De lights go out on SingTel’s e-mag store

SingTel’s magazine app store de!ite has become the telco’s first casualty among its digital offerings, shutting down less than two years after it was launched, BT has learnt. In response to BT’s queries, SingTel confirmed yesterday that the e-magazine store will be shuttered in June.

‘Following a review, de!ite will no longer be available from June 2012 while we explore alternative ways to offer digital magazines,’ a SingTel spokesman told BT.

The rolling up of the carpet had been in the works since earlier this year, when the magazine trade heard that de!ite would no longer be accepting new titles. Last week, another nail was driven into the coffin. One of the title owners received a termination letter for its e-magazine contract, which BT saw. The termination was to be effective 60 days from the date of the letter, which would coincide with the start of June.

As of yesterday, the de!ite app could still be downloaded on the iPad, with 42 titles available.

Launched in late-2010, de!ite had led SingTel’s charge into the app space as it sought to establish its cable-and-wire self in the ether of the digital realm. After de!ite was launched, other exclamation mark-bedecked and irregularly capitalised apps followed, like deF!ND and skoob – the book version of de!ite.

One of the publishers that used de!ite had found the experience wanting.

‘Some of their features, like the embedding of videos, didn’t work well. In an iPad magazine, even with a page-turner model, video ads should play within the magazine environment. However, when you embedded a video with de!ite, the reader would be taken out of the app and into a browser to play the video. That’s not embedding, as I understand it. And it’s disruptive,’ the publisher said.

The publisher noted, however, the de!ite had the best rates in town, in a time when its only competitor here was US-based Zinio.

While any costs incurred are bound to be but a smudge in the black ink of SingTel’s reserves, de!ite’s demise could have been a lesson in the brutal economics of online publishing.

A SingTel de!ite term sheet that BT saw gave the magazine title provider a 60 per cent cut of sales. de!ite also appears to use Apple’s in-app purchase mechanism for its app on Apple devices, which means that Apple could have taken another 30 per cent off copy sales, leaving a sliver of a margin for de!ite.

This 30 per cent levy has been a thorn in the side of other media behemoths – the Wall Street Journal and Amazon removed their in-app purchasing ability last year, while the Financial Times found a way around it by using an HTML5-based Web-only application, instead of a dedicated app.

Not all of the magazine trade is bad business. No one is sitting prettier in the e-magazine supply chain than Apple’s Newsstand, the wood-grained app on Apple devices that pulls together newspaper and magazine titles. According to a report by market research firm Distimo last month, Newsstand takes in US$70,000 a day on average from its top 100 titles on the iPad in the United States.

Its success is a partial reason for other e-magazine distributors’ failure. Newsstand creams 30 per cent off the top of magazine sales, before anyone else gets within sniffing distance.

This could sound the deathknell for smaller distributors that want to run Newsstand-based apps. BT’s sources say that an arm of a large publishing entity in Singapore has a magazine app that will run on Newsstand in the pipeline, but title owners are not giving it very good odds. This new service is offering title owners a 50-50 split of the remaining 70 per cent of sales that Newsstand lets it keep.

Effectively, title owners get only 35 per cent of the cover price if they go down this route – much less than the almost-60 per cent they get from hard copy sales and the 60 per cent that de!ite offered.

de!ite’s demise heralds a time when SingTel will have to face down corporations with which it previously had no quarrel, like Apple. Just last month, SingTel made its digital business a division in its own right, alongside its mobile business – a clear sign that it is quite prepared to return fire.