Tucked away in a corner at the Austin Convention Center this week is a tiny Hewlett-Packard subsidiary that could be a godsend for publishers and direct markets who are seeing their print businesses shrivel. But MagCloud may not see the opportunity before its own eyes.
MagCloud is an experiment by HP, which is the world’s largest computer printer maker, to see if its technology can scale up into the micro-publishing market. The service uses laser printer technology to produce magazine-quality publications in volumes ranging from one to about 3,000 units, which is the threshold at which offset printing becomes more cost-efficient. A lot of companies provide similar services in the self-published book market, including Lulu, Issuu, Blurb and CreateSpace. However, MagCloud is alone in its market at the moment. The curious thing is that HP is targeting MagCloud at the wrong market. It’s selling the service to small-market publishers and missing the much bigger opportunity with major publishers and advertisers.
MagCloud offers some impressive benefits. Users upload PDF files and MagCloud publishes the contents as saddle-stitched magazines on a nice matte paper stock The samples at the company’s South by Southwest booth, including Broadway (above) are beautiful. MagCloud also hosts a virtual newsstand where visitors can buy issues for shipment by US mail.
Publishers can charge whatever the market will bear for their work. MagCloud bills 20 cents per page with volume discounts. So a 48-page magazine comes in at a little under $10 quantity one. Publishers can keep the difference between what they charge and the production/shipping charges from MagCloud.
Small Market Focus
That’s fine, and a very small number of consumers will be willing to pay $15 or $20 for a custom-published magazine. The much bigger opportunity is to take advantage of the customization potential of digital printing to apply the technology to mainstream publishing and direct marketing:
- Direct marketers could conduct A/B testing in small markets to identify their most effective messages before rolling out printed mailings on a large scale;
- Publishers could produce targeted editorial supplements to small audiences, such as art or gourmet food enthusiasts, and sell premium-priced advertising against them;
- Newspapers could produce customized coupon packages to address targeted segments. For example, subscribers could elect to receive bound circulars containing coupons only for sporting goods in their immediate geographic area.
MagCloud should also be working to exploit the inherent advantages of digital printing to produce publications customized to individual subscribers. This could make print publishing exciting again. Imagine if consumers could:
- Receive a monthly magazine with their name on the cover, profiles of their favorite sports stars in the pages and coupons from only the merchants they patronize in the ad well?
- Get magazine customized with their names on the cover and photos of their kids in the center spread?
- Receive annual calendars with the photos selected from their Flickr photostream?
- Fill out a form to receive a quarterly food magazine with recipes tuned to their favorite ingredients?
This kind of customization is possible right now. The only issue is finding someone to pay to develop it on a large scale. Publishers have every incentive to find ways to get their advertising customers excited about print again. It seems that MagCloud could be an opportunity to do that. Will someone contact the people at HP and educate them about the opportunity they’re missing? Or perhaps MagCloud will contact us to tell why it doesn’t see an opportunity there.
This entry was posted on Monday, March 15th, 2010 at 5:32 pm and is filed under Advertising, BusinessModel, NewMedia, Solutions. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.