A little more than two years ago, we approached the major online
services of the day-Prodigy, CompuServe, and American Online-with the
question, "Would you allow us to market our weekly magazine, The New
Republic, on your service?"
We had read a great deal about the convergence of media, including the
way voice, data, text, and graphics and video would be delivered. We
believed these advances would create opportunities for publishers or, if
you will, content providers.
Ideally, among other things, we wanted to conduct a test to determine
whether we could successfully market subscriptions to The New Republic
using the online medium. The idea was to offer that online universe a
taste of The New Republic. Specifically, we would offer our table of
contents and a few articles from each issue to see whether such a
sampling would lead some to buy a subscription.
We believed that an online presence might act as an "electronic
newsstand" by providing potential new readers and subscribers with
increased exposure to our product. The matter was of particular interest
because of the difficulty that small-circulation publications, even ones
as celebrated as The New Republic, have in obtaining shelf space on
traditional newsstands. The conventional wisdom of the time was that
there was the danger of cannibalizing hard-copy sales by providing
editorial content online. We took a different view: by giving more
people a taste of The New Republic's editorial quality, we would make
new friends and sell more hard copies.
The entire project was viewed as low risk. Even if we never sold a
single subscription, The New Republic would benefit from the increased
exposure. Of course, exposure is not tangible. It can't be measured. One
cannot point to the bottom line and say, "Look, we made this much money
or sold this many units because of greater exposure." However, we
believed that the increase in name recognition would help sell the
magazine in many ways, whether by increasing interest at traditional
newsstands or by sparking curiosity among advertisers newly introduced
to The New Republic.
Revving up with America Online
Prodigy and CompuServe seemed lukewarm to our query, whereas America
Online put four people into our offices within the week. After a few
meetings in the spring of 1992, The New Republic became the first
noncomputer trade magazine to sign up with America Online. We went live
in the fall of 1992 and to our delight began selling subscriptions
immediately. Not a lot, mind you--not like direct mail--but enough to
know that the concept and the technology were sound.
Circulation folks will be pleased to know that our pay-up rate with
these new subscribers was nearly 85 percent. Average pay-up for
subscribers acquired by direct mail is only around 40 percent. Needless
to say, we were pleased with the new source.
As we moved into 1993 and the results of our test proved positive, we
thought, Well, if we can do well on America Online, with its 250,000
subscribers, why not try a similar experiment elsewhere? We looked at
some of the other online services but kept coming back to the incredibly
vast network called the Internet. Fortunately for us, the Internet was
starting to become more commercial, just as we began to explore it. We
saw an opportunity.
Using The New Republic on American Online as a model, why couldn't we
create a similar service on the Internet with as many publishers as
possible? Why not create a service that would essentially mirror the
experience of a traditional newsstand? That was the idea.
Now, ideas come and go. It's execution that matters. Specifically, The
New Republic needed a partner--an architect to build this service on the
Internet from the ground up. We required a partner who could help us
understand Internet culture and help us market to the Internet community
in an appropriate and respectful way. We found that partner in Rob
Raisch, president of the Internet Company and now chairman of the
Electronic Newsstand.
The Electronic Newsstand
In May 1993, The New Republic and the Internet Company teamed up to form
the Electronic Newsstand. The strategy was straightforward: We would
build interactive selling platforms for publishers. Those platforms
would reside on the Internet and consist of four menu items:
1. The current table of contents and one or two selected articles from
each issue.
2. A statement describing the magazine.
3. An archive file.
4. A subscription offer, which would include information about single-
copy sales and foreign rates; the subscription folder would also contain
the publisher's exclusive E-mail address, through which orders would be
taken and the newsstand's own toll-free number for credit card
purchases.
Basically, users could browse the newsstand for free. If they wanted a
year's subscription to, say, the New Yorker, they would simply send the
order via E-mail to [email protected]. As soon as the order hit the
New Yorker mailbox, we would confirm with the customer our receipt of
the order and immediately forward the order to our contacts at the New
Yorker, who would then begin the subscription and invoice the customer.
With an initial group of eight magazines on board--The Economist, the
New Yorker, The New Republic, National Review, The Source, New Age
Journal, Journal of NIH Research, and Outside Magazine--we opened the
Electronic Newsstand for business on July 21, 1993.
The first week, we were averaging about 2,000 accesses per day and were
selling a handful of subscriptions. Users were accessing the newsstand
from throughout the United States and abroad. For example, of our first
ten orders, three came from California and one each came from Arkansas,
Maryland, Massachusetts, Vermont, Virginia, Washington, and Vancouver,
British Columbia.
The Newsstand Takes Off
Suddenly, we were off to the races. People were indeed visiting the
newsstand and yes, they were buying magazine subscriptions. Like The New
Republic on American Online, the concept and the technology were sound.
We did two things immediately to keep the momentum: First, we dropped
mail to hundreds of publishers. We talked up the reach of the Internet,
the interactivity of the newsstand, the twenty-four-hour selling
platform, and, of course, the exposure.
Second, we began to promote to the many Internet newsgroups the articles
available on the newsstand. We would post to a newsgroup an excerpt from
an article, hoping the group might be interested in the subject; then we
guided the users back to the newsstand for the full piece and additional
information. We have been careful to be respectful of the Internet
culture.
We also promoted the newsstand to administrators of university and
college computing centers and to the many commercial access providers.
Today, we have more than eighty magazines on the newsstand, including
Discover, Inc., ComputerWorld, American Demographics, and Yoga Journal.
The newsstand is accessed more than 30,000 times a day from locations
all over the globe. Our sales are steadily increasing and we have sold
subscriptions in every state in the Union and in seventeen different
countries, including Australia, Canada, Croatia, England, Estonia,
Finland, France, Hong Kong, Israel, Norway, Singapore, Sweden, and
Switzerland.
In addition, the Electronic Newsstand has been invited--and has
accepted--to be one of the few Internet resources selected as a featured
database on America Online's Internet Gateway:
We have chosen your site [the Electronic Newsstand] as a candidate for a
"Featured" database [on America Online's Internet Gateway] because of
its exemplary presentation of what we believe will be valuable and
interesting information to AOL users. We have chosen it also because it
appears to be a reliable and well-maintained resource . . .
Pandora Systems, the company developing
America Online's Internet Gateway, February 2, 1994
Electronic Newsstand Demographics
Who are the people buying subscriptions from the newsstand? Many
publishers, indeed marketers in general, are interested in demographic
information. As yet, no one has quantified or qualified the Internet
audience, due mainly to the strictly private nature of the Internet
culture. What we do know, based on four-line addresses, is that these
people are businessmen and businesswomen, university professors and
administrators, engineers, physicians, public-sector employees, military
men and women, and people from, literally, all walks of life. We also
know that they pay up. Our pay-up rates are twice as good as direct
mail, and for some publishers, pay-up rates run better than 70 percent.
This small snapshot of the Electronic Newsstand describes how we market
magazines to the Internet community. Magazines, however, are only one
component of the newsstand. In January 1994, we opened the Electronic
Bookstore for trade and academic publishers and the Newsletter
Marketplace for newsletter publishers. We also offer publishers other
electronic services, including retrieval services, document delivery,
and mailing list services.
The Electronic Future
In addition, we've announced the creation of our first two interactive
Business Information Centers. The first Business Information Center,
sponsored by the Lincoln car division of Lincoln-Mercury, will reside
within an area called Electronic Car Showroom. The second, sponsored by
Lufthansa Airlines, will reside on the newsstand's main menu.
Our Business Information Centers, which take advantage of the
newsstand's heavy traffic, enable companies to place on the newsstand
substantive and comprehensive information about their products and
services. The centers can provide all of the information that stands
behind a traditional advertisement.
For example, the Lincoln Business Information Center will provide users
with information about leasing offers, results of road tests, and other
interesting features. The Lufthansa center will make available to the
Internet universe a wide variety of information, including current
travel discounts, frequent flyer program updates, gateway and
destination information, new aircraft profiles, and other pertinent
corporate information.
We encourage companies to be as creative as possible. Imagine some of
the possibilities.
* A company could put up substantial product literature.
* Company representatives could conduct online focus groups and
interactive forums and conferences with their customers.
* Technical reports, white papers, annual reports, and all corporate
press releases could be made available.
The possibilities are endless.
The Business Information Centers do not constitute advertising in the
traditional sense, but rather provide consumer-friendly informational
platforms that users can choose to access. The centers will add value
back to the Internet and will be implemented with the greatest respect
for the Internet community.
We're also talking with several other automobile manufacturers,
financial institutions, and computer companies.
The fact that so many publishers and, more recently, corporations have
found the Electronic Newsstand and innovative and exciting way to reach
consumers is certainly encouraging. We are also heartened by the welcome
the Electronic Newsstand has received from the Internet community. We
will continue to respect the sensibilities of our Internet neighbors and
will strive to keep the Newsstand not only diverse, but topical,
entertaining and educational.
Jeffrey Dearth is founder and CEO of the Electronic Newsstand and
president of The New Republic. Paul Vizza is Vice President of the
Electronic Newsstand and Associate Publisher of Marketing at The New
Republic. [email protected]