Maghound: Business Model Innovation in the Magazine Industry?
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Case Code: BSTR343 Case Length: 23 Pages Period: 2007-2009 Pub Date: 2009 Teaching Note: Not Available |
Price: Rs.400 Organization: Time, Inc. Industry: Magazine Countries: USA Themes: Business Model Innovation, Industry Analysis |
Abstract Case Intro 1 Case Intro 2 Excerpts
"While magazine circulation is strong, there is a need for new and innovative ways to reach consumers, particularly online. Maghound is a novel approach that begins with the consumer's needs, provides them with unlimited choices, and delivers highly engaged readers to advertisers. It's an idea that will be a winner for consumers, publishers, and readers."
- John Squires, Executive Vice President of Time Inc., in 2008.
"There has been this major paradigm shift in the way consumers shop, pay for, and manage the services they choose. And this shift has occurred everywhere except for magazines. We still sell on a fixed-term subscription or by single copy with no innovation. And [Maghound] is hoping to change that."
- Dave Ventresca, President, Maghound Enterprises, in 2008.
Introduction
In September 2008, Maghound Enterprises, Inc., (Maghound Enterprises.) a subsidiary of Time Inc. (Time), launched a beta version of its Internet-based magazine distribution model called 'Maghound'.
Maghound allowed customers to choose titles from different publishers by paying a monthly subscription fee, with the option of switching to other titles any time. Unlike traditional annual subscriptions, the customers were not locked for a whole year. Speaking on the occasion, John Squires, Executive Vice President, Time, said, "While magazine circulation is strong, there is a need for new and innovative ways to reach consumers, particularly online." The website was promoted with the tagline, 'The magazine lover's best friend' (Refer to Exhibit I for Maghound Logo and Tagline).
With the rising popularity of the Internet as an easily accessible and widely viewed form of media, the online version of most publications became available and the sales of printed copies sold through newsstands as well as through the subscription channel, started to show a decline. Other factors such as rising postal costs, high logistics expenses, increased TV viewership, closure of some direct marketing companies that sold discounted magazine subscriptions, etc, only added to the woes of the magazine industry. According to analysts, the publication houses, for a long time, also failed to come up with any innovative business models or marketing strategies to boost sales...
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