Digital magazine aggregator Magzter expects half of its revenue to come from advertisements placed inside its app by 2016.
The company currently generates 100 per cent of its revenue from subscriptions of magazines, by keeping 35 per cent of the end-user price. It will also introduce a news feed and books to its library of content.
Magzter has over 4,500 global magazines in its stores, and expects the number to touch over 8,000 by 2015.
The firm has developed an ad engine which would deliver advertisements to magazines and also help place ads at targeted content.
“Google did this for web and online content. We aim to do this for Magazines and books,” Girish Ramdas Co-Founder and CEO of Magzter, said.
Mr. Ramdas said the company’s revenue diversification would start by the end of this year. .
The firm is also looking at monthly subscription-based revenue model similar to that of Netflix for videos. Magzter expects 30 per cent of its revenue in 2015 to come from advertisement, 60 per cent from subscription and 10 per cent from content-wise sales. In 2016, it expects 50 per cent of revenue to come from advertisement, 30 per cent from subscription and 20 per cent from content-wise sales.
“We eventually see advertising being the bigger part of our revenue,” Mr. Ramdas said.
If the advertising was sourced by publishers from their digital editions and used Magzter’s technology, they could retain 70 per cent of the ad revenue, he said. Magzter would keep 30 per cent. It would be vice versa if Magzter sourced the advertisement, he pointed out.
Mobile advertising is expected to reach $25 billion by 2016.