Harrison Group Survey on Digital Media and Book Consumers

Data Offers Reality Check for Industry in Flux; Publishers Must Realign with Consumer Expectations for Digital Media

NEW YORKJan. 5, 2011 /PRNewswire/ — Publishers, in the midst of creating and driving a reading revolution brought about by both new digital reading devices and entirely new platforms, see key drivers of the content and reading revolution very differently from consumers.  These differing views could hinder wider growth, according to new research from Harrison Group and sponsored by Zinio.  Key differences in the treatment of intellectual property, re-publication, distribution and content management were noted in a parallel survey of consumer expectations of the future of digital publishing devices and publisher and industry professionals.
The findings of the study of 476 publishing industry professionals illuminate key perceptual differences in the overall reading experience for tablets, e-readers and smartphones that could influence growth and adoption.  This study complements a similarly focused study of over of 1,800 consumers to define current and future digital reading preferences.
Seventy-four percent of the publishers are now fully engaged in implementing digital versions of their magazines and books.  43% of the publishers maintain separate digital operations from their print publishing operations and 67% believe that digital additions will not change from their normal printed publications.  For publishers, copyright control is the most dominant management issue.  In contrast, consumers insist on the freedom to share content with friends, family and colleagues, and they expect that digital publications can be shared among smart phones, tablets and e-readers.  This (like the issues facing the recording industry) suggests an inherent conflict between the subscription tradition of the publishing industry, particularly magazines and newspapers.  Consumer insistence in a new right to multi-media access will create substantial change in the way the publishing industry works.
Dr. Jim Taylor, Vice Chairman of the Harrison Group, said, “The data suggest a very different view of the future of digital publishing between readers and publishers.  While publishers expect that digital reading is just a medium change, readers expect that writers will write for the digital medium and that they cannot only read, but also comment on and share the published material they consume.”
The vast majority of publishers expect content to be paid for by consumers.  Among them, the subscription model remains popular among 74%, whereas only 13% of consumers prefer a standard, subscription-based model. The remaining 87% of consumers are interested in unlimited access at a set price (33%), purchasing single copies of publications (25%), making small micropayments for individual articles (16%) or paying for “credits” to be drawn down as content is accessed (14%).  For publishers, the standard subscription price is expected to yield greater profitability.  For consumers, occasion-based publication purchasing is expected to result in substantial per publication savings, reflecting their recognition that the page costs will be going down in the absence of associated print distribution and mail costs.  While publishers anticipate that their income from digital publishing will grow substantially in the next five years, only 5% of the savings they will reap from digital production will be passed onto consumers.  
“Sixty-two percent of publishers have plans to distribute and market their content via a tablet within the next two years, and only 52% intend to distribute content through dedicated e-reader devices.  It should not be surprising, therefore, that consumers who currently own these devices do not broadly perceive the access to digital content to be on par with print,” observed Jeanniey Mullen, Global EVP and CMO for Zinio and VIVmag.
  • Publishing Success in a Digital World Rests on Technology:  76% of publishing industry professionals agreed that the publishing industry is being driven by technology and 71% believe that as digital publishing business models evolve, the right technology can make or break a publication.
  • It’s Too Early To Call It a Win For Any One Technology:  81% of publishing industry professionals said that publishers will need to consider all emerging devices in the e-reader, smartphone and tablet categories, agreeing with the statement “it’s too early to say what is most important.”
  • Publishers Seek Feature-rich Devices:  Industry professionals ranked numerous features as being important to digital publishing devices, including high-resolution display (68%); plays video (67%); supports Adobe Flash content (62%); display does not cause any eye fatigue (63%); displays text in color (62%); substantial storage on the device (59%); and display allows for reading in bright sunlight (55%).

Consumer expectation for accessing content in multiple formats and on multiple devices underscores a need for the publishing industry to greater align with technology providers to address multiple platforms and an enhanced reading experience that will both engage and connect consumers to content.
“Since more than three-quarters (78%) of the industry indicates that they are going to make content available through web-paged viewing, the two distribution outlets must work together to provide consumers the rich, any-screen reading experience they are demanding.  Platforms such as Zinio UNITY™, which gives publishers presence across all tablet reading devices and all other digital reading environments while publishing only once, brings value to the entire industry,” Mullen added.
According to Dr. Taylor, “Consumers expect to pay only once for the publications they buy and have it available on any device they choose to read it on.  This seems to suggest that devices will converge on a platform solution that enables magazines, books, newspapers and even catalogs and textbooks on a single digital solution.”
In any case, there is general acknowledgment that print is a vital medium.  Industry respondents believe more newspapers (82%), magazines (74%) and books (62%) will be read digitally by 2020 than in print.  However, as the revolution moves forward, many logistics remain unanswered.
  • Free vs. Paid:  There is a split among publishing industry professionals when it comes to free content vs. content behind a paywall.  On average, industry respondents believe 54% of their content will be free to consumers, behind no paywall, while 46% of content will be charged for.
  • Content at What Price?   When asked how publishers may value content monetarily, the majority of publishers (57%) envision price variation based on one or more of the following scenarios: length of content (29%), popularity of publication (21%), entertainment value (20%) and visual quality (17%).
  • Advertising Opportunities:  Advertising continues to be a strong revenue generator of e-publishers with 53% of publishing industry professionals reporting that “my company is selling advertising for inclusion in digital publications,” and more than half (54%) stating that “my company is actively monitoring/exploring the ways in which advertising models might change as a result of digital publishing.”

“The data suggests that consumers—especially those who have already adopted tablet or e-reader technologies—are forward-thinking in their expectations of these technologies and accompanying content.  The problem lies with publisher expectations of what it will take to get there,” Dr. Taylor noted.  “Some believe a PDF copy of the print version of a publication is sufficient…consumers say it is not.  Consumers expect content on all devices, all platforms, varying screen sizes, synced between devices, to be shared among friends socially, paid for in micro-payments and accessed via a mobile app.  It seems that consumers will dictate the ongoing evolution of these technologies as publishers struggle to keep up with the desirability of new channels of content distribution, new expectations for content sharing, new demands for device interchangeability and new freedom to engage content – especially the written word.  In an industry with 500 years of a single press-based business model, significant difficulties lie ahead.”
About the Survey:
The survey results are drawn from 476 professionals in the publishing and related industries, including editors, managers, operations, advertising, marketing and creative personnel, who completed a 25-minute online survey between September 17 and September 23,  hosted by Harrison Group and sponsored by Zinio and Qualcomm, between September 28 and October 18.   The consumer information presented derives from the responses of 1,816 Americans, ages 18-64.  The consumer research includes oversamples of device users for a total of 214 tablet users and 279 e-reader users.   For more information about this research, please visit www.changethepage.org.  
Copies of the research can be purchased by contacting Kristen Harmeling at KHarmeling@HarrisonGroupInc.com.
About Harrison Group
Harrison Group is a leading market research and strategy consulting firm headquartered in Waterbury, Connecticut, with offices in BostonColumbusIndianapolisSeattle and Scottsdale.   Harrison Group specializes in syndicated research, luxury markets, technology markets, financial services, interactive entertainment and specialized media markets.  The firm’s strength is the application of qualitative and quantitative methods to the search for strategy, forecasting and market analytics.   Harrison Group’s cohesive team of researchers, analysts, field experts, focus group facilitators, marketing experts, brand specialists and multivariate statisticians have all specialized in the business of clear, definitive results, for many of the world’s most demanding clients.
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About Zinio
Zinio is the world’s largest newsstand and bookstore.  With its many digital products and services, Zinio creates better ways for people to discover published content, get more of it and do more with it.  Now, readers can purchase content once to be read on any screen.  Zinio provides the ability to shop for, search inside, read, share and save digital content in 26 local newsstands in any country in the world.  Through the ZINIO UNITY™ reading platform, readers can move seamlessly within each publication, page between text, interactive graphics, animated illustrations, videos and more on most operating systems. Offering hundreds of thousands of the best digital issues, Zinio’s e-stores and applications are revolutionizing reading.  Founded in 2001 and privately held, Zinio is headquartered in San Francisco and has offices in New YorkLondonParis,Barcelona and Taipei.  www.zinio.com
SOURCE Harrison Group

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