The companies included in this month's EContent 100 list provide a good indication of what's been working in the content industry over the past year, and it suggests the corporate business models that are likely to move forward in 2003. We wanted to complement that list with a view from the trenches, the specific revenue streams that look especially promising to us in the coming year. Despite a doggedly depressed ad market, and a fee-based subscription model that continues to hobble towards viability for many sites, there is a remarkable amount of creative thinking still going on in dotcomland.
In speaking with several major content providers recently, we uncovered some intriguing new approaches that focus on the ad and pay-to-play revenue: fee-based downloadables and print-on-demand services, cross-platform ad sales, and sponsorships. In fact, don't be surprised to see these ideas show up in greater detail in this column in coming months, as we are tracking each model closely.
Content By the Byte
Tangibility matters. People resist paying for simple online access to content. The virtual world is too ethereal, the information for sale too much like all that's available for free just one click over. "Move it into people's hands and you create value," says Dave Kurns, editor-in-chief of Meredith Interactive Media, home of the Better Homes and Gardens and Ladies Home Journal Web sites, BHG.com and LHJ.com. Meredith recently rolled out attractively designed PDF downloadable features it is selling for $6.00 each. The pieces are designed for what Kurns describes as "passion purchases," impulse buys for those who need 15 holiday appetizers or Halloween costume ideas in a portable format right now.
Like any fee-based idea, Kurns and his ilk may have trouble making the distinction clear between these pay-to-play features and free material also at the site, but if they get the content mix right, the basic model is promising. There is a good reason why "print this" is one of the most commonly-used functions at a Web site: The Web browser and PC monitor are just about the most uncomfortable medium for reading we have yet invented, other than the cave wall perhaps. Getting one's content off of the Web, and putting it into a format people are used to paying for (i.e., magazines, pamphlets) is one of the most likely ways publishers can get users to recognize value. While not a runaway success, NYTimes.com has been getting an audience for its pay-by-the-piece Editor's Picks content, which we reported on here in early 2002.
Meredith is going beyond fee-based downloadables. In a project that should be up and running as you read this, its sites will let users construct their own cookbook from Meredith's massive database of recipes. Better then just downloadable, the assembled book is ordered via Kinko's, which will print it off on high-quality copiers, bind and deliver it. The goal is to let users take any category of content, choose specific articles from the extensive database, and make a true custom magazine. "It transforms a distant medium and puts it in people's hands," says Kurns.
At Long Last Synergy?
Finally, it is becoming clear that the big winners in the great Web shakeout will be the traditional media brands. While most Web-only publishers have been trying to minimize the damage of the ad recession, more than a few print brands are reporting substantially improved ad sales in 2002. A mid-summer survey of top media brands by the Online Publisher's Association revealed that offline brands such as Forbes, Better Homes and Gardens, New York Times, and Conde Nast enjoyed a 30% or more increase in ad sales in the first half of 2002, and executives at several of these companies privately confirmed that they were quite surprised at how well they are doing relative to the rest of the online market. The reason may be simple. As traditional media buyers such as packaged goods manufacturers, liquor, and apparel move more of their budgets to the Web, they are more likely to rely on the companies with whom they have advertised for decades already.
Sarah Chubb, the president of CondeNet, says that the dream of cross-platform ad deals is being realized at long last. "Our most promising area is our very healthy and rapidly-growing partnership with Conde Nast Corporate ad sales. We are selling packages with print that are not about price cuts." The legendary woes of AOL Time Warner and its attempt to synergize ad sales across properties notwithstanding, advertisers like the idea of coming at their targets from multiple positions at once, and they are starting to see the unique proposition of the Web piece in all of this. The Web is no longer being seen as a value add to the "real" offline deal.
And it's not just CondeNet; GartnerG2 research director Denise Garcia says media buyers are starting to experiment much more willingly with integrated packages. In fact, she says that cross-platform ad deals will account for 20% to 25% of ad revenue at the major media conglomerates (i.e., AOL Time Warner, Vivendi, etc.) by 2005.