Safety net - online services by periodical publishers - Interview

Folio: The Magazine for Magazine Management, March 1, 1994 by Lorne Manly

Publishers should protect themselves by going online, says Jonathan Bulkeley, a magazine executive turned computer-network evangelist.

Q: Publishers are increasingly baffled by the array of new-media options. There's CD-ROM, online, and soon, interactive television. Should publishers pick just one new medium to concentrate on, or dabble in them all? A: My take is that publishers should do CD-ROM, but not at the exclusion of online. They should look at their products, evaluate what their markets are, and figure out how to utilize both. I believe that what publishers have is a franchise and they need to expand that. They need not only to sell magazines, but to sell other products and other ways of receiving information. As to whom to pick and where to go, of course I'm biased on that as far as online goes |laughs~. But publishers should talk to everybody and figure out who is the best fit for them, and then try one, at least.

Q: The head of a multimedia unit at a major consumer-magazine publisher told me recently that publishers should get into CD-ROM to prevent brand erosion. Does that reasoning hold for online services as well?

A: That sounds a little paranoid--and in some ways, magazine publishers should be paranoid. But |going online~ is a way to encircle your customers, a way to provide information in a different format to parts of your customer base. I see it as a way of consolidating your relationship with your subscriber. It's in a different medium and works on a different platform, but it will help you to cement and position your title as the leader in that niche.

Q: How does going online achieve that?

A: You can reach people you may not be reaching through the print product. But more important, |going online~ allows you to communicate with readers, lets readers communicate with the editors, and allows readers to communicate with one another. If you're interested in science fiction and you read Omni, unless you're on a bus sitting next to somebody else who is reading Omni, you're not going to be able to talk to others about what's in Omni this month. But an online service can provide that. You know that any time you go into the Omni area, there will be people who have similar interests.

Q: What else is in it for magazines?

A: They make money. Typically they're compensated in a couple ways, what we call a marketing partnership. We compensate them for usage in their area--we calculate the number of hours users spend in their area, and magazines get a percentage of that revenue (ranging between 10 and 15 percent of revenue). And they get a piece of the revenue generated by subscribers who come into our service through the magazines' marketing channels, such as ads that run in the magazines.

Q: What are the costs for a magazine when it goes online?

A: The magazines have to make a marketing commitment. We do not charge anybody to create an area, and we do not charge them to put advertising on the system. What we say is, "We'll create the area, we'll build it for you, but you have to give us a marketing commitment on your end so we know we'll be |getting~ customers who are going to use this area."

We also expect editorial integration. |Bulkeley pulls a copy of Time from his briefcase and points to the "Letters to the Editor" section.~ You have the option to send letters online directly to the editors. They've printed some of them, and given the AOL screen name of those people. Also, Time is actually publishing more information online than in the magazine. They put up additional stories each week that haven't appeared in the magazine. In cyberspace, there's lots of room--you're not limited by the advertising you get. Q: What does a magazine have to do to make its material usable?

A: The toughest part is the sending of text. It's not that difficult, but that's where we have to come in and train somebody in how to deliver text and documents to us. Most magazines are digitizing it anyway, or it's in Quark files, which can give us ASCII text.

For the other parts of the area--message boards, the chat area--the editors aren't providing any content, it's just functionality that exists to let people talk to one another under an umbrella called Time Online. They don't have to do anything except monitor the message boards, and participate if they want. You don't need to staff up for it; it will take some management time internally. Q: Why have online services been so aggressive in pursuing magazine companies as marketing partners?

A: We don't create content; we're just a marketplace for information, and we also have a technology that allows people to interact. Magazines represent specific interest areas that are important for us to have on our service, whether it be news and Time, or whether it be science fiction and Omni, or kids programming and Disney Adventures, or digital information and Wired. Each of those is its own niche, and it's important for us to have content providers within those niches. And |hooking up with magazines~ which already have marketing and distribution channels is a way for America Online to get new subscribers.