MAGASTORE will launch first on the iPhone
One of Japan’s most powerful companies, Dentsu, is trying to extend its control of traditional media to the mobile arena with a new application that will force users to pay for online magazines and maintain its dominance over their ad space.
For years the advertising behemoth has been sitting pretty, thanks to its near-monoploy over media buying and the commissions that go with it. Last week, Dentsu announced the launch of MAGASTORE, a downloadable app that will sell access to magazines on mobile phones.
In fiscal 2008, the digital publishing market was estimated at ¥46.4 billion (US$500 million), up ¥10.9 billion from the previous year. Of that, mobile publishing accounted for more than ¥40 billion, according to research by Impress Holdings. Digital comic books are selling especially well, thanks to improvements in cell phones, with larger screens, faster Web access and simpler billing systems.
MAGASTORE, a collaboration with mobile software provider YAPPA Corp., will begin as an application for the iPhone on the Softbank network this summer, and later be made available to other handsets and carriers. After downloading the application, users can purchase magazines and store them to read anytime. Users will pay ¥115 to for the application and then ¥115 to ¥600 per magazine.
YAPPA has made one-off solutions for magazines in the past, such as Shufuntomo’s éf magazine. But Dentsu’s bundled app will be cost-effective for publishers. They will get access to viewer data as well as an online settlement system and, according to the company, “a new advertising solution combining the characteristics of magazine contents and the technology of mobile advertising.”
Among the publishing houses that have signed up for MAGASTORE are Asahi Shimbun, Fusosha (Numero, Spa!), Condé Nast Japan (Vogue, GQ) and a host of niche publishers of titles about everything from skateboarding and kimono to salt-water fishing.
The control of content by powerful corporations remains solid in Japan, even in mobile, where providers like DoCoMo and KDDI strictly control who gets access to users’ menus. (The App Store model developed by Apple for the iPhone fits nicely with this strategy.) When it comes to the question of whether online content should be free or paid, Japan clearly veers toward the latter. Consumers don’t expect mobile content to be free, and by the same token are more willing to pay for it.
Although the list of participating publishers in MAGASTORE is by no means comprehensive at this stage, Dentsu’s intention seems clear: to control the mobile publishing market by controling the delivery system, its model in print and television for decades, and one that has served the company well, if not the consumer.