allow for the most engaged users to pay for that which they think is essential.”

“Advertisers want much more integration with content,” Angelo said. “They want to sponsor a page, or to have content that’s ‘brought to you by’.”

The Daily won’t do pre-roll advertising, Angelo said: “Short of a video of the president getting shot, I’m sorry, I’m not waiting through your pre-roll for anything. But post-roll, or ‘best video of the day as brought to you by Canon SureShot’ or something — that sort of thing is much more on the rise.”

Digital magazines could take one cue from print

“My tech fantasy is that within the next couple years, smartphones and tablets will have external-facing screens” so readers can show others what they are reading, Quittner said. “It’s a huge social signal. Right now we can’t do that. We’re all in our own little content silos.”

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