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Newsstand – Profile

July 20, 2004

newstand logo.bmp
HQ: Austin, TX
Founded: July 1999
Management: Plenty of grey hairs on the team but nobody who has spearheaded truly breakthrough ventures.
Investors: Company raised a $7.2M Series D round in June 2004 from Adams Capital Management (Lead), New York Times, Noro-Moseley Partners, and SSM Ventures. The company has raised a total of $23M+.
Business Model: Newsstand creates exact replicas of newspapers and magazines then sells digital subscriptions via the publishers’ sites. Readers download Newsstand’s proprietary reader. Publishers benefit from potential increases to their audits and subscribers get the look-and-feel of print versions. Newsstand probably has the biggest stable of publishers in the sector. The company has recently taken a step in the right direction by releasing a browser-based version.
Competitors: A surprising number of players here chasing good publisher interest, but weak consumer uptake. They include: Zinio, Olive Software, Qmags, Newspapers Direct.
Additional Dirt: The great thing about consumer companies is that the ugliness is there for everyone to see. Check out Slate’s skewering of Newsstand and Zinio. It’s amazing that Newsstand has been in business for 5 years and this is as good as it gets. In 2 years, the New York Times has sold only 4K subscriptions to its Newsstand offer. Consumers seem to be saying that they are more than happy with the free NYTimes.com and don’t want to pay a subscription and then download the software. Hard to imagine that this company would still be around if it weren’t for the NY Times’ coddling.

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