How to monetize an e-zine?

Multimedia magazines, or e-magazines, are becoming the new favorite of venture capitalists. Accompanying this boom is a surge of multimedia magazine content providers and distribution platforms. From the end of last year to the beginning of this year alone, more than 20 e-magazine distribution platforms appeared in 2 months.

A very optimistic statement is that within the next three to five years, multimedia magazines will massively replace traditional magazines. However, from the perspective of making money, the profitability of multimedia magazines is no more than three points: one is advertising, one is distribution, and one is value-added services, of which the first profitability point involves merchants, the second profitability point involves readers, and the third profitability point involves both merchants and readers. So far, these three profit models are not very mature, are still exploring, there may be a "bubble", there may be a "blue ocean".

Advertising is still the main source of profit

Advertising fees are now almost the main way to profit from multimedia magazines. Even so, among the thousands of multimedia magazines that have appeared so far, there are no more than ten that can have advertising revenue. This is partly because multimedia magazines are just starting out and advertisers have not yet realized their value, and partly because there are not many flagship multimedia magazines.

POCO is one of the earliest multimedia magazines in China, and now it is both a distribution platform and a content provider for multimedia magazines.Yao Hong, CEO of POCO, told CBN Daily that POCO's e-magazines appeared in order to cater to the needs of the users in POCO's community, which is different from other e-magazines, "We don't do it for the sake of doing e-magazines. "We are not doing e-magazines for the sake of doing e-magazines."

Several of POCO's magazines came out this way, for example, the photography community came first, and then a multimedia magazine, Impression, which is specifically aimed at photography enthusiasts, the movie multimedia magazine, Premiere, and the food multimedia magazine, Taste, came out this way, and POCO's flagship magazine, POCO Zhi, synthesizes the elements of photography, movies, travel, and food. All four magazines received advertising.

According to Yao Hong, POCO now generates more than 1 million yuan in advertising each month, of which about 700,000 is in e-magazines, and its monthly growth curve "shows a 45-degree line trend". The brands currently advertising on POCO are mainly in the fashion and IT categories.

Liu Suhua, editor-in-chief of Flight.com, told reporters, "Ads in multimedia magazines are often so closely integrated with the content that even the average consumer doesn't see them as a kind of advertisement." Generally speaking, those who dare to eat the first crab are those IT and fashion brands. This is partly because they are receptive to new things, and partly because their customer base and the magazine's target readers are a good match.

One of the advantages of multimedia magazines is that advertisers in multimedia magazines can even tell the general background of the people who read their ads and how long they spend with them.

While Wanzhong Media's Web site hasn't been officially launched for long, its vice president, Mr. Han Guo-Qiang, thinks the multimedia magazine bonanza hasn't really begun yet. One reason is that there is no flagship multimedia magazine in China that can compete with traditional media, and there is still a lot of room for development of multimedia magazines; the other is that advertisers have already begun to pay attention to multimedia magazines, and are very interested in their special forms of expression, and are expected to join in and follow up with them with big moves in the second half of the year.

Circulation charges for the future of the "money"

Charges are the second source of revenue for multimedia magazines. China has long had paid e-magazines, the most famous of which is Longyuan International Famous Magazines, a network that collects electronic versions of nearly 1,000 domestic and international magazines. The electronic versions of these magazines are often much cheaper than the paper versions, but according to the reporter, the business of these sites is not very good, and not many readers are willing to pay for electronic magazines.

In early March, Wanzong Media, China's largest original multimedia magazine platform, which now has 16 original magazines, acquired the Magzone Web site and changed its former domain name from Magarden to Magzone, which before the acquisition was a content provider of electronic versions of traditional magazines, with nearly 700 fee-based e-magazines. Korea Qiang said Magzone still retains that piece of content, but doesn't expect it to be a major source of profit.

Wazhong Media has a team of more than 40 people specializing in multimedia magazines, including several Internet veterans and "post-80s" writers. According to Korea Qiang, the competition for multimedia magazines is still "content is king", and they have the strongest multimedia magazine production team in China, with the largest number of original magazines. Nevertheless, he said Wanzong Media's main focus now is on content creation, and it has no intention of making money through distribution for the time being.

Flight.com once made similar plans. At the end of last year, two of Flight's best-selling magazines, "Men's Journal WO" and "Love Beautiful ME," tried to charge readers two dollars for each download. Love beautiful ME" editor-in-chief Chen Bihan that, with the price of a MMS to download a beautiful e-magazine should not be a difficult thing. But it turned out to be the opposite of what was hoped for, and so far the two magazines have remained free despite their stated prices.

It is conceivable that as long as there are thousands of free multimedia magazines on the Internet, it will be difficult for readers to develop a habit of paying for them, unless they are high-end multimedia magazines with exclusive rights. Yao Hong told reporters that POCO is also planning to launch paid magazines, "charging for some very good quality content," but he did not disclose more detailed plans.

Multimedia magazines are still adhering to the principle of "content is king", in an era of scarce attention, the reader's "eyeballs" attracted, but also to make them willing to pay is not an easy thing. Xia Hong said: "At present, readers willing to pay for multimedia magazines are not many, at least in the next two or three years, reading fees are unlikely to become mainstream."

In this case, to help enterprises to produce multimedia magazines is not a good way to "fast money" - more and more companies are beginning to realize the use of multimedia magazines to promote the value of their products, there are also enterprises began to use multimedia magazines as a kind of internal publication. The multimedia magazine as a form of internal publication.

Value-added services "blue ocean"

Providing value-added services to readers is one of the most uncertain profit points in the business model of multimedia magazines, but it may also harbor the greatest business opportunities.

This is determined by the advantages of multimedia magazines. Because multimedia magazines tend to be more segmented than traditional magazines, they face a more "niche" readership. In addition, multimedia magazines have the function of interacting with readers and providing timely feedback to readers, so multimedia magazines have the potential to become a powerful tool for "direct marketing".

Xia Hong, general manager of X-plus China, a domestic e-magazine distribution platform, told reporters that he often wandered around IKEA some time ago. He wasn't there to buy anything, but to find business inspiration for "one-stop service". Although he did not disclose what was behind his ambitious "one-stop service", some people speculate that it was a huge program. In short, it's a conceptual fusion of a multimedia magazine and e-commerce.

Yao Hong seems to have found this feeling. He told reporters more than once that the e-magazine is only a very small part of POCO, and that he values POCO more as a community. The users of this community have high loyalty and strong purchasing power, so it is entirely possible to explore new business opportunities among these people. Although POCO's e-commerce has just begun, he believes the platform is already set up.

Korean Qiang is also confident about this piece. In his view, the profit model of Wanzhong Media goes far beyond advertising and distribution. Although he comes from traditional media, he said he will not use traditional media thinking to do multimedia magazines. In his view, multimedia magazines are not only a new form of media, but also a very powerful tool for interactive marketing, so the combination with e-commerce is a natural thing to do.

If this can be done, it will be another version of the "mouse and cement" that characterized the first wave of the Web at the turn of the century. Here, the multimedia magazine is both a form of content medium and a medium for interactive marketing.

Example:

Almost all of the industry's e-magazine vendors are struggling to make a profit, but Gogosun took a unique approach and made a profit of 20 million yuan in the first year of its existence--

In 2005, the year the company was founded, Gogosun (Beijing Sunny Navigator), which is one of the world's largest and most successful e-magazines, made a profit of $20 million in the first year. Gogosun (Beijing Sunny Navigation Network Technology Co., Ltd.) made a net profit of about 20 million yuan.

And that's not enough to get CEO Cheng Hong excited; the new-media magazine entrepreneur expects Gogosun's sales revenue this year to be around 200 million yuan, with a profit return of more than 50 million yuan.

For this figure, many in the industry believe there is too much water, as almost all e-magazine vendors in the industry are struggling to make a profit and expect the industry to be profitable as soon as a year from now. Cheng Hong often laughs at the industry's skepticism, but does not answer.

Content makers

Unlike most e-magazine vendors, who are channel distribution platforms, Cheng chose to be a content provider.

Gogosun currently offers two types of products, one that partners with companies to create multimedia magazines for them to monetize their business, and the latter that offers multimedia magazines featuring TV shows for the end consumer.

Cheng Hong positioned Gogosun as a provider of broadband multimedia information navigation product services. However, it has only one type of content, the Sunny TV Navigation magazine, which is also the "main source" of Gogosun's profit. The magazine is a weekly publication of about 120 pages each, and is aimed at the average consumer household, providing program guides and information on multimedia TV content.

Li Qiong, deputy general manager of Gogosun, told reporters that in order to provide accurate content, the company has signed up 500 TV stations and channels in China, from which it selects key content every week and produces an e-magazine for distribution to its own subscribers.

In the audience of these magazines, young women around 25 years old accounted for most of the "users in the first time to read the magazine for about 30 to 40 minutes, after which the main brief flipping mainly." Li Qiong introduction.

Before the establishment of Gogosun, Cheng Hong and Li Qiong were both managers of the Securities Star website, and the millions of free users did not make them feel excited, because those users do not generate real cash income, on the contrary, with hundreds of thousands of fee-paying users of the financial sector website has taken the lead in the Nasdaq listed companies.

The memory is still fresh. Before choosing to enter a new field, Cheng Hong led the entrepreneurial team to investigate the electronic magazine market, he found that many electronic magazines are still through the traditional free model of the Securities Star to develop users, and the platform channel construction as a potential way of profitability, fee-based magazines in the new industry is not common, up to a year of careful consideration, Cheng Hong decided to take the financial sector once the "old way! "

The first time I saw a magazine, I saw the first time I saw a magazine.

"The magazine did not use the usual free distribution, but took the subscription issue, the ordinary version of the annual pricing of 98 yuan, VIP version of 228 yuan per year".

Gogosun was founded in August 2005 and was profitable three months later. The number of employees also expanded from 7 to dozens, but the profitable revenue was not from subscribers, but a new profit model based on the discovery of paid magazines.

Selling magazines like FMCG

This is because Gogosun's product is seen as more of a FMCG product than a new media magazine in the traditional sense.

Cheng Hong introduced the marketing model of FMCG for this new media, and abandoned the traditional model of the previous multimedia magazines that offered free downloads and relied on advertisements and value-added services to make a profit, by setting up dealers in many provinces and cities across the country, and attracting a number of large enterprises to develop group purchases.

Soon, a beer company from the north expressed interest in Gogosun's products and decided to buy 100 million yuan of the magazine's products, which also caught Cheng Hong off guard.

According to a high-level Gogosun, the cooperation model with the beer enterprise specifically: Gogosun for the beer enterprise's to provide 20 million point card, the beer enterprise for its VIP users to provide free of charge the point card, VIP users can use the point card to download a two-month "Sunny TV navigation".

"The 20 million point cards are paid for by the beer company, and the beer maker differentiates itself from its competitors by giving his VIP subscribers a taste of magazine content like no other."

The accompanying partnerships also include giants in food, insurance, and real estate.

In the face of more and more companies looking for the door, Cheng Hong summarized the reason for this is that the company's products bring more value-added experience for each other's users, so that they have a richer content. And this so-called value-added experience is from the company's unique content.

Compared to other companies that have a production team of only five or six people, Gogosun's investment in production is appalling: there are a dozen copy editors, dozens of audio/video producers, photo editors, and a number of professional composers, music producers, and dubbing actors, making the number of content staff more than 200 people.

Gogosun's product production process is more like an assembly line.

Although Gogosun's workforce has grown from seven people in its earliest days to nearly 300 today, Cheng Hong has repeatedly felt that the company is understaffed. However, Cheng Hong has repeatedly felt the company's manpower shortage. In order to further expand its content production capabilities, Cheng plans to build the world's largest multimedia production center in one of five cities in China, and recruit another 400 people for professional content production.

Like all e-zine vendors that have been favored by venture capital, Gogosun received venture capital funding totaling $2,000 from Softbank (China). A second venture capital round of tens of millions of dollars will come in at the end of July at the earliest.