Maghound: Business Model Innovation in the Magazine Industry?
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Case Code: BSTR343 Case Length: 23 Pages Period: 2007-2009 Pub Date: 2009 Teaching Note: Not Available |
Price: Rs.400 Organization: Time, Inc. Industry: Magazine Countries: USA Themes: Business Model Innovation, Industry Analysis |
Abstract Case Intro 1 Case Intro 2 Excerpts
Excerpts
The Challenge
Maghound, Time's innovative online magazine distribution channel, was developed at a time when newspapers and magazines were showing a continuous drop in sales and publishers had failed to formulate any new channel that could boost the sales...
The Birth of Maghound
In such a scenario, where traditional channels of magazine distribution were deeply impacted by the Internet, Time started to look for an innovative way to market its magazine harnessing the power of the Internet...
The Business Model
Under the system, Maghound allowed readers to choose one subscription plan in a month and the magazine titles that they wanted...
Is Maghound A Viable Model?
Most analysts welcomed the new concept of magazine distribution developed by Time. While it allowed customers to pick and select from a wide range of titles at three different affordable package prices, it also did not carry the baggage of commitment to continue with the the same subscription throughout the period of the plan...
The Other View
Some analysts, however, said that more than anything, Maghound aimed to salvage Time's own flagship publications, which had been showing flat sales performance since 2006. Analysts debated over the viability of the Maghound business model and raised several issues in this connection...
The Company's Response
According to the company, cannibalization would not be an issue and competing publishers would also join the initiative as Maghound would be more concerned about its own bottom line and thus not play favorites...
Looking Ahead
While discussing the concept of Maghound, some analysts said that while it looked good theoretically, it was not really a practical approach, considering the long-term prospects. Though some analysts were skeptical about the sustainability of the business, most of them said that it was too early to write off the concept...
Exhibits
Exhibit I: The Maghound Logo
Exhibit II: Time Inc.: A Timeline
Exhibit III: Some Key Statistics about Time Inc.
Exhibit IV: Selected Financials of Time Warner
Exhibit V: A Brief Note on the Magazine Industry in the US
Exhibit VI: A Brief Note on Netflix
Exhibit VII: Other New Models for Selling Magazines
Exhibit VIII: Top Competitors of Time Inc.
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