‘Spotify of magazines’ takes on Apple
Swedish company’s all-you-can-read offer is up against competition from global giant
Maria Hedengren wants Readly to be the Spotify of magazines — and believes her company can emulate its Swedish compatriot by fending off a charge into its territory from Apple.
For roughly the price of a Spotify music subscription, Readly users can flick through electronic versions of 4500 titles, from Cosmopolitan and Hello to Time and Wired.
The company, founded in 2012, is growing fast, with revenues up 50 per cent last year to 195 million Swedish kronor ($31.2m). But it faces a new threat from Apple News+, a similar service from the US technology group that has signed up magazines such as Elle and Grazia along with newspapers including the Wall Street
Journal, the Times and the Sunday Times.
“Apple has a lot of fans — I think you have to be paranoid about all kinds of competition,” Hedengren said. “But look how successful Spotify has been in competition with Apple Music.
“Having a player like Apple entering the industry also tells you how interesting the future is.” .
The global magazine sector, a US$74b ($117.6b) industry last year, according to PwC, has been stuck in a downward spiral, hit by dwindling advertising spending on print media but also struggling more than many parts of the media to come up with compelling digital products.
Marie Claire last month became the latest victim of the slump, with its final UK edition rolling off the printing press.
But the digital magazine market, worth US$4b last year, is growing, as several all-inone subscription services such as Readly try to tap the products’ intrinsic appeal while offering a sustainable business model.
“Look at Spotify and Netflix — those sorts of subscriptionbased all-you-caneat type services is what the consumer wants today,” said Ms Hedengren, who became Readly’s chief executive in April.
She joined from iZettle, where as head of finance she oversaw the Swedish payments start-up’s US$2.2b sale to PayPal last year.
While some online magazine providers offer access to individual articles, Readly users flip through PDF copies on their phone, tablet or computer.
It has launched in eight countries, with Sweden, Germany and the UK its largest markets.
The company, which does not publicly disclose its subscriber numbers or its valuation, raised €15m ($26.1m) in June from Swedish and British investors, including private equity group Zouk Capital.
The London-based private equity company said Readly was on “a path to becoming the European market leader in the space, with global opportunities beyond that”.
Readly distributes more than half of subscription revenue to publishers based on the interest their titles garner, offering a new revenue stream to an industry in decline.
Signing up to the platform offers other perks. The company has “very detailed behaviour data” on the articles people read, where on the page they stop and what ads garner the most attention.
“That is information that publishers could never have gotten in the print world,” Hedengren said. “We share this data with them because they use it to better their content and that, in turn, is good for us.”
Access to detailed reader statistics is what Hedengren believes will keep publishers with Readly as competition from global tech companies intensifies. “I have heard from publishers that Apple are very restrictive with the data that they share,” she said.
Apple declined to comment but the service’s privacy notice says it “may share” data with publishers to help them “understand the way users read their content”.
Hedengren would not rule out charging for access to data in future, saying her company was building “an extremely advanced data service”.
“Publishers can look at their own readers’ data but also benchmark themselves against other titles — that is something they have never had access to before.”