The magazine industry is broken. We want to fix it. For magazines, stepping into the digital age has been difficult. In a time where users demand convenience and value for money, magazines have struggled to deliver against new and emerging digital platforms.
Going to the newsstand and paying £3.99 to buy a magazine just isn’t a viable option when other types of media, like music and film, are instantly accessible. The problem isn’t the content, it’s the delivery and the price point.
The current digital magazine offering is trying to tackle this but in essence it is taking a print model and forcing it into a digital format that isn't working. Downloading a digital magazine is a convoluted, cumbersome and comparatively expensive process.
These are barriers for the consumer and the core reasons for the sector’s continued slow decline.
ReadBug aims to deliver the best magazines for £9.95 a month. Think of it as a Spotify for magazines.
The subscription model offers a value proposition. It is proven that users are attracted to this model and greater revenues can be achieved through a larger user base.
By removing the pay wall barrier users have the freedom to read as much or as little as they like. At the point of engagement it feels free whilst still generating more attractive revenues.
Our aim is to:
• Provide a value proposition that chimes with the current digital landscape - think Spotify and Netflix.
• Blow consumers away with the convenience they demand by creating an accessible and easy to use platform.
• Deliver an exceptional, customised user experience that goes toe-to-toe with the best digital platforms out there.
We believe doing this will remove the barriers users face. In return we believe it will generate drive rapid user growth and unlock the true potential of the content.
Substantial accomplishments to date
• Raised 150% (£75,000) of our target through crowdfunding in under 5 days.
• Development of the ReadBug app (end of November completion date) with a three year feature deployment roadmap.
• Content agreements with six major publishers for our launch.
• Discussions with Vodafone to partner for a beta launch and commercial partnership as part of their data plans alongside Spotify and Netflix.
• Finalists for WAYRA accelerator, The Perfect Pitch, The Big App Fund, AdTech London’s The Next Big Thing, and semi-finalists at WebSummit’s PITCH.
ReadBug will cost the consumer £9.95 per month a price point that chimes with the current digital landscape (Spotify £9.99 / Netflix £5.99 / Kindle Unlimited £7.99).
This pricing structure grows the current average magazine spend from £36 per person per annum to £119.40.
Additional revenue streams would come from dynamically served targeted advertising and in-article e-commerce purchases.
Use of proceeds
ReadBug intends to use the proceeds of this round as follows over the next six months:
- 60% Marketing strategy
- 20% Further platform development
- 20% Operational costs
During the next six months we plan on refining our marketing and growth strategy and gaining critical user traction. We also plan to onboard the remaining key publishers and expand our library of titles.
After six months trading, and following current conversations we are having with institutional investment firms, we plan to have Series A funding locked in place to provide us with the capital to rapidly scale the business both domestically and internationally.
The story so far: http://readbug.com/blog/post_211114.php
Ultimately ReadBug is aimed at everyone, however during the beta and launch stage we will be targeting early tech adopters - working professionals who enjoy premium content.
They will have had subscriptions to print magazines in the past but will have failed to make the leap to digital magazines due to the analogue price point and lack of perceived value for money.
In addition they will have some form of online entertainment subscription like Netflix or Spotify and will be interested in web trends and new technology. They will have a tablet device and/or a smartphone and enjoy rich, immediate content.
As the business grows we expect the target market and age range to broaden out and diversify as we deploy our growth and acquisition strategy.
Characteristics of target market
The consumer magazine market is worth £2.8bn per annum in the UK and £50.2bn worldwide.
The magazine market has seen declining print revenues for the last few years. In 2012, digital revenue accounted for just 6% of total magazine revenue but will reach 16% by 2017.
By 2017 in the UK alone there will 35 million tablet users and 44 million smartphone users. We believe Readbug is ideally placed to capitalise on this huge growth of tablets and smartphone by combining an “all you can eat” subscription model with a user experience and interface that chimes with successful parallel platforms in the digital entertainment sector, like Netflix and Spotify.
Readbug’s marketing strategy is headed by Edoardo Cassina, former Head of Social Media Marketing at Yahoo. The strategy is focused around optimising growth through growth hacking, driving conversions and driving down our cost per acquisition (CPA).
Our strategy will focus on 5 key areas:
- Growth hacking lead by crowdfunding.
- Viral growth through PR, blogs and reviews.
- Social media - leveraging our user base by driving content sharing.
- Paid marketing - Advertising channels and paid PR.
- Commercial partnerships with companies like Vodafone and Evernote.
Our strategy will focus the initial marketing budget on this broad spectrum of channels specifically targeting the "early tech adopter”.
Initial testing of our marketing strategy through these channels has proved very promising. Our strategy will be to hone the most cost effective ways to maximise impact and reduce our cost per acquisition in order to demonstrate ReadBug’s huge scalability.
Having conducted an extensive global competition and SWOT analysis we have set out a clear strategy against competitors:
As a platform, ReadBug is uniquely placed in that we are the only service to combine the value proposition of the “all you can eat“ subscription model (similar to Netflix and Spotify), whilst delivering fully optimised digital content that can be consumed on any device - tablet, mobile and we're even looking into integration with wearables. We are also providing a unique user experience in the sector through our customised “Article Stream” that delivers individual articles to the user based on reading habits and our recommendation algorithm.
We anticipate that direct competition from bigger players like Apple Newsstand or Zinio will be limited through fear of cannibalising their current revenue streams. However, we realise that as consumer habits change so can existing businesses. This is why we believe that for ReadBug to be successful against potential competitors it will be vital for a continuous process of feature and platform development in the lean startup approach to ensure we provide the cutting edge in user experience, design, content engagement and perceived value.
To read more on the future of magazine engagement please check out this inforgraphic we created: http://readbug.com/blog/post_271014.php.