Flipboard’s Revenue Model for the iPad? Share And Share Alike

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Having spent a load of time this week contemplating the bumpy relationship between Apple’s iPad and the magazine industry, it’s refreshing to read that the people at app-of-the-moment Flipboard have a business model that, on paper at least, should please all of the different constituencies involved in the fledgling digital magazine industry. (Flipboard, in case you haven’t heard, repackages the links shared by your social crowds into a pretty digital magazine for the iPad. It burned up a lot of servers last week, when it launched.)

In fact, Flipboard founder Mike McCue, really likes paper — Vogue, in fact. He told Business Insider in a must-read interview yesterday:

Ask someone who reads Vogue: “Imagine I have two different copies of Vogue magazines, they’re the same issue except one has ads and the other one doesn’t. Which one are you going to pay $5 for?” Everybody who reads Vogue wants the one with the ads.

Huzzah! Huzzah! So, the business plan is to work with publishers — and McCue says he’s heard from virtually all of the big guns — to make ads that appear within Flipboard as pretty as the ones in magazines, and split the revenue. This is just grand for several reasons — among them that publishers have been successful at charging CPMs which are several factors higher than average for Web-based ads that err more on the side of the splashy print experience than the boring online banner one. Secondly, since the magazine content that is displayed on Flipboard doesn’t require the user download — and pay for — the magazine’s own iPad app, the audience should be larger.

But what may be best about McCue’s approach to the publishing industry is his attitude. He told BI:

When we build our business model here, it’s not going to be on the backs of the publishers, it will be with the publishers—you know we’re going to make money with them not off of them.

Compare that to Apple, which is, in some instances, directing its (typical) take-it-or-leave-it attitude in its dealings with publishers. Whether Flipboard continues to take the iPad by storm or not, it demonstrates that there are other revenue streams in the iPad ecosystem that publishers will be able to dip their toe in. Even if one of them fails to deliver, others will. And that’s a relief.

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