Fortune Changes IPad Strategy, Introduces 'Freemium' App Edition

Nonsubscribers Gain New Opportunity to Sample -- and See Ads

Fortune is introducing today a new iPad edition that presents readers with a visually appealing mix of free and paid content, an effort to make the app worth swiping through even if you're not a subscriber. Fortune's iPad app, like those of most magazines, had previously opened to a storefront -- offering nothing to see until you open your wallet or show that you already subscribe. Fortune's new iPad edition will give readers a mix of free and paid content. The prior version, like most magazine app editions, had opened to a store. "Most of the industry has little or no contact with the consumers who have downloaded the shell but have elected not to become regular issue buyers or subscribers," said Jed Hartman, group publisher for Fortune and CNNMoney.com. "This creates a dialogue and relationship with them." Exceptions to the storefront-first approach, such as The Atlantic, are rare. And Fortune, part of Time Inc., is trying to better integrate the paid and unpaid content than others that have tried something similar. Fortune hopes people who spend time with the app under its "freemium" strategy will convert into paying subscribers. But nonpaying readers also create a new opportunity for Fortune to serve up ads. The initial sponsors are Credit Suisse, Ally Bank and Brocade. The app will continue to include all the ads from the print edition as well. The free content will include articles from Fortune's blogs as well as video from its many events, photo galleries and other material. "The tablet is a true product of convergence, converging video, the browser experience, social, books, magazines, search, all on one device," Mr. Hartman said. "However, our product had really still been the magazine with enhancements. Instead we're going to market with a product that converges all of Fortune's assets to one completely seamless 24/7 product where the magazine will live inside." The paid digital circulation of magazines is growing quickly but remains a very small proportion of their overall business: about 1.7% of total circulation in the first half, up from less than 1% a year earlier, according to the Audit Bureau of Circulations.
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