Corrections or additions?
This article was prepared for the November 7, 2001 edition of U.S.
1 Newspaper. All rights reserved.
Selling Internet Content? Try the Amusement Park
Contentville is no more. Founded by Steven Brill, who
scored home runs with American Lawyer Magazine and Court TV, the site
took its name from the term coined in the Internet Age to refer to
what print types call “articles,” “short stories,”
and “books.” Part magazine, part bookstore, Contentville,
which pulled the plug on its website last month, had received $100
million in backing from investors, including media companies CBS and
NBC.
One of the best-financed content websites, Contentville was not the
only one to crash recently. Write News (writenews.com) features
a Dead Zone listing media cut-backs and closings. Now on its long
list are a number of content sites in trouble, including ABC.com,
which laid off 85 percent of its workforce on October 23, New
Monday.com,
a career site that shut down on October 22, and IFilm.com, which
eliminated
10 jobs on October 16.
These are tough times for content, for sure. But a local Internet
company is finding a way to make content pay.
Magweb (short for Magazine Web) was founded in 1996 by Russ
Lockwood,
its CEO, and three partners. A compendium of magazines on military
history, the company, with offices in Stockton, is self-funded, turned
a profit in 2000, and continues to grow.
Lockwood believes that content can be the basis for a profitable
Internet
company — if the business model is set up correctly. On Tuesday,
November 13, he speaks on “Website Content Subscription: A
Business
Model that Works” at the monthly meeting of the Association of
Internet Professionals at the Sarnoff Corporation. Cost: $10. Call
609-737-6842.
Lockwood has spent his entire career in journalism. A graduate of
Syracuse University (Class of 1981), where he studied journalism and
history, he has written for the New York Times Information Service,
Creative Computing magazine, and Personal Computing magazine. He also
ran Compuserve forums, including AfterHours and Computer Gaming World,
and was editorial director of AT&T’s New Media Services web division.
Beyond hard work — 12 to 16 hours a day is not unusual —
Lockwood
has succeeded, he believes, because he uses a subscription model.
Most content sites, by contrast, tried to use a television model,
putting up content and expecting advertisers to pay for it. Other
sites sell content piece by the piece, charging, on average, $2.50
for each article download.
Lockwood rejected the advertising model out of hand, and decided that
charging for articles one at a time was not a great idea either. He
saw that some websites were selling articles without so much as a
summary or a word count, so consumers had little idea, beyond a title,
of what they were buying. After spending $25, a customer could find
there was little in the 10 articles he had purchased that he needed.
“For my model, I took amusement parks,” says Lockwood.
“One
price, and you ride all day.”
Visitors to Lockwood’s site (www.magweb.com) can sample a few articles
at no charge, but to access the full contents of the 96 magazines
it lists, they must sign up for a subscription. Priced at $19.95 a
month or $59.95 for the entire year, subscriptions allow military
history buffs to read as many articles as they wish.
Lockwood has 3,000 to 3,500 subscribers, 80.4 percent of whom opt
for the yearly subscription. The magazines they browse include
American
Revolutionary War Journal, English Civil War Times, Cry Havoc (all
historical periods), Dragonman (history of the Ottoman Empire),
Abanderado
(Spanish Civil War history), and The Penny Whistle (military history,
games, miniatures and reviews).
His company is called Magweb because Lockwood’s original plans
included
websites for magazines in a number of niches. He started with military
history because, he says, “If you’re going to be spending 12 hours
a day on something, it helps if you love it.” Lockwood’s interest
in military history began at the age of 6, when his father taught
him chess using kings, queens, knights, and castles. He started
reading
up on Medieval knights, and then graduated to World War II,
“because
the local library had more material on it.”
Lockwood still thinks of adding other niches. He is generally dubious
about the value of venture capital, which induced many Internet
companies
to put rapid expansion above all else, but he does say that the money
would be helpful in adding more websites and products. For now, he
is not focusing on other subject areas, but rather is working hard
to bring the total number of publications on his website up to 100.
That number, he says, would give MagWeb an added aura of credibility.
Looking at the home page of his site, largely a table of contents
listing the magazines within, MagWeb looks like a pretty simple
operation,
one anyone could do with a few hours a week of spare time. Not so.
Here are some of the elements that go into this successful website.
Sales. Magazines are added to the site one-by-one as aresult of Lockwood’s persuasive powers. He needs to convince manypotential clients that his site won’t kill them. After all, they areputting all of their articles up on MagWeb. Some fear that theirsubscriberswill cancel, and will do all their reading on Lockwood’s site. Thisdoesn’t happen, he tells them, and in fact, some of the magazineson his site report more subscribers as a result of their exposurethere. This is especially true, he says, of really small circulationspecialty newsletters that may have only a few dozen subscribers.This phenomenon points to differences in print and Internet. Whilethe Internet is great for scanning lots of information quickly, itcan’t match paper held by a reader ensconced in his favorite chairbefore the fireplace on a cold night.When this line of thinking is not 100 percent effective, Lockwoodoffers a licensing agreement whereby he delays putting a publication’scurrent issue up on the site for a period of time. Each licensingagreement is different, but all pay contributing publications basedon the number of times subscribers read their articles.Marketing. Lockwood says he has worked up to 18 hoursa day on his enterprise. Weekends too? Well, he says, that dependson how you define work. Many Saturdays and Sundays find him atgatheringsof war history buffs, where he enjoys the conversation, and spreadsthe word about his website. “The first six, seven months of theyear, I was flying all over the place,” he says. He also usesa public relations professional, who has secured him prime gigs,includingan appearance on the History Channel.Scanning. “A good scanner is hard to find,” saysLockwood. Each issue of all 96 magazines on his site needs to be takenapart and scanned in. With a modern optical character reader (OCR)this is not too difficult for glossy magazines printed on high qualitypaper, but many of the niche history publications on MagWeb are muchmore cheaply produced. These require a good deal of clean up by ahuman with a careful eye for detail. Even harder to scan are backissues, some of them decades old, and hand typed. “With a bigglossy, you find that one in 100 characters are off,” saysLockwood.”With the 1970s, you’re lucky to get 10 percent accuracy.”Technology. One of Lockwood’s partners handles the site’sprogramming and upgrades, and recently switched to a Sun Enterprise250.When he started his company, Lockwood was going against thetide. “Let me tell you,” he says, “five years ago peoplesaid `Charging for something? You’re crazy!’” But, even then,with hundreds of websites giving away content of all kinds, herealizedthat “somewhere, somehow, down the line, you have to make itpay.”Top Of PageManagement by MeasurementYou will never improve results if you can’t measureevery part of your organization. That is the message of WilliamSchiemann, CEO of a Somerville-based consulting and researchfirm, the Metrus Group, and past president of the New Jersey HumanResources Planning Group. Schiemann, co-author (with Metrus colleagueJohn H. Lingle) of “Bullseye! Hitting Your Strategic TargetsThroughHigh-Impact Measurement” (The Free Press, $30), finds manyemployersafraid to measure employee and customer satisfaction. The questionsmight put ideas in their heads, is the thinking. Schiemann arguesthat measuring these stakeholders’ attitudes is critical.Schiemann speaks on “Reinventing Human Resources: Using theBalancedScorecard” on Monday, November 12, at 5:30 p.m. at a meeting ofthe Human Resources Management Association at the Princeton Hyatt.Cost: $35. Call 908-231-1900.If his audience already appreciates the value of measuring performanceand believes that their companies are already employing measurementprocesses, Schiemann will not be surprised. In fact, in the openingchapter of his book, he challenges readers to take a 30-second testabout their own organization:”Make a note of the few dozen or so things that really matterto the long-term success of your business. Be thorough. Sure, revenuegeneration is critical, but what else matters? Is it the satisfactionof your customers? Is it the commitment and loyalty of your employees?Is it improving the work force competencies? Regulatory issues? Laborissues? recruiting new talent? Whatever it is, write down the top12 items that really matter tot he long-term success of yourbusiness.”Then, Schiemann writes, “make a list of the measures you talkedabout in your last quarterly business review meeting. Did you talkabout the revenue numbers? What other numbers did you talk about?Measures of customer loyalty? Competencies? Regulatory issues?””Are you reviewing on a regular basis measures of the dozen thingsthat really matter to your organization’s long-term success? Or isyour organization yet one more example of the measurement paradoxin which there is a chasm between the rhetoric espousing theimportanceof measurement and a reality that denies it?”One of the most glaring examples of the measurement paradox comesin the area of customer and employee satisfaction, according to theSchiemann-Lingle book. Lots of executives, the authors assert,believesthat “surveying customers or employees puts ideas in their headsand creates dissatisfaction.” But research shows that”industryleaders, as compared to industry laggards, do more surveying of theircustomers and employees?”In fact, evidence suggests that `not asking’ is a much moredangerousstrategy than `asking.’ Research reported by the Direct SellingEducationFoundation indicates that the average business never hears from 96percent of its dissatisfied customers. For every complaint received,the average business has another 26 customers with problems from whomit has not heard. The value of eliciting complaints is clear. Simplyallowing a customer to voice a complaint significantly increases thelikelihood of repeat business. If the complaint can be dealt withquickly, 8 out of 10 customers will come back or refer others to yourbusinessNext StoryCorrections or additions?This page is published by PrincetonInfo.com— the web site for U.S. 1 Newspaper in Princeton, New Jersey.
