Web Survival Guidelines for small magazines

Folio: The Magazine for Magazine Management, March, 2000 by Cheryl Woodard

THE MOVE TO THE NET IS THE BIGGEST CHALLENGE IN THE HISTORY OF BUSINESS. IT'S EVEN HARDER FOR SMALL MAGAZINES, WHICH HAVE LESS OF EVERYTHING--MONEY, EXPERTISE, TIME AND STAFF. HERE'S HOW THREE SMALL PUBLISHERS ARE WORKING THE PROBLEM.

Streamline Media CEO Eric Rhoads remembers the lesson of his first Web site ad sale: The usual rules definitely don't apply. An advertiser had just seen the brand new site for the radio-industry magazine Radio Ink and called to inquire about a sponsorship deal. Rhoads had no idea how much to charge. "I was thinking maybe $600 for a three-month cornmitment, but he spoke first and offered me $20,000! Now I ask, 'What's your budget?' before we start to negotiate."

All magazine companies face the challenge of adapting to the Internet. But the challenge is even greater for smaller magazine companies like Streamline Media, which have less money, fewer staffers, less expertise, less time and, in the eyes of some, less need to be online. Numerous questions--from how much to invest and how to finance, to questions regarding staffing, outsourcing and determining ROI--have to be answered in the transition to e-business.

The good news is that small magazines can create revenue-generating Web sites that effectively extend their businesses to the Internet without a six-figure investment and an office full of stock-option-addled new employees. In fact, by making a minimal investment and doing some strategic, out-of-the-box thinking, many smaller publishers are effectively experimenting with new ways to make money from current readers and advertisers; harnessing customer feedback to improve print products; defending against Web-based interlopers; and exploring new partnerships.

An investment in a Web operation can cost as little as $6,000 and take up less than a full-time share of one staffer's time. The key, observers say, is vision and energy at the executive level. Someone or some group of people must set the ball in motion and keep it moving forward. For small publishers who want to build out their Web sites, here are three broad guidelines.

Let the site fit the mission

Vermont Life Online started out modestly and, by most standards, is still modest. In fact, says Andrew Jackson, publisher of Vermont Life, the total investment for three years on the Web has been about $6,000. None of the 11-person staff at the Montpelier, Vermont-based magazine is dedicated exclusively to the Web. The site is updated quarterly, like the print magazine.

"Web sites are like fax machines," Jackson says. "If you're in business, you need one." But in his view, it doesn't have to include the bells and whistles--it doesn't need to be a storefront, doesn't need to have as-it-happens breaking news. All his Web site must do, Jackson says, is provide real value to its visitors and accurately represent a magazine's editorial quality.

But that's changing. A growing amount of content, combined with higher visitor expectations, is pushing costs up. Now VLO uses an outside vendor to manage the site. And plans include an e-commerce version of the magazine's ancillary products catalog. Jackson estimates the site will require a $10,000 budget in 2000, but still, the investment is paying off handsomely: The magazine gets 40 to 50 new subscriptions--at $14.95 each--from the site every week, with a 40 percent pay up rate.

Jackson says his only reservation involves the steadily growing need for staff time to manage the site. Still, he feels that smaller magazines can do a lot on the Web, and even make money, with a low-cost, keep it-simple approach. Today the VLO site generates $6,000 annually from advertising and $16,000 from subscription sales.

The Internet approach of Air Age Publishing is the antithesis of Vermont Life Online, although still very much in the realm of the small publisher.

The 70-year-old, family-owned company, based in Ridgefield, Connecticut, publishes one magazine for full-scale aviation buffs, Flight Journal, and three magazines for radio-controlled modeling enthusiasts--Radio Control Car Action, Model Airplane News and Radio Control Boat Modeler. It also sells books, newsletters, model-building plans and other ancillaries, and has 60 employees. "Our strategy is to engage in evolving technologies so that we don't get swamped by Web upstarts who see our niche as just another dot.com opportunity," says Thomas Atwood, associate publisher.

For Air Age, keeping up with online competitors means offering all the newest and hottest Web technologies: chat rooms, e-commerce, video and audio clips, daily news updates, and hybrid newsletters that are both printed and backed up at password-protected, multimedia Web sites.

The company began launching Web sites in 1997 and now has several of them. The main question has been how much to invest and when.

"Based on our experience, we would project that, in today's market, it would cost between $20,000 and $40,000 to build an array of four sites using talented in-house staff," Atwood says. "This assumes the sites would offer some magazine content. This would include an online store to sell subscriptions, books and any ancillaries, a chat room and at least two sites supporting magazine properties. To accomplish this using outside consultants, we would project a cost of $50,000 to $100,000."