Next Issue, the app that gives subscribers access to 140 magazine titles, has raised an additional $50 million in private equity.
The funding comes from multinational investment firm Kohlberg Kravis Roberts & Co, which will retain a minority stake in the company alongside existing partners Rogers Communications (which owns Marketing), Conde Nast, Hearst, Time and News Corp.
Next Issue CEO Morgan Guenther told the Wall Street Journal (paywall warning!) that funds have been earmarked for new marketing efforts and audience development.
Guenther told the WSJ he believes the app can eventually reach tens of millions of subscribers, but it will have to compete for share with subscriber services like Spotify, Oyster and Netflix.
Next Issue, which according to the article has maintained a low profile “in part because it lacked the cash to fund big advertising campaigns,” plans to use the funds to ramp up promotions. In Canada, however, Rogers launched TV, radio, print and out-of-home advertising a year ago to entice readers to subscribe to the service.
“We have to show whether magazines can become a key part of the streaming bundle, next to music, television and movies,” Guenther said.
He said Next Issue has 150,000 subscribers at $9.99-$14.99 per month, but is not yet profitable.
