Three former Wall Street investment analysts—Ryan Klenovich, 24, Jian Chai, 26, and Steve DeWald, 24—plan to save the magazine business with a Web site called Maggwire.com.
“We’re going to do for magazines what iTunes did for music,” Mr. Klenovich, the start-up’s chief executive, told The Observer in an interview.
Currently a free aggregator of magazine articles from more than 650 publications, separated into channels like “Politics” and “Entertainment,” Maggwire.com will soon offer a premium service—one that Mr. Klenovich thinks could have a significant impact on the industry.
“The biggest threat to magazines is not competition from within the market, but with other forms of media,” Mr. Klenovich said.
Here’s the pitch: Offer users a year’s subscription to a “channel” where they can get premium magazine content from a series of relevant magazines, for, say, $1.99 a month, with an additional 99 cents per magazine that they want to add to the package. The publishers would keep 75 percent of the profit, and Maggwire would get the rest.
“The pricing has to be inexpensive to get users to adopt this in mass numbers,” Mr. Klenovich said. “That’s how iTunes became so successful at first—because the pricing was simple,” at 99 cents apiece for most songs.
Creating a specialized “iTunes” for every form of media content, from MP3s to professional movie clips to DVDs, is hardly a new idea. Steven Brill cooked up Journalism Online to rescue newspapers. Time Inc., Hearst and Condé Nast are reportedly working on creating their own digital store that would offer material compatible with the slew of e-readers soon to hit the market. But none of the companies have confirmed or gone public with their projects.
Mr. Klenovich said the trio left Deutsche Bank in July to start working on the site full time. They raised a round of financing from family and friends and colleagues, and are currently meeting with “major players” in the publishing industry. At the moment, though, most magazines are staying hush-hush about a possible partnership. Representatives from Condé Nast and Hearst did not return messages to The Observer by deadline to confirm or deny any talks with Maggwire.
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