The pitch is simple and intuitive: All the magazines you want, delivered digitally to your tablet, for a flat fee of either $10 or $15 a month.

There are catches, of course, and we’ll get to them in a minute. But the thrust of what NIM and its publishers are trying to do here is heartening, because it shows that they’re willing to experiment, for real.

They’re keeping their core business model — curated bundles of content sponsored primarily by advertising. But they’re making a key concession by not requiring consumers to make a commitment to any particular title and letting them swap out magazines at will.

Not a coincidence: Two years after the iPad launched, consumers have only shown a mild interest in tablet magazines — digital represents just 1 percent of the industry’s circulation. Publishers need to do something.

Now, on to the catches. The good news is that most of these are solvable. The bad news is that there are a few, and for now, they’re big:

• The digital magazines require an app that will only work on Android tablets running Honeycomb. Next Issue says it will submit a version to Apple soon and hopes to have it available this summer. No word on Amazon’s Kindle Fire or Barnes & Noble’s Nook, which run earlier — and heavily modified — versions of Google’s operating system.
• You can’t get any magazine you want: Just 32 titles from the four magazine publishers in Next Issue’s joint venture: Hearst, Meredith, Time Inc. and Conde Nast. (News Corp., which also owns this Web site, is a Next Issue backer, but hasn’t put anything it owns into this offering.) That said, the list includes lots of the publishers’ best-known titles: Sports Illustrated, Fortune, the New Yorker, Vanity Fair, Esquire, Elle, Better Homes and Gardens, etc. Next Issue says it will add more “later this year,” and also plans to bring outside publishers into the offering.
• If you like reading magazines in both print and digital form, this offer won’t work for you. While publishers have recently started bundling print and digital subscriptions for the same price — essentially giving away digital in exchange for full-priced print subscriptions — these deals don’t include any print issues at all.

But for all of that, there’s plenty here to be optimistic about, whether you’re a magazine maker or a magazine reader.

Publishers have struggled to figure out how to take advantage of the iPad and other tablets, and for now they’ve ended up with something that looks and works almost exactly like a paper magazine, with a couple digital bells and whistles.

That’s not a terrible thing — some of the tablet issues work well, and publishers tell me they think they are selling them to new readers, which is a good thing.

But for two years there haven’t been many compelling reasons to pick up a tablet issue instead of a print one. Changing the basic subscription proposition, though? That makes things very interesting.

It’s also very much an experiment, which is the word every publisher I talked to about the launch used in the last couple days. “No one has done this before, and there are lots of practical reasons for that,” says Hearst’s John Loughlin, who oversees the publisher’s tablet efforts.

And publishers still have basic stuff to figure out, like how they’ll get paid for their titles. The rough idea is that they’ll get a share of revenue based on the amount of time consumers spend with their magazines, but they still need to hash out details.

The same goes for conversations about circulation and advertising. Right now, for instance, the magazines you read when you give Next Issue $10 a month (if you want monthly titles — if you want weeklies like the New Yorker, it’s $15 a month) won’t be counted in publishers’ official totals.

But all of that sounds good to me. It sounds like an industry ready to try some stuff and see what works. Just like all the start-ups that insist they want to disrupt it.

“Anybody that tells you that they have the answer, or that their model is the model that would be successful 5 years from now — they’d be suspect,” says Loughlin. “We’re very much in a learning mode.”

That’s the pitch for SkipIt, a new service from video ad company SpotXchange. The idea: Users set up an account, and when they play videos on sites that use the service, they can pay 10 cents a pop to skip over the ads.

Meanwhile, SpotXchange tells Web publishers it will pay them more than they would have received from the video advertisers if the pre-roll had played. And it says it will end up increasing the value of the rest of the publishers’ video ads, since users will only see the stuff they really like.

All of that sound unwieldy and unlikely to you? I think so, too.

Hard to imagine consumers pulling out their credit cards in order to skip a pre-roll. And while SpotXchange imagines that there will be lots of ways for users to earn SkipIt credits without actually spending their own money — another advertiser could give out freebies for watching one of their ads, etc. — simply registering for an ad-skipping service seems like an awful lot of work. After all, you could just look away.

In any case, this is likely going to be theoretical for lots of Web surfers. SkipIt is launching today on just a handful of sites, none of which are owned by big publishers. But SpotXchange says it has a deal in place with magazine publisher Meredith, so you should start seeing it on sites like Better Recipes soon.

And SpotXchange CEO Michael Shehan, who concedes that this is a work in progress, insists that there has to be an audience for some version of what he’s offering. “There’s a segment of people who will do a lot of work to not watch ads,” he says.

At the very least, SkipIt seems like another acknowledgment that most pre-rolls are clumsy and unpopular. YouTube and Hulu already let users skip lots of their pre-rolls with a single, free click, which they say increases the value of the ads you choose to watch. And last month we told you about Solve Media’s answer to the problem, which involves typing in a brand message in order to skip the ad.

Here’s a video from SkipIt that explains the service. You’ll note that there’s no ad before the ad:

[Shutterstock/Tom Sebourn]

When Amazon unveils its new iPad-like device on Wednesday, it will have the backing of at least three of the big magazine publishers: Hearst, Conde Nast and Meredith all have deals to sell digital versions of their titles on the new device, according to industry sources.

The notable standout, for now, is Time Warner’s giant Time Inc., which has yet to come to terms with Amazon CEO Jeff Bezos. A person familiar with negotiations suggests that a deal won’t get done in the next two days, either — “hopefully by the end of the year” was the guidance I got today.

Publishing sources say Amazon’s terms will roughly mirror the ones that Apple has established with most magazines this year: Publishers will keep around 70 percent of all Amazon sales, and the retailer will share some customer data with the publishers. The deals aren’t cookie cutter replicas, however, and in some cases Amazon may take a little more or less than 70 percent, depending on the title and the customer offer.

It’s worth noting that Time Inc., the likely holdout for Wednesday’s launch, has yet to completely embrace Apple’s subscription terms as well. The publisher sells individual titles through Apple’s App Store but has yet to strike a deal to sell subscriptions directly from the platform.

Industry sources say publishers have tailored some of their titles for the seven-inch tablet that Amazon plans to unveil on Wednesday, with the expectation that the company will roll out a bigger version that is closer in size to the iPad next year. Both tablets will use Google’s Android operating system.

The publishers who are on board with Amazon view their decision to link up as a no-brainer: They want more distribution channels for their stuff, not fewer. And they’ve been begging, unsuccessfully, for a credible competitor to the iPad since April 2010.

There’s no guarantee that Amazon will be one either, of course. But if you’re going to try to sell stuff, it doesn’t hurt to sell it through the world’s biggest e-commerce platform.

“You’ve got beauty and design with Apple, which we love,” says a publisher who has an Amazon deal. “But with Amazon you have marketing, and ease of use. We’re very optimistic.”

And Amazon has another compelling reason for publishers to join up: It’s already a huge partner for many of them, as a marketing platform for their ink-and-paper titles. Hearst and Amazon spelled out that relationship in a press release earlier this month, which noted that “Amazon will become Hearst’s single-largest third-party seller of print subscriptions for its magazines via digital channels.”

Starting Wednesday, some Samsung Galaxy tablet users will be able to buy app versions of seven magazines, as single copies or monthly subscriptions. The deal comes via Next Issue Media, the “Hulu for Magazines” consortium five big publishers put together to build their own digital newsstand.

This is a cautious first step, with lots of caveats, and Next Issue is taking pains to play down expectations, calling it an “early preview.”

And by my calendar, it’s a bit behind Next Issue’s previously announced plans to have something in the market early this year.

But it’s still something. And you could argue that while the digital magazine market formally kicked off last year when Apple introduced the iPad, it’s been moving pretty slowly since then. So Next Issue really hasn’t missed that much.

Details:

• Four of the consortium’s partners are selling titles: Esquire and Popular Mechanics from Hearst; Fitness and Parents from Meredith; the New Yorker from Conde Nast; and Fortune and Time from Time Warner’s Time Inc. News Corp., the other partner, doesn’t publish any print magazines (they do own this Web site, though).
• Prices are set by publishers, who will be able to offer existing print subscribers free digital editions. For now, though, they can’t offer new subscribers print + digital bundles like the ones that Conde Nast has started selling via iTunes. Next Issue CEO Morgan Guenther says that’s coming, along with the possibility of more interesting offers, like Netflix-style subscriptions that let customers swap titles in and out.
• The titles are only available to Galaxy owners who have bought a model with wireless service from Verizon, which sells the titles through a single app available in its Vcast app store.
• Next Issue plans to offer more magazines, on more devices, in the fall. CEO Morgan Guenther says that by the end of the year the consortium will be selling at least 40 titles, and should also have a version of its app available for HP’s WebOS.
• Apple gives publishers 70 percent of each transaction, and Guenther says magazine publishers will get “at least” that much; device-makers or carriers will split the rest with the consortium.
• Crucially, the publishers will get full access to all subscriber information, including credit card numbers. Apple won’t do that.

Again, these magazines will only be available to a subset of a subset of Android tablet owners, which isn’t that big a market to begin with, for now.

But it is a working demonstration of the concept the consortium promised way back in 2009: A single place to get magazines from multiple publishers, controlled by the publishers themselves.

And theoretically, selling magazines on the terms they want on Android will give the publishers more leverage to get what they want from Apple. But they’re a long way from getting Steve Jobs to back down from his terms–let’s see how sales play out on the two different platforms first.

Now it does. The JV has appointed Morgan Guenther to the post. Who?

From the press release:

Mr. Guenther served as Chairman and Chief Executive Officer of AirPlay, a wireless entertainment services company. Prior to this position, he was with TiVo Inc., as President from 2001 through 2003 and before that as Senior Vice President of Business Development and Revenue Operations. Mr. Guenther sits on several other technology company boards and is also a former partner at Paul Hastings Janofsky & Walker LLP.

John Squires, the Time Warner (TWX) executive who helped spearhead the JV last year, had openly campaigned for the job. But outside of his former colleagues at Time Inc., most magazine executives assumed he wouldn’t get the gig, for whatever reason.

Bob Sauerberg, the Condé Nast distribution exec tasked with speaking on behalf of the JV partners–Condé, Time Inc., News Corp. (NWS), Meredith (MDP), Hearst–explains the group’s choice with…delicacy. Squires brought “huge enthusiasm” to the job as an interim leader, he says. But “as we now head into execution, and working through how to do it, we felt that Morgan…was the right guy.” Etc.

It is worth noting that Guenther will be based in San Francisco, which is on the other side of the continent from his corporate backers, but is presumably next door to all the tech companies the JV will have to deal with. So that’s encouraging.

The discouraging part: The market for this stuff is moving very quickly, and the JV doesn’t seem to have moved at all for the past six months.

Not true! says Sauerberg: Squires, along with consulting firm Oliver Wyman, has been studying the market, and those findings are supposed to be presented at an industry conference tomorrow. Publishing sources also tell me that the JV has done some actual technical work as well, though it’s unclear if we’ll ever see it.

Okay. Here’s the bigger issue: Even in the best-case scenario, this kind of media joint venture works only if the partners behind it try really, really hard to make it work. Hulu itself is a great product, but that JV is now struggling to balance the competing interests of its network TV owners.

And in this case, it’s unclear whether Next Issue Media’s owners really believe they need a single aggregator to market and distribute their stuff, a la iTunes in music and Hulu and YouTube for video.

Most telling point: Next Issue Media doesn’t have exclusive rights to distribute its partners’ stuff, as Hulu does. That is: Any publisher is free to set up its own deals with Apple (AAPL) or Amazon (AMZN) or anyone else.

So you can very easily imagine a scenario where Steve Jobs or Jeff Bezos applies leverage to cut a separate deal with Time or Condé, etc. And once that starts happening…well, you can see how this one could play out.

Perhaps Squires was lucky not to get the gig.

There is an information-free press release at the bottom of this page, but the story is more or less the one I’ve been telling you about for a couple months:

• Time Warner’s (TWX) Time Inc and four other publishers–Condé Nast, Meredith, Hearst and News Corp. (NWS)–will be equity partners in the JV.
• For now, Time Inc. digital boss John Squires will run the unnamed JV, which is conducting a CEO search, and he would like the job on a permanent basis.
• The JV may take on other strategic or financial partners, though Squires thinks it can go forward as is without worrying about antitrust issues.
• All of this is conceptual at this stage; the companies now need to go about the business of actually assembling technology that will let them do this.
• All of those digital products that the JV’s publishers have been showing off–Condé Nast’s digital reader, built with Adobe (ADBE); Time Inc.’s mock-up of a digital magazine, etc.–are all well and good, but Squires thinks that eventually the JV will need to settle on a single standard. That’s one of the main points, really: “One would imagine a sort of common publishing infrastructure, because we don’t want to spend money five different ways.”

Some people don’t like my description of this as “Hulu for Magazines,” but let me spell it out for them: Like Hulu, this is a joint venture of content owners that is designed to control distribution and sale of their product instead of ceding that to digital powerhouses like Apple (AAPL) and Amazon (AMZN). Easy to understand, right?

The question is: Will Apple and Amazon, in particular, let others control the sale of digital media to their devices via Apple’s and Amazon’s storefronts? Publishing executives I’ve talked think that Apple may end up being receptive to the idea, but Amazon is clearly going to be a problem.

Squires notes hopefully that Amazon already lets publishers sell physical magazine subscriptions via the retailer, but that’s meaningless: Amazon has clearly designed the Kindle and surrounding infrastructure to be an end-to-end experience, and so far, the company has been able to get publishers to play along. But if Squires’s JV ends up working as planned, publishers will have enough clout to set their own terms.

LEADING PUBLISHERS FORM VENTURE TO OFFER CONSUMERS NEW DIGITAL STOREFRONT AND PORTABLE READING EXPERIENCE

Initiative Will also Offer Marketers Rich Array of Innovative Advertising Opportunities

New York, NY, December 8, 2009 – Condé Nast, Hearst, Meredith, News Corporation and Time Inc. today jointly announced that they have entered into an independent venture to develop open standards for a new digital storefront and related technology that will allow consumers to enjoy their favorite media content on portable digital devices.

The goal of this digital initiative is fourfold, to create: a highly featured common reading application capable of rendering the distinctive look and feel of each publication; a robust publishing platform optimized for multiple devices, operating systems and screen sizes; a consumer storefront offering an extensive selection of reading options; and a rich array of innovative advertising opportunities.

Beyond the publications of the equity partners, the venture will welcome other publishers to offer their content via this new digital platform. Publishers will derive revenue from content and advertising sales, as well as from print subscriptions.

“For the consumer, this digital initiative will provide access to an extraordinary selection of engaging content products, all customized for easy download on the device of their choice, including smartphones, e-readers and laptops,” explained John Squires, the venture’s interim managing director. “Once purchased, this content will be ‘unlocked’ for consumers to enjoy anywhere, anytime, on any platform.”

For publishers and advertisers, the venture will offer an attractive, cost-efficient, consumer-focused environment. Advertisers will be able to utilize innovative formats that benefit from the highly engaging, interactive nature of this new medium. In addition to entirely new magazine and newspaper reading experiences, content selections may ultimately include books, comic books, blogs and other media.

For the hardware, software and retail industries, the initiative will provide dynamic new business opportunities by organizing a library of quality content with a common format and technical specifications. The venture partners represent an unduplicated audience of 144.6 million according to Mediamark Research & Intelligence (MRI).  By the end of 2010, Forrester Research estimates that 10 million e-readers will be sold in the U.S., and according to m:Metrics (comScore), there will be over 50 million smartphones in the U.S. by the end of 2010.

The show part will work better than the tell, and the Time Warner (TWX) unit will be releasing some photos and videos that I can embed later in the day. But for what it’s worth, the demo looks as nifty as, and quite similar to, what Condé showed off. Except that in this case, I actually got to play with it for a couple minutes, and it was quite a bit of fun.

UPDATE Here it is:

Both publishers are thinking along the same lines. They imagine that their digital magazines will replicate the print version, including advertising, and will include add-ons like multimedia and links to the Web.

But they’re supposed to be distinct–and more valuable–than simple Web versions of magazines, and both publishers expect consumers to pay for them.

“Nobody reads the magazine on the Website,” says Sports Illustrated editor Terry McDonell. “That’s a firehose. This is the opposite of a firehose.”

One distinction between the publishers is that Condé has aligned itself with Adobe (ADBE), which is working on software to create e-editions and reader software to consume them. Time Inc.’s take is more conceptual: It worked with design shop The Wonder Factory to build a prototype, but isn’t committed to any particular platform.

This may mean Time Inc. will need more time to get the magazine ready for consumption next year or it may mean the publisher has more flexibility than Condé and Adobe. Given that magazine-friendly e-readers don’t exist yet, this is all sort of vaporware for now.

On a related note, the “Hulu for Magazines” joint venture I’ve been telling you about for a couple of months may finally be ready to step out in public next week. Though as I’ve noted, I’ve been hearing that for many weeks.

Still, the broad strokes seem set: Time Inc., Condé Nast, Meredith and Hearst–and perhaps News Corp. (NWS)–are creating a separate company designed to let them sell and distribute their digital editions, regardless of platform.

It’s not clear if News Corp. (NWS) will end up investing in the joint venture, which is designed to control distribution of “print” content to readers like Amazon’s (AMZN) Kindle and Apple’s (AAPL) rumored tablet, or if the company will simply agree to tailor its stuff–most notably, The Wall Street Journal–to the joint venture’s standards.

In either case, News Corp. has yet to officially sign on, sources tell me. An announcement formally acknowledging the JV itself is supposed to be a couple of weeks away, though I have been hearing this for at least six weeks.

No comment from News Corp. or Time Inc., the Time Warner (TWX) publishing unit that has been assembling the JV. Other expected partners include Hearst, Condé Nast and, perhaps, Meredith. (Disclosure: News Corp. owns Dow Jones, which owns this Web site.)

In some ways, News Corp. is an obvious partner for the coalition, which I like to call “Hulu for magazines.” Murdoch has been an outspoken critic of Amazon’s distribution and pricing policies; he argues that by controlling the subscription of digital newspaper and magazines delivered through its e-reader, Amazon deprives publishers of a valuable asset.

Murdoch also wants more money for the stuff it does sell: In an earnings call last week, he said that while the bookseller was now paying his company up to $6.50 a month for each $15 monthly subscription to The Wall Street Journal, that split wasn’t good enough.

The JV is supposed to solve those problems for publishers by letting them control sales, customer billing and pricing. But it is also primarily designed with magazine publishers in mind, and News Corp. isn’t in that business.

Meanwhile, New Corp.’s Dow Jones unit is proprietary about the system it has already built to handle subscriptions to the Journal’s print and online editions and its BlackBerry and iPhone apps.

While it’s possible that the JV could use the Dow Jones subscription/commerce platform as the technological base of the JV, Dow Jones could be prickly if asked to play well with others. “Newspapers and magazines, don’t mix well, for reasons that aren’t obvious to the outside world,” says a News Corp. executive briefed on some of the company’s conversations.

In any event, balancing different partners’ interests is only one of the hurdles facing the JV. Some others, from the story I published last month:

• They’ll have to convince consumers who already have billing relationships with Amazon, Apple and other vendors to sign up with yet another service.
• They’ll have to convince device makers to play along with the strategy, which runs counter to many of their own plans. Both Amazon and Apple, for instance, have intentionally created closed systems that give them control of both devices and distribution.
• They’ll have to create content consumers want to buy. The new product can’t simply be a digital version of the magazines they’re already printing: That’s already available on the Web, and consumers have shown almost no interest in paying for it, and advertisers haven’t fully embraced it either.

So what exactly will the JV be selling? That’s probably the most difficult question for publishers to answer, made even more difficult because they don’t know what capabilities the e-readers of the future will boast. Apple for instance, refuses to even acknowledge to Time Inc. executives that it plans to produce a tablet device, let alone provide them with specs.

The latest unpleasant news comes from magazine heavyweight Meredith (MDP), which does its best to explain that things aren’t that bad: Two of the publisher’s big titles–Better Homes and Gardens and Family Circle–saw ad revenue grow in the last quarter, and the company says its magazine unit notched its “third consecutive quarter of advertising performance improvement.”

That sounds good, right? Except that magazine ad revenue still dropped five percent compared with the same quarter a year–and last year’s quarter was a terrible one in which ads dropped by 18 percent.

More data points to watch for in the next few days: The Washington Post (WPO), which reports tomorrow, and Time Warner (TWX), due up next week.

What prompted Time Inc. to drop six percent of its staff?

Time Warner (TWX) won’t release its most recent quarterly results until next week. But you can get a pretty good sense of how its publishing unit has been doing by looking at the numbers that Iowa-based magazine giant Meredith Corp. (MDP) just released.

And it’s grim.

Revenues at Meredith’s publishing unit, which puts out titles like Better Homes and Gardens and Ladies’ Home Journal (that ad above is from a 1972 issue) dropped nine percent in the last year, to $300 million. But ad revenues fell much more steeply, dropping 18 percent to $148 million. And operating profit plummeted 40 percent, to $33 million.

The good news in the earnings release is that there are still operating profits. But these are worrisome results.

So far this year, most of the ad-based businesses that have complained about declining revenues have pointed to weakness in the financial and auto industries. But Meredith’s publications don’t rely on those sectors for their ads.

From the release:

Companies that operate in Meredith’s endemic advertising categories–including food and beverages, prescription and non-prescription drugs, and home–have been impacted greatly by the current economic downturn. Combined, Meredith magazine advertising revenues in these categories declined over 25 percent in the first quarter, according to Publishers Information Bureau (PIB).”

Not surprisingly, Meredith says that the current quarter looks depressing too. Publishing ad revenues are “down in the high teens” it says.

So, don’t be shocked to see equally lousy news from Time Inc. next week.

[Image Credit: jbcurio]