The digital abode: Adobe Systems Incorporated (NASDAQ:ADBE)’s DPS
On Wednesday, Adobe (Nasdaq:ADBE) announced that 100M digital downloads have been delivered to customers and in a just over 24 months. These downloads include newspapers, magazines, corporate applications and publications, all that have been created with Adobe’s Digital Publishing Suite (DPS). Today’s top-tier publishers such as Hearst Corporation, Time Inc, Martha Stewart Living Omnimedia, Fast Company, National Geographic and Scientific American Rodale now use DPS to publish the digital editions of many of their publications. Tablet device use is only snowballing and brands such as Sotheby’s International Realty, U.S. Soccer, Renault and Stryker also use the DPS to power mobile applications for their brands.
The tablet generation
Researchers have shown that a third of adults in the U.S own a tablet. This opens up a big opportunity for corporate and traditional publishers to reach their specific audiences. Adobe is continuously in upgrade mode and the DPS enables brands and publishers to drive commerce, readership as well as customer loyalty. DPS’s latest features are designed to attract readers to purchase. Readers are able to view website publications and sample free articles within any issue. They can also have enhanced reading experiences on Android devices and iPhone 5.
Why go digital?
Going digital is a bold pricing maneuver. Typically, in the newspaper and book industries, digital versions are less expensive than print ones. Earlier, around 75% of their revenue was accounted for by advertising. This is one thing that has been on the decline. Magazines have been gravitating to digital editions for tablets in an effort to boost the circulation revenue. For decades, publications have offered subscription discounting and they now hope that going digital will offset it. Publishing digitally offers publishers the opportunity to position itself more strategically toward consumer revenue and reduce their dependency on advertising.
The price difference
One interesting turn is that the pathbreakers of the magazine world prefer to do things differently. They actually charge more for digital versions of their publications.
Time Inc, the biggest magazine publisher in the country, who publishes magazines such as the People and Sports Illustrated, sells print editions, digital editions, as well as print-and-digital bundles at the same price. They are placing themselves very smartly in the market where the average tablet reader is now richer, younger and more educated than your average magazine reader. No matter which way you look at it, Adobe (Nasdaq:ADBE) is still the winner.