Tablets, with their larger touchscreens that are less cumbersome than laptops, have been shown to lend themselves naturally to long-form content consumption, and that is spawning a new breed of services to fit the bill. One of those is Paris-based LeKiosk, a digital periodical “stall” that has now closed a Series B round of investment totalling $7.1 million to grow its business across Europe.
The funding comes from CM-CIC, the investment arm of Credit Mutuel and investor in Deezer and Spartoo; and FSN PME CDC Enterprises, a French government investment fund. Prior to this, LeKiosk had raised $3.8 million in a Series A round from private investors and French investment funds Sigma Gestion and Promelys.
LeKiosk’s ambition is nothing short of wanting to become the Spotify of the magazine world.
It has seen some good traction in that effort: in its home market of France, it was the highest-grossing iPad app in the country in 2011.
Unlike Apple’s NewsStand, which offers magazine and newspaper apps, LeKiosk focuses on digital versions of physical magazines, something that may mean less interactivity in the magazines themselves, but on the other hand gives LeKiosk a chance to attach an actual pricetag to each piece of content (it’s usually the same as the news-stand price).
No freemium models here: In contrast to apps or content that looks like it’s from the web, “When we sell print content more people understand why they should pay,” says Michael Phillippe, co-founder of LeKiosk. Magazines come from leading publishers like Conde Nast, Dennis and the BBC. Also unlike the NewsStand, LeKiosk works across all major platforms, from iOS and Android and desktop, and is currently developing a Windows 8 app as weel.
Phillippe says that so far the service has seen a surge of interest: in the first year of launch LeKiosk was downloaded 500,000 times, accounting for 1 in every 3 iPads in France. More recently, that download frenzy has slowed down, with the total number of downloads today at 700,000 as the service has expanded to the UK and Italy.
Nevetheless, the conversion rates of free downloads to paid purchases has been strong: Of those downloads, some 100,000 have paid for magazines a la carte, and 30,000 have taken out “subscriptions, which give users access to 10 magazines per month in exchange for €10 or £10. The charges are made through Apple’s in-app purchasing service, meaning that Apple gets a 30% cut of all takings.
The company is growing fast in terms of revenues: this year it should have total sales of €6 million, compared to €1.4 million in 2011, according to Les Echos, and it expects to be profitable by 2014.
While the French store has around 600 titles in it today, while England and Italy each have around 100 titles.
Phillippe says that new funding will be used to help the company build out its service outside of France — specifically in the UK (where it launched in June 2011) and Italy, and then to more countries in Europe. The U.S. is not on the agenda yet, although you can still download LeKiosk’s apps there, with European titles on them.
Part of LeKiosk’s European expansion will involve building up relationships with publishers to get all must-have content on to the app, and also working in new services to the app itself, boosting interactivity among users and around sharing magazine stories and magazines themselves — a crucial boost for content that might otherwise be perceived as “flat” when compared to more dynamic magazine apps.
But he also argues that the pared-down, digital versions of the magazines on LeKiosk is also part of the company’s strategy: “We trying to build a simple user experience,” he says, using a dynamic 3D newsstand that “provides a consistent look and pricing structure for all the magazines within it.”
Going forward, if anything, it looks like LeKiosk wants to try out even more premium services rather than any advances to freemium. In France, the company is experimenting with adding comics into the mix at the start of 2013. It plans to offer them under a separate pricing structure, charging €10 for 4 comics.
