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Zinio, Early Mover In Digital Magazines, Moves To The Netflix Model

This article is more than 10 years old.

The so-called first mover advantage is really only an advantage if you don't get too far out ahead of your customer. Founded in 2001, the digital magazines company Zinio was arguably a good eight years ahead of its time. After all, Apple hadn't yet come out with the iPhone, much less the iPad, the technology that would finally sell the average reader on the idea of a magazine consisting only of pixels.

To be sure, being early to the game has had its benefits. With 5,500 titles, Zinio has the deepest offerings of any digital newsstand, and its 12.5 million registered users rank it among the biggest vendors not named Apple, Amazon or Google . But there's also a bit of catching up to, with consumers increasingly demonstrating a preference for digital subscription plans that offer flexibility and variety rather than ownership, like the ones that have made Netflix and Spotify into household names.

Zinio's answer to that demand is a new offering called Z-Pass. For $5 a month, a customer receives her choice of three magazines from a catalog of more than 300. Subscribers can swap titles in and out as they choose and add more to the plan for $1.50 each, although some premium magazines, such as the Economist, cost more.

Zinio president Michelle Bottomley says Z-Pass grew out of a round of consumer research the company did last fall. "We asked them what they thought would make it easier to read more digital magazines," she says. "One of the things we noticed is that price per unit was a big barrier."

That $5 figure didn't come out of nowhere. "We asked them if there was a price point they couldn't resist," says CEO Rusty Lewis. He likens the cost of $1.66 per issue to "the price of a cup of coffee."

Five bucks also makes Zinio's product a lot cheaper than the one offered by Next Issue Media, the digital magazine service owned by a consortium of big publishers, which sells subscription packages priced at $10 and $15 a month. While the $15 option includes unlimited access to all NIM's titles, its library is far more limited, numbering 82 titles as of March.

Lewis says Zinio's program offers the right level of abundance. "With all the digital content out there, how many magazines can you actually read?" he says. "Three magazines felt like something that would be sustainable over the long pull."

Z-Pass went live in the U.S. this week. Later this summer, it will become available to international users. The next goal, says Bottomley, will be to improve the user experience with enhanced saving, sharing and discovery capabilities.

"We're not looking to make this a discount program," says Lewis. "We're looking to make this a value-added program."

Editing Note: In response to an appeal by Quiosk.com president and CEO Dan Schwartz, whose comment appears below, I've changed "first" to "early" in both the headline and the body of this story. I didn't change "first-mover advantage" in the first sentence because "early-mover advantage" isn't a common expression. With that expression in mind, in my original version of the story, I used "first" somewhat loosely  -- ie. that Zinio, as one of the first companies to sell digital magazines, might have been expected to enjoy a first-mover advantage. Schwartz's objection made it clear that distinction was more in my mind than on the page, so I've edited this post accordingly.