Tablets Tip Future To First Digital Profit

Future says tablet magazine sales of over £100,000 ($161863.16) per month pushed its digital activities in to their first ever profit during the first half of this year.

Although publishers often cite growing digital revenue, ongoing digital investments often mean few digital efforts inside publishers are specifically profitable. But Future added £1.1 ($1.78) million in digital profit, nearly making up for a £1.2 ($1.94) million print decline.

The reason: “The arrival of tablets has finally delivered on the promise of mobile accelerating digital consumption,” CEO Stevie Spring says in earnings report.

We now have a truly hospitable environment for our content with built-in, friction-free payment options. They give a better web-browsing experience, make digital replica magazines a viable addition to print, and open up global commercial opportunities to develop new applications for content whose appeal transcends geography.”

“We’re now selling over £100 ($161.86)k of retail sales per month from a 10m tablets base (predicted to reach 400m in just three years).”

The most-cited example of digital success by Spring lately has been Future’s Lick Of The Day app, affiliated with Guitar World magazine, which is free to download but requires in-app payment to download new guitar chords for playing – a great example of how media operators can move from publishing content to offering utility. Both Lick Of The Day and MacLife each exceeded 500,000 downloads during the period.

For all that new-fangledness, most of Future’s tablet products are actually just replicas (60 of them). Only T3 is available in a custom tablet format. If Future builds proper tablet versions, it could find more success

Back in February, Future said digital sales of T3, which was already available as a Zinio replica, rocketed by 5,000 percent to 10,000 per month thanks to its iPad launch. If you do the maths on that, T3 was only ever shifting a measly 195 copies per month through Zinio.

Now, Future’s first-half digital revenue grew 30 percent to £7.9 ($12.78) million. Sales of digital magazine editions grew tenfold from what was a low base. Online ads now make up 34 percent of total advertising.

The digital gains did not come without hurting Future’s profit, which fell from £2.2 ($3.57) million to £1.2 ($1.94) million because of investment in new products.

U.S. revenue fell seven percent because Future produced fewer issues, closed some titles and sales were hit by bookstore closures. “The U.S. market is changing even more rapidly,” it says. “This, coupled with a nearly 25% print advertising decline (notwithstanding fewer issues), has accelerated our commitment to transitioning to digital.” Digital is 36 percent of U.S. ad revenue.