The question for Web sites is no longer, "to charge or not to charge," but rather "how much can I charge for what?" Many sites that have found success charging for interactive content are doing so, in part, by leveraging the value of online community. Their success stories can be yours.
Users of interactive online community features generate two-thirds of a site's sales despite accounting for only one-third of visitors. Visitors who contribute product reviews or post messages visit that site nine times as often as non-users do, remain twice as loyal, and buy almost twice as often. Even users who read but don't contribute to community exchanges are more frequent visitors and buyers. Given this McKinsey analysis of Media Metrix numbers,what site builders/owners would turn their backs on online community?
Five sites with interactive features provide guideposts to those searching for ways to introduce paid content. From day one, The Wall Street Journal and Consumer Reports were pioneers in taking major brands online and charging for content. Motley Fool and Salon werebrands built online: one charged for discussions from launch, the other seven years down the road. And Dr. Andrew Weil, already an offline brand, offers a premium membership including chat with Dr. Weil in addition to free content and commerce on the Web site.
The Wall Street Journal was the first global brand publisher to lead the way onto the Web with a for fee site (charging $59 annually for Web site access and $29 for print subscribers to add online access). Within months of the general launch, forums were added in time for the 1996 Democratic National Convention. A conversation with Neil Budde, founding editor and now publisher of the Wall Street Journal Online, illustrated to us his very clear vision: "I've long said that a key element of the Wall Street Journal's online strategy is building a solid relationship with our subscribers. It isn't just about charging for content. We want loyal subscribers who are regular readers, not just occasional visitors. In a way, the fact that we charge is a manifestation of having a strong relationship. One element of building a strong relationship," he says, "is allowing those subscriberswho are interested to interact and react to the compelling content of the Journal, so forums are a good fit—at least for a portion of our audience."
Consumer Reports, the venerable consumer interests organization, followed the Wall Street Journal Online a year later in 1997 with a for-fee site charging for access to content and forums. The forums give consumers direct access to the experts, who until, then had toiled behind the scenes doing the rigorous and respected product testing hidden from public view.
Anne McKay, Consumer Reports online forum manager has been managing the online component for nearly fiveyears now, through the startup environment of irrational exuberance to the current sober awareness that community too, regardless of its warm association with mission and good works, must pull its weight like any other investment. "With experience, my own enthusiasm has only grown," McKay muses. "The execution isn't as perfect as I would like, but community is useful as a site element and has the potential to contribute mightily to subscriber attraction and retention seems brighter to me than ever."
The Road to Weilville
The WELL, circa 1985, dictated the prime directive for the school of thought that people might want to belong to a club and even be willing to pay for exclusivity. In the beginning, pricing was hourly and steep. "In the early days of The WELL, people were paying easily $100/month to participate because of the timed connect charges they were bearing. That was an indication that where there was a unique and valuable offering, people will pay," according to Cliff Figallo, lead consultant for SociAlchemy. And compared to many other for-fee sites, pricing is still high ranging from $6.50 to $15 a month.
Gail Williams, director of communities at Salon.com, which is home to the WELL, says, "Despite the adage that everything on the Internet would have to be free, we knew WELL members wanted the feeling of exclusivity that comes from having only members read and participate, and that thousands of paying subscribers would not be enough of an audience for advertisers even if the members wanted ads. We also knew they did not want to see ads." She goes on, "The WELL developed culturally to the point where people who already had some kind of access to email through USENET wanted to be on the WELL to see what was happening, and to be activists for among other issues, online free speech and privacy."
Ten years later, the pioneering WELL continued as a for-fee site under the Salon.com banner that, according to Figallo,"acquired it in early 1999, in the hot days of Internet IPOs, to pump up its IPO. They wanted to hype content and community," he says. Figallo should know. He wasWELL director in 1985 and responsible for Salon Table Talk at IPO time. And he has always thought that people would pay the "same cost as a latte a month" not to view ads online. But in these times, anything that was a hot IPO is potentially problematic.
Members of WELL were not the only who to agree that online discussions had value and were worth paying for. When the Gardner brothers (Tom and David) launched their Motley Fool monthly investment print newsletter in 1993 and followed up early the next year with an AOL forum, they hadn't known they were going to charge for online content. However, on January 28, 2002, they wrote a "Letter to the Community," to Motley Fool members announcing that:" after February 14, access to the Fool Community 's discussion boards will cost $4.95 per month or $29.95 per year. It included the self-congratulatory: "for more than seven years, the Motley Fool has been home to the world's best financial community, bar none." April 2002 Nielsen Net Ratings confirmed the site's popularity, showing a total 927,000 visitors to the site and 127,000 to the boards.
Dr. Andrew Weil's site started online in 1996 and traveled a path from Hot Wired to Time/Pathfinder. Dr. Andrew Weil is the brand himself; he writes books, teaches, and lectures worldwide on nutritional changes and his "Integrative Medicine" approach. The site bearing his name was, for various reasons, neglected over the years until it was bought back from Time Warner, taken private in 2000, and re-launched in December 2001. A few hundred committed forum users provided the spark for the rebuilt site. Larry Tree, the DrWeil.com CEO, recounts, "We had those few hundred loyal users" (who call the site "Weilville") and he says, "since November 6, we have added nearly 200,000 registered users." 1.5% are premium members who, in return for the yearly fee, receive special benefits and, a monthly chat with Dr. Weil. The annual fee is $29.95.
The Ask Dr. Weil feature of the site gets 500 questions per day. There is about a 25% click through back to the site from the weekly email bulletin. Community is an important piece of DrWeil.com's success. Click rates are higher into the ecommerce application from the community than from any other area of the site.
The numbers are there. The anecdotal evidence is in. With interactivity, as in opening a restaurant, you need to do more than just open the door. You need to get to know your customers and deliver the dishes they most like at the right price. The process may be involved and even costly, but in the evolving pay-for-content Internet, community pays off. And if its done right, everyone, including you and your company, will feast on the fare.
SIDEBAR: Prospero: A Community Solution
Explore the discussions on Wall Street Journal Online or Dr.Weil.com and you will quickly discover that underpinning both is Prospero software. Prospero also supports forums for Amazon, Staples, Business Week, and Major League Baseball's sites. "Prospero sees its communities as a platform for offering paid content," according to Jim Bruynell, Prospero Technologies' vice president of sales.
At the for-fee site Wall Street Journal Online, news editor David Flores says they use Prospero to create a daily poll that is integrated within a discussion forum. The closed forum feature also frequently provides readers with access to expert dialogue about major news stories. At DrWeil.com, Prospero hosts the monthly expert chats where premium members in the event ask Dr. Weil hundreds of questions. Staffed with a typist for Dr.Weil, a moderator, and a screener backstage, a chat proceeds almost effortlessly.
Prospero's evolution through the merger of three community platforms is a telling reflection of online community's history: In 1999, WellEngaged, the software platform that was spun off from the famous WELL online community, acquired the Proxicom forums. Later that year, Prospero resulted from the merger of industry pioneers—WellEngaged and Delphi Forums. (Delphi forums had been the beating heart of the Delphi online service, which started in 1983 and had survived a sale to Rupert Murdoch's Newscorp and buy-back from management.) As of 2002, Prospero is part of Inforonics , a business and technology services company.
Chip Matthes, Prospero's vice president of technology, says that the current Prospero platform reflects those long years of adding features requested by clients. Some of those client-requested features are: allowing a number of levels of supervisory power for most efficient forum management; ease of adapting the look and feel of the product to match site branding; the bozo filter to address problem members who blissfully post messages only to themselves or most recently "Active Content" to leverage member-generated contributions across the site.
Matthes confirmed that currently Prospero's "development initiatives are focused on how communities can drive business goals, whether those goals involve selling magazine subscriptions, memberships, books, or anything else. And our new reporting systems are designed to measure how well the community applications accomplished that."
Early on, Matthes says reporting was primarily concerned with page views, since this was how clients were monetizing their communities. "Now that communities are often used to supplement and support an offline enterprise," he says, "our clients are becoming more interested in behavior as it relates to particular topics or products."
Reports have also changed from custom-designed HTML to being available in Excel format or as delimited text so clients can use their own software to design additional custom reports based on the report data. Matthes says Prospero found that many people have an interest in monitoring various aspects of the activities in their sponsored online community. So Prospero built a Home Delivery system, designed to allow forum moderators to direct specific reports to specific individuals via email on a scheduled basis.
Matthes had been part of Delphi since1984 and with Prospero since the merger. He looks forward to the evolution of online community: "What's ahead?" he asks. "We think the eBusiness/Business distinction is artificial, and that it's just about Business and using the best available tools to do the job. We're focusing on how our clients can use online collaboration to measurably support and enhance their core businesses, by using online forums to provide differentiated services and incentives for people who buy products, subscribe to magazines, or otherwise generate revenue for a company."