By paulgillin | March 15, 2010 - 5:32 pm - Posted in Advertising, BusinessModel, NewMedia, Solutions

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.

Broadway Magazine, produced by MagCloudMagCloud 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.

Comments

comments

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.

6 Comments

  1. March 16, 2010 @ 12:55 pm



    Hi Paul,

    Andrew Bolwell, Chief MagClouder here. Contrary to your invitation, I’m actually writing to agree with you 🙂 Like you, we think there’s a great opportunity for mainstream publishing to utilize a publish on demand platform like MagCloud. By way of a few examples, LIFE.com (a Time Inc company) is using it to bring back special reprints of commemorative issues with current appeal (e.g. 40th anniversary of Woodstock http://magcloud.com/browse/Issue/25201 ), The Atlantic are using it to publish special editions (e.g. a special retrospective edition of their recent Brave Thinkers issue http://magcloud.com/browse/Issue/38986 ), and Variety also just published an Oscar 2010 special edition (http://magcloud.com/browse/issue/63376 ). And on the custom magazine front, Wikia are using it to allow their users to create a custom print magazine using their favorite Wiki content (http://www.hp.com/hpinfo/newsroom/press/2009/091021xb.html ). We are also just about to launch a feature that allows users to create awesome looking print magazines directly from their Flickr content. And these are just a few of the many, many publishing uses cases, both old and new, that people are using MagCloud for. Who said the print magazine was dead? Seems to be very much alive and kicking from where I’m sitting, and we’re just happy to be part of it. Glad you appreciated the quality of the magazines we had on display at SXSW. They were largely chosen to reflect the interest of the audience at the event.

    —Andrew Bolwell, Director of HP’s Imaging and Printing Business Incubations

    Posted by Andrew Bolwell
  2. March 17, 2010 @ 9:29 am



    I’m not sure you got the point of my comments. Small run special editions are fine, but your real opportunity is in personalization. I spoke to your rep at the conference, and asked if I could send you a database of my customers with profiles of their content preferences and have you publish magazines customized to their interests. She said that wasn’t possible right now. I hope it’s something you’re working on, because publishers should be beating down your door to get capabilities like that. Personalized additions for audiences of one have been the holy grail for years, but the cost of offset printing has been prohibitive. You guys may have cracked the code and should be running full speed to commercialize it, IMHO.

    Posted by paulgillin
  3. March 18, 2010 @ 8:09 am



    I believed in Magcloud, but they have a long way to go. They are slow, have no phone number to contact and are not quick to reply to e-mail inquiries. I placed an order three weeks ago and have yet to receive it. E-mail to company went unanswered. Shows as unshipped in order history. If I do a monthly magazine, what is the point if it takes a month to receive the last issue. I am going to look into a chargeback on Monday if I don’t have a reply.

    Posted by Todd McPhee
  4. March 20, 2010 @ 5:55 pm



    Todd, if you can email me your order number or MagCloud username (to andrew dot bolwell at hp dot com), I’ll look into this for you and follow up. I’m not sure what went wrong here but I apologise that you’ve having trouble. We are very focused on customer service and on-time delivery of orders. Orders will typically print and ship within 2 busness days, so I’ll make sure we look into what went wrong here and resolve it immediately for you. —andrew

    Posted by Andrew Bolwell
  5. March 23, 2011 @ 11:59 am



    Magcloud is great! I’ve ordered several mags from Magcloud and they’ve always arrived timely!

    Keep up the fantastic work!!!

    Posted by Perez
  6. April 2, 2011 @ 11:25 am



    For the 5th time in a week, magcloud is down and the pages are just blank.

    Maybe server issues?

    Good idea – fails at delivery – overpromises and underdelivers

    Posted by Liz