by Dana Blankenhorn
For the Week of September 20, 1999

This Week's Clue: Standard Issues

This Week's Clue: Standard Issues

Shameless Promotion 

SSP (Shameless Self-Promotion)

Running Political Interference

Permission Marketing Has Far to Go

The White Shoe Shuffle

Clued-in, Clueless

My first true Internet adventure was as part of the launch team for "Interactive Age." The first Internet trade book's ad sales effort was aimed at telecomm product vendors, not Internet companies. At that time, companies like Netscape lacked the money to advertise (believe it or not), and the rising cost of paper (which impacted all corporate operations) moved CMP Media Inc. to fold the magazine after just 10 months. Our "arch-rival," "Interactive Week," , also struggled, placing its focus on Web technology.

"The Industry Standard," launched by IDG in early 1998, was the first Internet book to aim both its sales and editorial efforts at Internet content, and at first that looked like a dicey proposition, too. You need to understand something about the magazine business to understand how dicey the proposition was. 

Most print publishers commit five years to a start-up. They spend their first years' budget with the expectation they'll get almost no return, except in readers and goodwill. If readers become loyal, however, they should do better the second year, break even the third, and by the fifth have a wildly profitable, valuable franchise. So long as the curve of ad pages is going up, and the volume of "discounted" (below list or book rate) pages are going down, publishers can sleep at night. This is in contrast to the Web business model where if you don't take some hefty market share early, you won't see a late. 

The point is that after 18 months, "The Industry Standard" is a business success. It was printing 70 pages (and more) of ads in each issue through the summer, and the September 13 issue clocked in at a hefty 144 pages total. Best of all (for a computer trade publisher) the Standard is drawing ads from outside the industry, from firms like British Airways and Absolut Vodka, not just tech companies and Web sites. 

Here's another secret of the magazine business. At a product launch its ranks are filled with senior editors. When the dollars start rolling in, the effort is scaled back. Extra pages (beyond the basic nut) are filled with charts, reviews and news stories. Features become rote exercises of case studies (single interview stories) and other filler (like art) designed to interrupt the flow of ads at minimum cost. Editing becomes more cursory. A story on digital cash might tilt toward an outfit the paper is partnered with . Or a column might sneak by comparing opponents of unregulated monopolies to Kansas fundamentalists. These are just differences between a start-up trying to establish itself and an institution fighting to fill pages. First, you establish your own voice -- then you bring in others. 

One great opportunity for the successful magazine publisher is the list. A list costs little to create, it can be branded, and it fills lots of pages. It offers both contacts to reporters and the opportunity for building other products down the line. The Standard 100, "an annual listing of the most important and influential companies of the Internet Economy," launches with this week's issue. (Honest guys, I had no inside skinny on this, the release just hit my desk Monday.)

The question is whether, on the Internet, a publisher can get away with such a conventional strategy. One Clueless feature (like a recent piece on spammers) can ruin a reputation. We competitors can subject a magazine like the Standard to death by 1,000 cuts, leveraging the Internet's lower costs. ClickZ grabs the e-commerce experts who want a good read, EcommerceTimes.Com grabs the Web small business community, and Iconocast grabs the terminally hip. 

There's no way to answer these questions right now. There's just too much money floating around for the Standard to sink. In previous tech booms, this would be the end of the story. Books like IDG's "PC World" went on autopilot for 15 years and rode the boom to its heights. But the Internet isn't print, and treating it with print sensibilities (even in print) doesn't seem likely to work.

The best Clue this may be true can be found in the Standard's own pages. Former "Atlantic" and "US News & World Report" editor James Fallows was recently brought in as columnist (I guess to add some class to the operation). Rather than just pontificate (anyone can do that) he actually did some reporting, interviewing a dozen economists about the Web's ultimate economic impact. Most (judging by his quotes) are still Net-skeptics. One estimated more than half the Web's new stock value is pure speculation, while two others wondered aloud about how many ex-billionaires the Web will create in three years. 

So let's call this Fallows' Clue. Nothing is certain except uncertainty. Those are choppy waters indeed through which to steer a print publication. 

Shameless Promotion


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SSP (Shameless Self-Promotion)

This week we begin our adventure at Voxcap.Com, discussing how next year's elections might impact the future of the Internet. I hope to see you there. And on October 8, at 10 AM, you can see me, live and in person, in a one-hour session at Internet World in New York. See you there.

I write daily for ClickZ, and appear every Saturday at 6 Eastern on TechEdge Radio in Phoenix, Arizona. I write monthly columns for  NetMarketing, Boardwatch, and  Intellectual Capital. Watch for my series soon on VoxCap. The lead item here is also the Monday e-commerce column of Andover.News. You can still buy my book . Subscription instructions are at the bottom of each issue.

Remember that it's still journalism -- checking the news, calling people, listening carefully and writing on deadline -- which keeps the Clues coming. If you're looking for excellent work, give me a call at 404-373-7634. Now back to the show...

Takes on The News

Political Interference

One of the most infuriating aspects of the Standard is how much sense its lead editorials sometimes make. Last week, for instance, James Ledbetter warned that the industry's super-libertarian views (cyberspace is nowhere) give policy initiatives to local vice cops and alienate the majorities needed to keep the online world free. That's Clued-in thinking.

We're not just talking about local judges or district attorneys here, but a Republican Congress that should be cyberspace's natural ally. (They're supposed to be the party of less government, right?) Even the First Amendment can be abridged, noted Judiciary Chairman Orrin Hatch last week, if ISPs are simply deputized to refuse access based on what their customers have written. (The Wiesenthal Center applauds this, but what if it were applied to them?)

No one is denying that when hate speech becomes hate crime it should be prosecuted, and the two are often lumped together. They're completely different. A hate crime is a physical act against a real victim. Hate speech is in the eye of the beholder. Senator Hatch knows that, but he's a politician, and when constituents push even principles can be bent. Everyone in cyberspace needs to understand that.

Permission Marketing Has Far to Go

I talked to Seth Godin last week for a future story on Permission Marketing, and one point he made stood out. He said that not only is Permission Marketing a journey, learning about it is also a journey. Yes it's misunderstood, sometimes it's opposed, and some spammers have taken its name in vain. But the fact is it works, it's worked in the past, and as more people use its principles the market will bring this truth to light.

So it was with some satisfaction that I got a press release from A&E Networks about their new "book club." (They also have one for their History Channel . Book Clubs are a powerful form of Permission Marketing. If someone has permission to send you a book every month (even if you can throw it back), you're going to buy a lot of their stuff.

Unfortunately, as spokeswoman Vicky Kahn explained, this is more of a reading club than a Book Club. Experts will discuss a different book each month and you'll be able to buy each selection directly from the site. The site's staff will recruit the experts, choose books based on the networks' programming, and act as backup for inexperienced moderators. The point is each journey of 1,000 miles starts with a single step. You can't leap the gap in a single bound.

The White Shoe Shuffle

Pity Clueless Big Media. Broadcasters can't help but draw big numbers to their Web sites. But they confuse visits with success, and their executives confuse the attendant disconnect as an empire to be fought over, not a problem to be studied.

The result is you get a lot of shuffling of the Titanic's deck chairs. The names chosen to sit in those chairs when the music stops are usually broadcast or print executives, not Clued-in online experts. These decisions can then be knocked into a cocked-hat the next time the suiteheads decide to play their little Wall Street games.

So let's say a quick hello to Nicholas Butterworth of SonicNet. About one week before Viacom bought CBS, he finally got Viacom's current online properties combined into something called MTVi, and he gets to report directly to broadcast executive Fred Seibert with the title of CEO for MTVi. Take a quick bow, Nick, then get back into those turf wars.

Time-Warner and TBS have been fighting over their online properties ever since their merger. CNN's efforts have gone much better than those of Time, not only in drawing traffic, but in drawing revenue, so it should come as no surprise that Atlanta is on top of this turf war (for now). Rushing to the rescue of Time Warner Digital Media, however, is William Burke. He's the right age, 33, but he's not from CNN Interactive. He's been working as President of TBS, the company's first cable broadcast network. (It's now memorialized in my zip code, 30317 - WTBS was at Channel 17 for two decades before being extricated a few years ago.) He may be better equipped than any online executive at Turner to fight for the changes that can make the Time sites profitable, but it all means change will take time. In the world of the Internet, time is not something anyone has much of. Even Time.

Clued-in, Clueless

Clued-in is eTrade chairman Christos Cotsakos, who told analysts he was seeking a "partnership" with a storefront broker . That would give eTrade a Schwab-like presence while avoiding Schwab's costs, and maintaining a big price advantage.

Clueless is BigFoot.Com . At minimum, this venerable community site may be insufficiently attentive to the issue of spammers using its e-mail addresses, enough to generate messages to I-Sales' HelpDesk list from good people like Mark Roberts. At maximum...I'm getting a headache.

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