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  1. 1. Technology Review finds incremental profits in digital magazine sales C H A L L E N G E To increase the circulation and profitability of a con- sumer magazine amid increasing competition S O L U T I O N To deliver the digital version of its magazine, Technology Review chose the Zinio™ service consisting of Zinio Reader™ software on the subscriber’s computer, com- prehensive circulation and fulfillment programs, produc- tion services and a digital magazine distribution system B E N E F I T Sales from the additional digital distribution channel add to profits with minimal additional investment and provide an enhanced user experience through immedi- ate delivery and interactive capabilities available only with the digital magazine C A S E S T U D Y BUSINESS CHALLENGE Technology Review searches for circulation growth and profitability Talk about longevity. Technology Review magazine was founded over a hundred years ago—in 1899 by the Massachusetts Institute of Technology (MIT)— as a clearinghouse to disseminate information about technology. MIT evolved Technology Review into a consumer magazine in the 1980s, but circulation never exceeded 100,000. Although it had a dedi- cated core of readers, the magazine was losing money and was too small to be sustainable in the consumer space. To increase its impact on society and turn a profit, the Technology Review staff needed to find new ways to boost circulation. In 1998, the magazine was relaunched with a new editorial mission—to promote the understanding of emerging technologies and their impact on business and society. Technology Review was spun out of MIT and repositioned from serving scientists to helping a broader audience of people better under- stand technologies that are about to be commercial- ized—now, many of the readers are business and technology executives. The relaunch was a great success. Technology Review has grown to a circulation of 315,000 and is profitable. Although still owned by MIT, the magazine operates as an independent company and maintains a feature-rich Web site that supports the same edito- rial vision as the print counterpart. Undoubtedly, Technology Review has withstood the test of time. But like many publishers, it still faces challenges—building profits through greater circulation and addressing the evolving interests of its audience. Magazines move from lap to laptop In late 2001, with their audience in mind, Martha Connors, vice president and general manager at Technology Review, Inc., and her team began to explore the possibilities of distributing the magazine in digital format. Initially, this was driven by their curiosity about the potential for digital delivery. “We thought it was cool,” she says. But then it became apparent that a digital magazine could become an additional channel of distribution for Technology Review, adding to circulation and profitability. Connors saw the new format not as a replacement for the print version, but rather as a way to attract new readers. Because content could be reused from the print version, the digital format would require very little incremental investment. Plus, a digital magazine format seemed to fit per- fectly with the interests of tech-savvy Technology Review readers. But there were questions. Would a digital version of the magazine cannibalize the print version? Would people actually read a digital magazine? Would the large file size deter readers from down- loading it? And most importantly, would readers find enough value to renew their subscriptions year after year—the key to profitability? T E C H N O L O G Y R E V I E W
  2. 2. computer. “Avid magazine readers value the brows- ing experience, not the ‘hunt and peck’ searching of the Web,” Connors says. “Zinio brings the proven magazine reading experience to digital delivery with added benefits and conveniences.” For subscribers, the Zinio Reader, shown in Figure 1, unlocks a unique reading experience that extends the print metaphor with features available only from a computer: • Automatic magazine delivery to a desktop, laptop or tablet PC at the same time that the magazine hits the newsstand (especially important for foreign subscribers) • Access to magazines anytime and anywhere (online or offline) • Ability to view rich-media content, such as animated GIF files, Flash* animations, sound and video, for an enhanced reading experience • Access to archives of the magazine’s past issues • Ability to highlight sections of text or insert notes • Ability to send a free magazine copy to a friend or colleague via a “Send to Friend” feature • Keyword search capability • Links to Web content referenced in articles and advertisements The rich-media content enabled by the Zinio Reader offers key benefits to publishers, readers and adver- tisers. For example, with just one click of the mouse, a static photograph of a research instrument instantly becomes a video demonstration of the tool. This greatly enhances the publisher’s ability to convey complex thoughts. It also provides a more engaging reader experience, adding value to the digital mag- azine subscription. In addition, advertisers can use rich media to engage more readers. Zinio compresses magazines so that readers can download issues easily, even those that offer a wealth of rich-media features. By leveraging these capabilities to see more ads and sign up more readers, magazine pub- lishers can add revenue. The Zinio Reader is well suited to the needs of mobile and wireless users. The client software auto- matically downloads magazines from the Zinio server to the user’s desktop so that users can read maga- zines whether they are connected to a network or not. If the user becomes disconnected for any rea- son, and then reconnects later, the partial download BUSINESS SOLUTION Zinio helps Technology Review readers see clearly—digitally Many of the digital magazine distributors that Technology Review initially evaluated lacked the elegant user experience that was needed for an audience that was already discriminating about technology. Moreover, ads did not appear as high-quality images—a signifi- cant obstacle for a magazine. Then Connors and her team discovered Zinio—a leading digital magazine provider, today having distributed over 7.5 million magazines to more than 650,000 readers. Zinio now delivers over 70 titles to more than 200 countries. Impressed with the appearance and function- ality of the Zinio magazines, Technology Review began to work with Zinio in mid-2002 to distribute the digital version of the magazine. For Connors, choosing Zinio was easy. “I was very impressed with the image clarity and overall user experience that Zinio provides. Our test with sub- scribers went very well,” Connors says. “From the easy downloading to the searching capability to the quality of the display of advertisements, Zinio has enabled us to offer a reading experience that is superior to print media.” Zinio enhances the reading experience Publishers have long used the Internet to display content. However, the digital magazine represents a significant departure from simply posting content to the Web. First, subscribers automatically receive their digital magazine at their desktop, so they do not have to go to a Web site to get it. This obviously results in a delivery metaphor similar to print publi- cations. Also, the Web user interface is different than print. For example, a Web user typically scrolls down or clicks “next” to get to the next page, while users of digital magazines flip from one page to the next—again, similar to using a print magazine. According to Connors, Zinio magazines bring the reading styles of print magazine readers to the T E C H N O L O G Y R E V I E W C A S E S T U D Y Figure 1. The digital version of Technology Review is read using the Zinio Reader
  3. 3. will continue from where it left off. Designed to run on a variety of clients and preinstalled on various tablet PCs, the Zinio Reader gives travelers access to their favorite publications, at any time and at any location in the world. Zinio helps publishers spend less to gain more new subscribers Digital publishing with Zinio is a simple extension of what publishers are already doing. The publisher simply provides Zinio with the same files—such as PDF or QuarkXPress* files—that would normally be sent to a printer. “Magazine publishers do not have to reinvent their workflows to take advantage of Zinio services and benefit from digital delivery,” says Pam Horan, vice president of marketing at Zinio Systems. Zinio also provides comprehensive sales, circulation and distribution programs for publishers. Zinio handles everything from sourcing the customer to handling the transaction and fulfillment. “Completely turnkey maga- zine distribution can help publishers acquire and serve new customers at a lower cost,” Horan says. In addi- tion, Zinio ensures that the publisher’s content is secure by binding digital rights management into each issue. Publishers use Zinio to spark advertising interest In a tough advertising climate, Zinio has enabled Technology Review to give its advertisers something to cheer about. Connors says, “Advertisers have been blown away by the fact that you can embed sound, animation and other forms of rich media into digital advertisements.” Although advertising agencies are just beginning to recognize the potential of digital advertisements, Connors sees interest growing. “A leading automobile company, which recently used Flash animation in an advertisement, is eager to use more rich media in the future to gain a leading posi- tion in this emerging area of advertising,” she says. An Intel processor-based distribution system helps Zinio deliver The Zinio service utilizes Intel® processor-based servers for the production, publishing fulfillment distribution and delivery of all of its digital magazines. Zinio Reader offers a high-performance reading experience To promote an exceptional reading experience for all users, Zinio is working closely with Intel to ensure that its client software runs optimally on a wide range of hardware, including high-performance PCs based on the Intel® Pentium® 4 Processor with HT Technology and notebook computers based on Intel® Centrino™ mobile technology. The Intel Pentium 4 Processor with HT Technology gives readers the power to better run multiple applications at the same time. For example, you can browse a digital magazine while downloading photos from a friend’s Web site and listening to your customized music playlist—all at once. The integrated wireless LAN capability of note- books based on Intel Centrino mobile technology enables Zinio to automatically suspend and resume downloads based on the status of network connec- tivity. Internally, Zinio developers use Intel tools, such as the Intel® VTune™ analyzer, to optimize the performance of the Zinio Reader on Intel processors. Intel servers power the service To meet the needs of both publishers and sub- scribers, Zinio relies on more than twenty Intel® processor-based Dell PowerEdge* servers, which use either the Intel® Xeon™ processor MP or the Intel Pentium 4 processor. According to Graham Golder, vice president of engineering at Zinio Systems, Zinio chose Intel® architecture-based servers because they offered the best combination of performance and price. “The Intel architecture-based servers play a key role in the performance and capabilities of all the services that Zinio provides to its publishers We are constantly seeking cost-effective ways to increase our readership. Zinio has enabled us to attract a new type of reader with minimal effort and investment. – Martha Connors VP and General Manager Technology Review, Inc. LESSONS LEARNED • Because it is human nature to devalue “intangible” products (digital mag- azines included), show your readers the value-added features of digital publi- cations. Technology Review positions the digital format as the same content at the same price, but with a number of added benefits. • Target your readers carefully. Digital magazines appeal to those who travel, have broadband Internet connections, prefer to receive information and news online and are open to trying new technology. • Although most readers of digital magazines will have high-speed Internet access, try not to let file size exceed 15 MB per issue. • When catering to the technology-savvy, never underestimate the power of “cool.” Innovative products on the forefront of technology (such as a Zinio-based magazine) are exciting to this audience. • Digital magazine readers value applications that leverage the latest technologies. Mention that Zinio uses servers and client software optimized for the latest Intel processors to provide a high-performance digital reading experience.
  4. 4. and readers, from e-commerce functionality to fast downloads,” Golder says. “After performing bench- mark testing, we knew that Intel architecture-based servers offered the performance we were seeking at the lowest price.” As the volume increases, Zinio can simply add servers to address the growing demand. Says Golder, “We also have the ability to repurpose our servers quickly according to need, which helps us respond efficiently to any new customer or business demands.” As shown in Figure 2, the Zinio server infrastructure provides redundant services that benefit Zinio and its readers/end users and publishers. For readers, the Zinio servers manage the e-commerce functionality for the purchase and distribution of digital magazines. For publishers, Zinio servers provide support for circula- tion, production, fulfillment and tracking services. Technology Review attracts new readership with Zinio Technology Review uses the digital version of the magazine to increase circulation and advertising interest with minimal incremental investment. According to Connors, the digital magazine costs the company about one-third that of the print version. “After one year on the market, Zinio has attained a circulation of 30,000 for the digital version,” Connors says. “Half of that is coming from subscrip- tion agents, while the rest is coming from e-mail campaigns and the Web site.” International customers respond favorably to the digi- tal version, citing lower cost and immediate delivery as key benefits (international subscriptions are the same price as domestic subscriptions). “Readers are impressed with the fast delivery of the magazine, the ability to access magazines while traveling, the archive and search features and more,” says Connors. Going forward, Technology Review plans to continue to measure results of its new digital format, especially renewal rates. More rich media in editorial and advertisements can be expected. “Because greater circulation is our goal, we are constantly seeking cost- effective ways to increase our readership,” Connors says. “Zinio has enabled us to attract a new type of reader with minimal effort and investment.” T E C H N O L O G Y R E V I E W C A S E S T U D Y THIS DOCUMENT IS PROVIDED “AS IS” WITHOUT ANY EXPRESS OR IMPLIED WARRANTY OF ANY KIND INCLUDING WARRANTIES OF MERCHANTABILITY, NONINFRINGEMENT OF INTELLECTUAL PROPERTY OR FITNESS FOR ANY PARTICULAR PURPOSE. IN NO EVENT SHALL INTEL OR ITS SUPPLIERS BE LIABLE FOR ANY DAMAGES WHATSOEVER (INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOSS OF PROFITS, BUSINESS INTERRUPTION, LOSS OF INFORMA- TION) ARISING OUT OF THE USE OF OR INABILITY TO USE THE INFORMATION IN THIS DOCUMENT, EVEN IF INTEL HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. BECAUSE SOME JURISDICTIONS PROHIBIT THE EXCLUSION OR LIMITATION OF LIABILITY FOR CONSEQUENTIAL OR INCIDENTAL DAM- AGES, THE ABOVE LIMITATION MAY NOT APPLY TO YOU. Intel and its suppliers further do not warrant the accuracy or completeness of the information, text, graphics, links or other items contained within this document. Intel may make changes to this document, or to the products described therein, at any time without notice. Intel makes no commitment to update the document. Performance tests and ratings are measured using specific computer systems and/or components and reflect the approximate performance of Intel prod- ucts as measured by those tests. Any difference in system hardware or software design or configuration may affect actual performance. Buyers should consult other sources of information to evaluate the performance of systems or components they are considering purchasing. For more information on per- formance tests and on the performance of Intel products, reference http://www.intel.com/performance/resources/limits.htm or call (U.S.) 1-800-628-8686 or 1-916-356-3104. Intel, the Intel logo, Intel Xeon, Pentium and VTune are trademarks or registered trademarks of Intel Corporation or its subsidiaries in the United States and other countries. Zinio and Zinio Reader are trademarks or registered trademarks of Zinio Systems, Inc. *Other names and brands may be claimed as the property of others. Portions Copyright © 2003, Intel Corporation. All rights reserved. 253924-001 Portions Copyright © 2003, Zinio Systems, Inc. All rights reserved. Zinio Systems, Inc. 8000 Marina Boulevard, Suite 300 Brisbane, California 94005 www.zinio.com Internet Production services Magazine distribution Zinio Reader CRM (customer relationship management) Agent sales (e-commerce) Audit and reporting Publishers’ fulfillment and circulation services Figure 2. An Intel processor-based server infrastructure manages essential services for Zinio and its publishers and readers Intel Technology Intel® Pentium® Xeon™ Processor Intel® Pentium® 4Processor with HT Technology Intel® VTune™ Performance Analyzer

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