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Company Gravitates Into Digital Distribution of Magazines and Finds Success as Use of Mobile Devices Expands

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Sometimes a business is started simply because the founding entrepreneurs crave the independence and enjoy the work. Financial success, however, takes a circuitous route because an operation may change into a new company as events unfold. This is the experience of Ryan Marquis and Mark Stubbs.

The duo started PixelMags in 2009 by pitching the company to magazine publishers as an app developer. Smartphones were gaining attention and publishers were eager to provide digital content to the mobile market. The effort was stifled by difficulty explaining the concept of digitizing a magazine along with too many app developers in the market. So, the new venture changed its focus into a digital content distributor. This was more familiar to magazine publishers because they already dealt with distributors who found retail shelf space for their paper publications.

Early relationships were with UK publishers, where Stubbs was located. A roadshow attracted several magazine publishers based in the US, where Marquis lives. PixelMags also attained agreements with some major retailers for digital catalog content distribution.

PixelMags become one of the first companies to put magazines on the iPhone. When Apple introduced its Newsstand feature in 2011, PixelMags became a provider for much of the digital content desired by magazine subscribers. Apple Newsstand organizes and accesses magazine and newspaper subscriptions on iPhones, iPads, and iPod Touch. The result was greater consumer awareness of the ability to read magazines on mobile devices.

When Newsstand launched, PixelMags had already provided digital distribution on Apple products for two years. The company transferred all the content from its publishing clients into the new Apple format. A few months later in 2012, PixelMags supplies about 20 percent of the content on Newsstand. Since the start of Newsstand, users downloading PixelMags content has expanded from 2 million to 32 million. According to Marquis, PixelMags is acquiring 300,000 new users per week.

Magazines are reporting that digital subscriptions are increasing their circulation and revenue. Because PixelMags operates on a revenue share model, more ad revenue for magazines means profit for Marquis and Stubbs. Expansion beyond Apple devices is next on the companyā€™s agenda. PixelMags expects to have content soon on Kindle Fire and some Android devices. The company started with a business model for app development. But, now that PixelMags has found its niche, the company remains focused only on digital distribution of magazines.