Magazines find new life with HP's MagCloud

By Justin Toland, Contributing Editor, PPI Magazine

BRUSSELS, May 16, 2011 (RISI) - Fears that demand for newsprint and magazine grades is in a terminal nosedive haunt the industry. Disruptive technologies - first the Internet, then smart phones, e-books and now the iPad - seem to have changed the game permanently, breaking the long-established link between GDP growth and demand for publication papers. Yet, could a new web-based service be the disruptive technology that reverses this trend?

MagCloud (www.magcloud.com) is a print on-demand magazine publishing service (beta) launched by Hewlett-Packard (HP) in the US in February 2009, going global mid-2010. Developed by HP Labs, the genesis of the service was the realization that while there were a number of services enabling authors to publish books on-demand, nothing comparable existed in the magazine sector. "MagCloud allows anyone with a passion and content to publish a print magazine," says HP's Director of New Business Initiatives and Chief Executive of MagCloud, Andrew Bolwell. "They don't need to be a publishing magnate anymore, they just need to be someone who can create a nice PDF and upload that to MagCloud and we pretty much look after the rest for them." (See box: How MagCloud works).

As of mid-April 2011, more than 9 000 magazines were available via the service, covering nearly 40 categories (adult content is excluded): "You name it, there's a magazine for it - gardening to papier mache aeroplanes and everything in between," says Bolwell. "It's like a YouTube for Publishing - There's so many different use cases, but fundamentally it allows people to publish in print very, very easily."

Major players

It's not just small, niche publishers and individuals who have signed up to MagCloud, however, "We have a number of fairly well-known publishers using the service as well," notes Bolwell. "For example, Life magazine has used the service in the past to bring back its Woodstock edition and to put up a lot of its photo books. And more recently Golf Week is making all its PGA Tournament Guides available through the service."

The real value of MagCloud is the printed page

Bolwell believes that major publishing players are interested in MagCloud because it makes financial sense: ""Magazine publishing in the traditional sense is very, very expensive: publishers need to print hundreds of thousands of magazines ahead of time and then hope like hell that there's enough demand to sell them all - there's a lot of upfront cost and risk involved. What MagCloud allows people like Life and Golf Week to do is it removes all of that risk, so not only can they publish their most recent content through their traditional channels, they can go back into their content archives and they can create special editions and they can do that as soon as they've got that content designed and developed."

Impact on paper

Although MagCloud also makes its publications available in digital edition format, Bolwell believes that the real value is the printed page: "People love seeing their content in print...the number of people who receive their printed magazines and say 'oh my god it's gorgeous', or oh my god, I can't believe how beautiful this looks'. We don't get that from people reading something on a screen typically: it's when they are holding something tangible in their hand and it's real ink on real paper that you get this sort of emotional, visceral reaction...If the content is valuable, people want to see it in print, and people want to still read it in print."

MagCloud publications are printed on FSC-certified paper saddle-stitched or perfect bound (up to 384 pages). For this, HP makes use of its global network of print service providers (PSPs) with Indigo digital presses. "The service is more focused on short run or custom print runs that leverage digital printing versus analogue and offset printing," explains Bolwell. "The beauty of this model is, as volume grows, we can we can print the product closest to the person buying the magazine... we can proliferate the print network based on the demand for the products."

The chief executive adds that MagCloud is "economical for print runs up to say 2 000, 3 000." HP is also considering whether it makes sense for the service to offer different print methods for longer print runs. "It's not out of the question, nothing's out of the question," believes Bolwell. "We're really just focused on what our publishers are asking for and at the moment they seem to be asking for more targeted customized content than just a replacement for their traditional print."

Bolwell says that HP's print service providers have warmed to the advent of MagCloud, as much for the content as the additional business: "We get a lot of feedback that they love just seeing what people are printing. I think there's a lot of people in the PSPs that are excited about reading what's coming off their presses these days (as much as) all the business that it's helping generate for them... I could never have dreamed of the sort of things we are seeing coming out in print now. It's just people publishing their passion, whatever that is."

As MagCloud develops, its decentralized, on-demand publishing model may also lead manufacturers of magazine grades to change the way they operate. "I believe the business models around print will change," says Bolwell. "The way that these industries work today, there's a lot of waste. In the magazine space, more than 60% of magazines that are sent to newsstands each year in the US are never sold. We did a calculation - if you were to take all of that unsold product and place it end-to-end it would circle the earth 16 times. That's an incredible amount of waste."

By contrast, MagCloud eliminates much of that waste, whilst also giving publishers new revenue opportunities: "No magazine need be the same - it could be personalized and customized specifically for the person reading it," suggests Bolwell. "If every magazine is very targeted and relevant, the advertising opportunity is actually greater, because the more targeted the information, the more targeted the audience for that content, the higher the value of advertising in that content. This could actually raise the value of advertising in print material because people aren't reading something generic: they are reading something that they love, they're passionate about and that's very relevant and targeted to them."

Future growth?

Reducing waste doesn't automatically equate to reducing demand for magazine papers, however. In fact, Bolwell believes the opposite could just as likely be true: "Who's to say there can't be more pages printed in the future? In the past there's only been a very few companies with the technology or the financial wherewithal that could publish in print. But through services like MagCloud, now anyone can publish in print. You take the 2 billion or whatever people online now that have access to this service and it's as easy to use as YouTube. Then maybe with this new business model, who knows? Maybe there's more printed pages out there in the future because it's more accessible to people...".

Time will tell whether Bolwell's scenario rings true, but he is optimistic about the future of print: "Maybe some paper manufacturers are living in fear a little bit about the printed page going away. What we're trying to show them is there's real value in the printed page and there's a real future for the printed page.

Justin Toland is a European based contributing editor to PPI Magazine and the RISI community website and can be contacted at: justin@justintoland.com