Interview: Zinio CEO Not Threatened By Apple’s Own Newsstand

Apple’s iOS 5, with new features like background downloading and the Newsstand folder, seems like it poses a threat to the 11-year-old digital magazine newsstand Zinio.

But CEO Richard Maggiotto tells paidContent: “If you measure by revenue, it hasn’t had any impact.

“In fact, it’s gone up. We’ve remained number one in 76 countries in the news category.”

Since Apple (NSDQ: AAPL) introduced the features on October 12, Future, Guardian News & Media, Exact Editions, Metro, Conde Nast and New York Times Company have reported healthy take-up of new and existing news apps. Future’s growth occurred after introducing native iOS apps for magazine replicas it had long published through Zinio on relatively low take-up.

Maggiotto tells me Zinio will replicate the key iOS 5 feature that publishers are loving so much. “Our 2.2 release will have background download that actually works,” he says, noting how some publishers complain of problems with the system.

“(Newsstand) tries to give more visibility to magazines. I don’t think its execution so far has caused consumers to abandon Zinio. It puts everything in one folder, but beyond that, there’s no change to pricing, there’s no consistency of experience across different apps.”

Zinio’s places in iTunes Store’s lists of top-grossing news apps and top free iPad news apps dipped in the couple of days after iOS 5’s release as consumers gobbled new magazine apps, but have since recovered to around the same mark, while its rank amongst top-grossing iPad news apps has remained entirely unchanged at number one, according to AppData.

If iOS 5’s system-level feature replication does threaten Zinio with disintermediation, what is Maggiotto to do? He is firmly fixed on remaining a cross-platform aggregator, noting how 99.4 percent of Zinio’s iPad users register a Zinio account so that they can read editions on devices other than iPad.

“There are a whole new range of platforms,” Maggiotto says. “We’re going to continue to bolster and enhance the offering across all those platforms as a newsstand. We’re seeing a slower but sure growth in Android tablets. We get these devices four to six months in advance and the devices coming in are rivalling iPad – we’re very bullish about that.”

Zinio hosts a large selection of over 5,000 titles, most of them replicas of print editions. But the store also hosts around 100 rich-media titles, supplied by publishers either via Zinio’s FusionWeb technology for layering in dynamic content, its Adobe (NSDQ: ADBE) InDesign plugin FusionDesign or its FusionLink suite, which can import custom iPad magazines built using packages like Woodwing or Adobe Digital Publishing Suite. Maggiotto wants to encourage more publishers to submit dynamic titles in these ways.

Although this month’s early success for magazines as self-contained iPad apps might suggest an opportunity for Zinio to become a vendor of production suites to author individual app editions, Maggiotto prefers to remain focused on the aggregated experience.

“We have 12 or so apps in the app store powered by Zinio,” he says. “The reality is, the Zinio aggregated app was outselling those branded apps by eight to one. If it’s not generating revenue for us, we don’t do it, so we’re considering it. Whether we’ll go white-label, there’s been a lot of interest from other retailers, not just publishers.”

Commenting on how Future found large growth in downloads by going direct to iTunes Store outside of Zinio, Maggiotto says: “I see their desire to put their own apps out there as something very natural. It doesn’t mean we suffer.” Future’s editions remain on Zinio – the publisher wants to be on as many newsstands as possible.

Zinio has already stepped around Apple’s upgrades once before, when it introduced iTunes-powered in-app payments to comply with Apple’s new terms this summer. “We’ve had to embrace what we’ve had to to embrace,” Maggiotto says, off-setting what might be reluctance with a recognition that iTunes makes paying lucratively easy: “I got in to trouble with my wife when I told her I remembered my iTunes password but not our anniversary.”

Maggiotto says he wants to help publishers deliver new-wave ads that blend digital and print styles, but is wary about “stepping on toes” in an industry where display advertising has been an accepted revenue model for so long.

Next on the agenda is enhancing discoverability algorithms to drive up consumption, relaying his own recent experience: “I never New Scientist magazine from the UK existed – now it’s my favourite magazine.”