Traditionally, a print magazine was given a window of about two years to launch, grow and reach profitability. Today, many new products;particularly those launched online;that don't demonstrate almost immediate viability are lucky to see half that.
Office Pirates was an online men's magazine that promised to pave Time Inc.'s way into edgy, online publishing. It boasted an impressive pedigree;former Maxim editor Mark Golin;and a seemingly can't-miss mix of frat boy humor. The launch drew big brand advertisers such as Dodge and Bacardi, and Time envisioned a grassroots, word-of-mouth campaign would spread throughout the online community.
However, after just seven months of operation, Office Pirates shut down on Sept. 1, 2006. The site had taken plenty of criticism from observers who said other Web sites were doing the same thing better. But Office Pirates also failed to garner enough audience to be tracked by either of the two most prominent Web tracking services, Nielsen NetRatings and comScore Media Metrix.
Today there is a tremendous appetite for online experimentation;and the low cost of entry makes it possible. Some products, such as digital magazines;a concept that is about seven years old;have yet to prove themselves as revenue generators yet succeed because they've established themselves as efficient cost-savers, particularly in their tactical use in sampling and instant distribution. "If the publisher feels the title has a chance of success, they'll probably give it a few months, which is enough time to determine whether it's a winner or a loser," says Peter Meirs, director of alternative media at Time Inc. "We've had programs going on for years that have plateaued in terms of acquiring new subscribers but because the base is high enough we are willing to keep it going even though it doesn't promise huge growth."
At the same time there's less patience with online because performance can be much clearer to gauge. "You can quantify response and engagement in a way you can't do with print," says Meirs. "People say it doesn't cost a lot to keep it going, but if it doesn't meet expectations, why do it? There is definitely a shorter cycle time with digital from the launch to making the decision to continue."
The Pressure To Make Up Lost Ground
The decline of print revenue is putting pressure on publishers to make up the difference with online;right now. "There is less time and that's partly because the traditional basis of profitability and cashflow has been eroding," says Jim Finnegan, editor and publisher of Financial Engineering News. "Previously, you could launch an [online] initiative and feed off your print cash cow and maybe give it a few years to grow. Now digital has to work in the near future because you don't have that golden goose laying eggs like you used to."
And while the turnaround time for returns has decreased, the relationship with advertisers is becoming more collaborative and long term, rather than simply taking the advertiser's check for a 12x schedule. "We bring in most of our revenue from corporate partnerships;we say we have print, now we have digital, video, e-mail newsletters, RSS feeds and we have a Web site that is getting 150,000 visitors," says Finnegan. "We'll give you regular exposure across all those media if you purchase a corporate package on an annual basis that we'll bill monthly. More and more, the advertisers, especially techies with a story to be told, say, ï¾‘We really need constant efforts to maintain awareness to keep readers' and spenders' eyes, then get them over to us so we can tell our story.'"
The benefits of a multi-tiered package are huge for the publisher;if you can wait for them. "A year ago we had four corporate sponsors, now we have 12," says Finnegan. "When it comes to things more promotional in nature, we'll take care of our partners."
Most publishers would probably admit to taking a dartboard approach online, where they're throwing out a mass of product launches in hopes that one will stick. Part of that is because, as everyone likes to say, "No one knows where this is going."
And if something doesn't work, it can be gone the next day, unlike print, where a publisher feels the weight of a failed launch around their neck for months if not years afterward."The beauty of the digital world is that if something works, great," says John Loughlin, executive vice president and general manager of Hearst Magazines. "If not, you can just take it right down."
Fortunately, as more and more Web products begin to pay off, we'll all be wiser, as well as wealthier. "One thing a profitable business model lets you do is choose what's important and what's not," says Alec Dann, general manager of magazines online at Hanley Wood. "The early days of the Internet were anarchy."