Sunday, December 09, 2007

Can Time Inc.'s Maghound Concept Work?

Can Time Inc.'s Maghound Concept Work?
By Kristina Joukhadar

Several stories have been written about Time Inc.'s upcoming Maghound offering, but so far, no one has really explained how it will work.

Will publishers be leery of working with Maghound?

"I hope not!" says Dave Ventresca, president of Maghound, which is spearheaded by Time Consumer Marketing.

"It will help in terms of efficiencies to have the Synapse technology residing in CT, having the resources and the publisher relations'there will definitely be some cooperation and a supportive role, along with support from other Time Inc. divisions, but Maghound will be led by Time Consumer Marketing.

While some publishers may be hesitant to join a program that might pirate some of their regular subscriptions, Ventresca says that in a live market test, the majority of consumers selected new brands, not the titles of their existing subscriptions. In the MAGHOUND environment, we feel that more people will be reading more magazines longer than with the traditional subscription model.

What about the concept?

Maghound is not selling traditional subs, but rather, a membership in a service, says Ventresca. "We're offering a better way to order and manage magazines that come into your house [single copy]. You get a set number of titles for a monthly fee with no term.

"You are charged month to month, and are not linked to just one brand. So in month one, you can get magazines A, B and C; and in month 4, you can switch to magazines D and E."

What are the practical concerns?

"We're pretty confident we can do this," says Ventresca. Time Customer Service and CDS and Palm Coast/Kable--all the major fulfillment systems--have said they can work with this. We've painted it all in broad strokes and some operational definitions remain, but we have the fulfillment solution figured out."

The current delivery system and consumer pricing levels will make it impossible to get issues out any faster than with a traditional subscription, Ventresca says. "You're still dealing with the same fulfillment calendars, the same printers, so it¹s hard to shrink. And the database selection dates are done in advance.

"It's not faster, but it will be an improvement in the expectations of the consumers, because with the account screen online, they will know approximately when they will receive all of their issues.

"For example, it will tell them 'The first issue of magazine A will be the January issue, due to arrive the third week of December.' We have postal experts working on this and they know good delivery times. All copies will qualify for the periodicals rate, presorted in with the regular run.

"Each magazine's fulfillment calendar will be known," he says, "so if the consumer selects the magazine in January, February, etc., we'll know when they send the order to the database. You need to build the fulfillment system to be scalable, reliable, cost effective, and we're doing that."

Will consumers buy their copies online?

Ventresca says the beauty of the Maghound system will be its ease of use for the consumer. "There is no term and full flexibility. Consumers will manage online in one screen. The switching is easy when there's no term. They are charged a monthly fee, by credit card and Pay Pal."

Will it meet the auditing requirements?

The Audit Bureau of Circulations reporting has been gone over multiple times, Ventresca says. "It's good circulation, paid for by real consumers with real dollars, and the orders are placed in a magazine centric environment. For the time being, at least, it will temporarily count toward single copy sales.

"When there's more volume in the future, it might evolve into its own classification on the ABC audit report. As far as the value to advertisers, it's great circulation. For a flat fee, you can choose from hundreds of magazines, which demonstrates 'wantedness.'"

What data will publishers receive?

The Maghound database will be separate and contain only the magazines and members in the program. Because of the nature of its financial relationship with its members' services, and the fact that these are not subscribers, Maghound will own the customer data and will not be able to share it with other publishers (including Time Inc.) for promotional purposes. You can¹t release the names, as members wouldn't want their data shared.

How will the finances work?

There will be full reporting for publishers, issue by issue, with how many copies were sold, particularly for new members. For example, the report will include: "Publisher, Magazine, cover date, no. of copies distributed, no. paid and no. sent to new members as part of the free trial or bad credit card debt," says Ventresca.

"Publishers will receive a fixed dollar amount per issue sold per title with a certain amount for every copy--the amounts will differ by class of title. A lot of magazines have experienced unproductive circulation on their files, and this circ will have positive payments. It could be used to replace less attractive or more expensive circ."