Five or six years into the Web's fledgling existence, most content providers continue to cling to the notion that this medium is just another publishing platform, a bottomless pit into which they can dump massive amounts of old and new content cheaply and quickly for all of those waiting eyeballs. Meanwhile, back here on earth, users have cultivated their own relationship to the new medium, more as a toolkit, a reference source, the place to go to satisfy specific tasks or answer a precise question. Publishers that caught on to the importance of utility over raw information succeeded in capturing large audiences early on and also kept them loyal. SmartMoney.com, for instance, understood back in 1997 that users came to its site not for more of the same content they were reading in the magazine each month, but instead for cool new interactive ways to calculate their personal finances or view market data. The toolsets SmartMoney was developing proved so popular that the company spun it into a new business and now gets about half of its revenue from licensing finance calculators and a brilliant visual representation of numerical data (The Map of the Market) to bank and brokerage sites.
The point is that the Web is transforming the traditional publishing paradigm in a number of ways. Chief among them is the idea that online content has to become more service-oriented, offering content packages and even direct services that help users complete specific tasks. In fact, this, rather than lowering the subscription wall on existing content, is the most likely way that publishers will get users to pay.
Selling Offline Services Online
Dow Jones' CareerJournal.com is one of the strongest examples of a site that keeps its core informational content free, but then collects around it a series of fee-based services specifically targeted to its audience of executive job hunters. Since 1997, the site has been selling career counseling services, resume evaluations, and even assessment testing in a partnership with Rochester-based Career Development Services, Inc. (http://careerdev.org). A key aspect of this service is that it is not entirely virtual. Users schedule phone consultations and submit their background materials online, but the process always involves human contact with a career planning professional.
One of the dangers of partnering with third-party service providers is me-tooism, content sites in a given category all offering the same product lines and losing any differentiation in the market. "To maintain that market lead, exclusivity plays an important role," says Lee. As a subsidiary of the same company that owns Wall Street Journal, CareerJournal leverages its brand advantage. "We identified the primary provider in the market and signed an exclusive alliance," he says.
This is just one of a cluster of similar fee-based products at CareerJournal, including access to executive recruiter and placement firm databases, reference checking, and executive networking, a service that organizes real-world networking events in cities around the country. CareerJournal's fee-based services account for about 10% of the site's total income, and Lee admits "you can't build a whole Web company around these services." But the revenue has grown markedly year-to-year, and these products give users the kinds of resources and information they should expect from an executive career site, he adds.
The Revenue Sermon
Content providers such as Lee have discovered that users are willing to pay reasonable fees online if it involves completing a task that is important to them in a timely manner. The principle applies as much to fast track executives as it does to contemplative clergymen. Far from the hard-boiled world of CareerJournal.com, ChristianityToday.com finds that supplying preachers with a steady stream of weekly sermon ideas is a lucrative business. Its two-year-old spin-off site, PreachingToday.com, has more than 7,000 subscribers to a service that provides each week ten "illustrations," stories and incidents that can be used to create or enliven the weekly sermon, which is perhaps a preacher's most onerous task. You try being inspirational every Sunday after a week of handling people's troubles. According to John LaRue, vice president, Internet research and development, 94% of subscribers opt for the more expensive $49.95 tier of service (a $29.95 limited access plan is available).
While PreachingToday.com is one of the under-reported success stories among online pay-to-play services, it is also hitting a bit of a marketing wall. In its first year, the site used direct mail and online promotion to pull in 6,500 of those 7,000 paying members. Since then, however, LaRue and company are just barely staying ahead of attrition. The renewal rate is 51%, not great for a niche content product that serves a professional community. An email newsletter, which gives away one of the weekly ten sermon illustrations to non-members, is also not doing its work in converting readers to subscribers, so the company is looking for new ways to market the product more effectively.
But the same principle that made PreachingToday.com work, selling content that has specific, identifiable uses offline, is being applied to ChristianityToday.com's new businesses. The company has transferred online a print product called Building Church Leaders, themes, presentations, articles and even cartoons that are designed for reuse by church officials as circulars or in committee meetings. The previous hard copy notebook format had been popular, but prohibitively expensive to produce. "There was no way we could figure out how to make money," says LaRue. By translating these documents into downloadable HTML and Word files as well as PowerPoint presentations, the company not only achieves much cheaper distribution costs, but churches also get what they need at the last minute if necessary and can even customize the product endlessly. The downloads cost only $7.95 each, but in the few months the service has been generating over $1,500 a week, forcing LaRue to recalculate his anticipated income off of the site, from an initial $10,000 to $12,000 a year to more than $50,000. In 2002, he anticipates that 20% to 25% of ChristianityToday.com income will come from these and other fee-based services.
Other publishers are also starting to catch on to the call to service. For instance, women's site iVillage sells personalized astrology charts and even IQ tests. It is about to roll out a pay-to-play interactive sex workshop hosted by its popular resident therapist. In fact, Webinars and elearning tie-ins are among the more likely candidates for service-oriented products at most content destinations. And it is important to note that like CareerJournal.com and ChristianityToday.com, iVillage continues to keep its core content free. Too many publishers are wringing their hands over how they can "retrain" content users away from the free-for-all model of the early Web and "make 'em pay" for material they are used to seeing for free. Given the slow growth of most subscription plans online and the persistence of free alternatives in most categories, "retraining" the user base seems more like a fool's errand. Instead, content providers should be asking themselves how to incorporate the relevant resources and task-oriented content that users are most willing to pay for already offline. The key may be retraining the content providers, not the user, into thinking of themselves as service providers.