Online Archives As a Profit Center

Folio: The Magazine for Magazine Management, March, 2000 by Jane E. Zarem

YOU CAN MANAGE THE JOB YOURSELF, HOOK UP WITH AN E-COMMERCE SERVICE PROVIDER, OR FIND A HOSTING SERVICE THAT WILL DO EVERYTHING FOR YOU, START TO FINISH. JANE E. ZAREM

What could be smarter for a publisher than reselling content online? Finding a no-hassle way to manage it, for one thing.

Editor & Publisher, for example, successfully managed its own online archives for several years. Then, the software product it was using was dropped by the manufacturer. "We were looking for an alternative when Infonautics came to us with a turnkey solution," says Ian Anderson, MIS Director. "The archives fit into a neat package that we could conveniently outsource."

In June 1999, the publisher did, in fact, outsource its archives to Infonautics, whose online archives hosting unit has since been acquired by Bell & Howell Information & Learning Inc. of Ann Arbor, Michigan.

More and more publishers are exploring the opportunity to make money by putting their archives online as they realize the value of easily searchable online content. And the stakes are high.

"There's high value in publishers' archives," says Jason Pierson, director of publisher services at Bell & Howell, whose publisher clients are earning "anywhere from hundreds of dollars a month to $20,000 a month" from their online archives.

Publishers have essentially three options: Do the job themselves, work with an e-commerce service provider, or locate a hosting service that will do it all for you.

"The best thing about outsourcing the archives," says Anderson, "is that they do everything--billing, customer service--everything. And the monthly checks we get are pretty nice, too."

Money, money, money

Online archives hosting is a relatively immature market, and only a few companies currently compete for pieces of the business. For example, Bell & Howell covers both internal as well as Web-accessible archiving and has relationships with more than 8,000 publishers, most of which publish magazines. Content aggregator Northern Light Technology Inc. (Cambridge, Massachusetts) is something of a hybrid--a comprehensive Web search engine that includes an archives hosting service. Knight-Ridder's Media-Stream Inc. (Philadelphia), another giant, specializes in newspaper archives.

At Northern Light, senior vice president Robert Nelson says publisher revenues range from hundreds of dollars per quarter to thousands and even millions. "Some publishers of research reports, whose products cost $3,000 to $4,000 each to download, do $100,000 in a day," he says. Magazine publishers, whose articles are priced at $2.95 each, can expect something considerably less. Still, he says, "If you're a well-known brand that's fairly heavily accessed by the business community, you can bring in tens of thousands of dollars in a quarter."

Most users willing to pay to access archives tend to look for business-focused information, Pierson says, and industry-specific information carries a higher value than general magazine content. ReSearchers--both in business and academic settings--are the best users to tap, and these people usually subscribe to the service on an annual basis.

The cost to the publisher

Bell & Howell has long experience dealing with archived material, having microfilmed data since 1938 as University Microfilm (UMI). In February, the company rolled out its new brand, ProQuest Archiver (www.pqarchiver.com).

Publishers must first pay a one-time setup fee, which could be $1,000 or up to $20,000, depending on what's required to get the content into Bell & Howell's database and what in-house technical resources are available. There's a backfile conversion fee if the data go back beyond two years.

Content is submitted either through an electronic feed or as hard copy, which is scanned into the system. "We handle both text and graphics," says Pierson, "and do all the indexing." ProQuest Archiver seamlessly links to a publisher's Web site. When a user logs on to the site and clicks a button called, for example, "Search the Archives," everything from that point on--the search engine, credit-card processing, customer service and technical support--is handled by the host service. In most cases, users are allowed unlimited free searches of an archive database to find articles, which are weighted by relevancy to the topic, and can read a few descriptive sentences. They have to pay to view the full text.

The monthly fee Bell & Howell charges publishers to host the archives can be "anything from a 70-30 split, with the publisher getting the bigger chunk, to 60-40 with us getting the bigger chunk," says Pierson. "Some publishers want a lower fee and will share the revenue," he says. "Others prefer a fixed fee and all the revenue. It's all negotiated." In any case, checks for the proceeds are cut monthly and sent, along with a report, to the publisher.

The "free" service option

Northern Light claims to have in its database some 6,000 titles (magazines, journals, etc.) under license, more than 14 million articles, several high-end research reports, and 60 fully indexed newswires. Any visitor to the Northern Light site (www.northernlight.com) can search this collection, the Web, or both. Publisher clients benefit from the increased visibility (there are millions of daily users of the Northern Light search engine); and Northern Light benefits by aggregating quantities of rich content for its database. And because the deal is mutually beneficial, publishers pay no setup fee and no monthly service charge. Each time an article is sold, that information is gathered into a report. At the end of each quarter, the publisher receives the report (at article-level detail), with a royalty check.