Steve Smith’s Eye on Digital Media: Zinio Gets New Management, Tests New Digi-Zine Models For 2013

12/17/2012

The man who helped develop the ubiquitous EZ-Pass toll booth technology is planning to bring a similar moniker, if not the same model to the field of digital magazines with zPass. That is just one of several moves digi-zine pioneer company Zinio plans to roll out in 2013 after a major shake-up of the executive suite. Much like a start-up after its ramp up stage, Zinio is moving co-founder and longtime top exec Rich Maggiotto to serve as chief innovation officer. Former Brown Brothers Harriman executive in residence Rusty Lewis (who has been working as an advisor for the past six months and was once CEO of Transcore, the company behind EZ-Pass; pictured) becomes ceo to help expand and mature the business. He also brings on board former Barcleycard chief marketing officer Michelle Bottomley (pictured) as president charged with expanding the efforts to market to consumers. Zinio’s newsstand app of over 5,000 digital magazines from 1,000 publishers is among the top grossing downloads across device platforms.

Zinio is maturing to the "next level" by experimenting with new business models and publisher partnerships in the coming months, Lewis tells min. Now in alpha testing stage is a "zPass" that will move beyond Zinio’s current individual magazine subscription and issue pricing and offer a "member" model that includes flexible bundling that appears to be different from the "all you can eat" tiers offered by NextIssue. Details are still being solidified for an early-2013 announcement. But partner SourceInterlink is among the companies working with Zinio on the pilot project.

Lewis also expects to see new ad models come to the mag app format. "We think dynamic ad insertion downstream is an interesting additional way for publishers to monetize their digital editions," he says. Although many digi-zines have not on their own achieved the scale necessary to attract advertising, Lewis thinks they can find that scale perhaps by selling across multiple titles or across a category of magazines within a newsstand like Zinio’s. He envisions magazine sales teams being able to sell this themselves.

A new ad model would complement the current ShopAdvisor e-commerce product that inserts contextually relevant "buy" buttons around product mentions now in over 35 titles within Zinio. And it turns out people really do want to click-to-buy when reading their magazines, although not in quite the way Zinio expected. "We went into this thinking people would be making impulse buys," says chief marketing officer Jeanniey Mullen. "But we are seeing it work in places in editorial for high-value items."

Whether it is the slow and selective roll-out of ShopAdvisor, zPass or a future ad-serving product, Lewis emphasizes that the plan for 2013 is collaboration and coordination with partners. "We have been very cautious in working with publishers to find the right business models. We have a lot of innovative ideas here to benefit partners, but we want to be careful and thoughtful about how we execute this and getting buy-in from publishers."

But with so many top-tier publishers executing their own standalone magazine apps across the major device markets, how relevant is Zinio for major consumer publishers? Discovery and flexibility, the company insists. Eighty percent of the people buying titles in the Zinio app had no previous relationship to that publisher. "But we have been told by publishers and our research that a lot of the people who got to the [standalone] app for the title are already brand fans who go to the device to buy it," says Mullen. And Zinio is able to adjust pricing on the fly and for specific markets and customers in ways app stores can’t.

But most of all, publishers can expect a lot of data from Zinio in 2013. Lewis says that with 5-6 million digital magazines being delivered to users each month and a registered user base of over 20 million, the company has big data around digital magazine reading and buying behaviors that its partners can leverage in many ways. The company will be moving to increase the amount of data available to publishers and make it more actionable.

Steve Smith (popeyesmith@comcast.net) is digital media editor for min/min’s b2b/minonline.com. He posts regularly on minonline and directs the min Webinars. Smith also co-chairs min’s Digital Summits and, as ceo of Roving Eyeball Inc., he consults for a number of publishers in the digital space.