'Economist's' Rossi: Tablets bring good news
By Sean Callahan
If The Economist's experience is any indication, the tablet may be a cure for many headaches the media industry is experiencing. The Economist Group said digital-only subscriptions for The Economist on tablets, e-readers and the Web surpassed 100,000 as of the end of October—more than double the number of digital-only subscriptions the magazine had a year earlier.
The Economist has seen more than 3 million downloads of its app to tablets and smartphones. Those downloads serve essentially as an advertisement for The Economist and help drive subscriptions in a much less expensive way than free samples in print could ever do, according to Paul Rossi, managing director and exec VP-Americas for The Economist Group. In a Q&A, Rossi discussed how the tablet is providing many reasons for optimism at The Economist.
Media Business: What numbers are jumping out at you about tablet adoption?
Paul Rossi: One is the adoption of tablet devices. We just did a piece of research with Pew [Research Center's Project for Excellence in Journalism], which said 11%, effectively one in 10 [Americans], have a tablet. This research was done in the summer - so with the numbers you're seeing about sales through the holidays, that number is going to increase. The other number I think is an eye opener for us was we asked our subscribers in the summer what was their primary way of reading The Economist today, and what did they think that would be in two years' time. The vast majority of people today read The Economist in print. That number is about 90%. Then when you said what do you see your primary source of reading The Economist being in two years' time, that number drops in print to 50% and effectively went up to 50% who said they would read it on a tablet or e-reader. MB: How are you responding to these changes?
Rossi: One is that we need to have the apps ready for people to be able to consume on their devices in an easy way. One of the encouraging things for us in the Pew research is that actually these devices are reading devices. People are reading more; they're reading long form on these devices. The second thing we're doing is starting to market to potential customers to get them to start buying subscriptions and single copies on these devices. We're reaching customers that we didn't reach before. Of the digital subscriptions we've sold, the vast majority of people were not previously subscribers to The Economist in print. It's opening up new audiences for us.
MB: The app itself seems to be a hook for new subscribers, is that right?
Rossi: That's one of the ways [we're getting new subscribers]. The app is free, and with the app you get five articles a week. If you're [already] a subscriber you get everything. The app gives us sampling at a scale and at a cost that wouldn't be repeatable in print. We also are looking at getting people to download the app who may not have had any experience with The Economist, so I think it also takes us to new audiences.
MB: In the past, "The Economist' offered four free print issues as a marketing tactic? Is the app replacing that approach?
Rossi: We have actually phased out the four free issues in print for the economic reason more than anything else, but what the app allows us to do is resurrect that concept. And the concept is based on the fact that we know the more somebody reads The Economist the more likely they are to subscribe, and the longer they read the more likely they are to renew. We did that historically with free issues. That model was challenging on an economic front, so with the app it's a much more efficient way of getting people to start to sample the magazine.