Management by Measurement

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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 a

result of Lockwood’s persuasive powers. He needs to convince many

potential clients that his site won’t kill them. After all, they are

putting all of their articles up on MagWeb. Some fear that their

subscribers

will cancel, and will do all their reading on Lockwood’s site. This

doesn’t happen, he tells them, and in fact, some of the magazines

on his site report more subscribers as a result of their exposure

there. This is especially true, he says, of really small circulation

specialty newsletters that may have only a few dozen subscribers.

This phenomenon points to differences in print and Internet. While

the Internet is great for scanning lots of information quickly, it

can’t match paper held by a reader ensconced in his favorite chair

before the fireplace on a cold night.

When this line of thinking is not 100 percent effective, Lockwood

offers a licensing agreement whereby he delays putting a publication’s

current issue up on the site for a period of time. Each licensing

agreement is different, but all pay contributing publications based

on the number of times subscribers read their articles.

Marketing. Lockwood says he has worked up to 18 hours

a day on his enterprise. Weekends too? Well, he says, that depends

on how you define work. Many Saturdays and Sundays find him at

gatherings

of war history buffs, where he enjoys the conversation, and spreads

the word about his website. "The first six, seven months of the

year, I was flying all over the place," he says. He also uses

a public relations professional, who has secured him prime gigs,

including

an appearance on the History Channel.

Scanning. "A good scanner is hard to find," says

Lockwood. Each issue of all 96 magazines on his site needs to be taken

apart and scanned in. With a modern optical character reader (OCR)

this is not too difficult for glossy magazines printed on high quality

paper, but many of the niche history publications on MagWeb are much

more cheaply produced. These require a good deal of clean up by a

human with a careful eye for detail. Even harder to scan are back

issues, some of them decades old, and hand typed. "With a big

glossy, you find that one in 100 characters are off," says

Lockwood.

"With the 1970s, you’re lucky to get 10 percent accuracy."

Technology. One of Lockwood’s partners handles the site’s

programming and upgrades, and recently switched to a Sun Enterprise

250.

When he started his company, Lockwood was going against the

tide. "Let me tell you," he says, "five years ago people

said `Charging for something? You’re crazy!’" But, even then,

with hundreds of websites giving away content of all kinds, he

realized

that "somewhere, somehow, down the line, you have to make it

pay."

Top Of Page
Management by Measurement

You will never improve results if you can’t measure

every part of your organization. That is the message of William

Schiemann, CEO of a Somerville-based consulting and research

firm, the Metrus Group, and past president of the New Jersey Human

Resources Planning Group. Schiemann, co-author (with Metrus colleague

John H. Lingle) of "Bullseye! Hitting Your Strategic Targets

Through

High-Impact Measurement" (The Free Press, $30), finds many

employers

afraid to measure employee and customer satisfaction. The questions

might put ideas in their heads, is the thinking. Schiemann argues

that measuring these stakeholders’ attitudes is critical.

Schiemann speaks on "Reinventing Human Resources: Using the

Balanced

Scorecard" on Monday, November 12, at 5:30 p.m. at a meeting of

the Human Resources Management Association at the Princeton Hyatt.

Cost: $35. Call 908-231-1900.

If his audience already appreciates the value of measuring performance

and believes that their companies are already employing measurement

processes, Schiemann will not be surprised. In fact, in the opening

chapter of his book, he challenges readers to take a 30-second test

about their own organization:

"Make a note of the few dozen or so things that really matter

to the long-term success of your business. Be thorough. Sure, revenue

generation is critical, but what else matters? Is it the satisfaction

of your customers? Is it the commitment and loyalty of your employees?

Is it improving the work force competencies? Regulatory issues? Labor

issues? recruiting new talent? Whatever it is, write down the top

12 items that really matter tot he long-term success of your

business."

Then, Schiemann writes, "make a list of the measures you talked

about in your last quarterly business review meeting. Did you talk

about 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 things

that really matter to your organization’s long-term success? Or is

your organization yet one more example of the measurement paradox

in which there is a chasm between the rhetoric espousing the

importance

of measurement and a reality that denies it?"

One of the most glaring examples of the measurement paradox comes

in the area of customer and employee satisfaction, according to the

Schiemann-Lingle book. Lots of executives, the authors assert,

believes

that "surveying customers or employees puts ideas in their heads

and creates dissatisfaction." But research shows that

"industry

leaders, as compared to industry laggards, do more surveying of their

customers and employees?

"In fact, evidence suggests that `not asking’ is a much more

dangerous

strategy than `asking.’ Research reported by the Direct Selling

Education

Foundation indicates that the average business never hears from 96

percent of its dissatisfied customers. For every complaint received,

the average business has another 26 customers with problems from whom

it has not heard. The value of eliciting complaints is clear. Simply

allowing a customer to voice a complaint significantly increases the

likelihood of repeat business. If the complaint can be dealt with

quickly, 8 out of 10 customers will come back or refer others to your

business


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