Peter Meirs of Time Inc. and Pamela Russo, Vice President of Internet Marketing at Hachette Filipacchi Media. laid out the pros and cons of creating digital versions of print magazines, and showed how those editions can add value to their print parents even while digital circulation remains relatively small.

Cost is the biggest driver behind most digital magazine efforts, according to Meirs. The price of paper has increased by double-digit rates in recent years and postage costs have also gone up. In addition, an ever-accelerating news cycle makes the 48-hour delivery time for most magazines a growing competitive disadvantage.

Environmental concerns also play a part. "Environmental groups have put increased pressure on publishers as well as on our suppliers," Meirs said. "We're an industry that throws out three out of four products that we print for retail. And even though that's recycled, it's still a lot more energy that goes into producing that, so anything that's digital fits into that business case."

He pointed out that magazines now compete for reader's attention with many other media, including the Web, TV, video games and many other outlets.

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Beyond cost savings, digital editions offer new opportunities for global reach and increased frequency of publication. Not only are display technologies getting more economical, new readers are more willing than ever before to read on a screen.

"A new generation of readers is starting to emerge," Meirs said. "College students who graduate this month were born in the year the first Mac was launched, and these students grew up with a PC in their house. … They've been on the Internet since they were 12. … They're different."

Meirs pointed out a range of issues that need to be addressed before simply converting a print publication to a digital version. The digital rights to the intellectual property contained in a magazine, particularly photographs, may require revised contract terms or additional payments to the provider of material. In some cases, the copyright issues can be dealt with under the "collaborative work" provision of the Copyright Act of 1976, but that can be a risky course if all the legal requirements are not totally met.

Russo described how Hachette Filipacchi has taken advantage of digital editions since beginning its initiative four months ago. While relatively few subscribers will choose a full-priced digital subscription over a full-priced print subscription, the digital version is often effective as a "kicker" to get subscribers to sign up for the print version.

Russo's company has also experimented successfully with digital sample editions that are offered as a premium in connection with an e-mail marketing campaign, she said. Even though digital subscriptions are still a relatively small percentage of Hachette Filipacci's rate base, Russo said she expects an increasing trend toward digital editions.

"Consumers and advertisers will become more comfortable with digital as a medium," she said. "It won't be such a rarity."

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