re: ONLINE-ADS>> The cost of content

Scott Cherkin (scott_at_webgenesis.com)
Thu, 25 Sep 1997 19:41:33 -0500

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markm_at_virtualfranchise.com (Mark Montgomery) wrote:

>It's time for users to learn that it is in their best interest

>to pay part of their own way on the Web, particularly if they want

>premium content to survive outside of five or six global super

>conglomerates that have endless conflicts of interest. We've

>tested pay for use and so have dozens of others. It's not easy,

>and it only pays for a portion of overhead, but that's business.

I think Mark touched upon something that will be very important in the
survival of content-oriented sites. Getting users to pay for content
is tricky but serves as an excellent vehicle for maintaing cash flow as
the online advertising industry matures.

The Globe (http://www.theglobe.com), the most dynamic, fully integrated
community online, has one of the only successful paid subscriber models
on the web. Subscription fees account for 60% of our total revenue.
1.5 years ago, The Globe launched the subscription fee as it appeared
that advertising revenue was not going to be sufficient.

It is not a simple equation to get users to pay for content. The Globe
has done it by creating value in the most integrated community
technology on the web. We have developed a hip, full-service
environment that integrates member homepages, gaming, chat, bbs, news
and info and music and movie reviews and more. If you are chatting in
our chat room, you click on a users name and get taken to their
homepage. At the homepage you can leave the member a piece of email in
The Globe's proprietary internal email system. This technology
packaged in a young, hip design has proved worth $25 per year to The
Globe's gen-x, young adult audience.

While $25 per year is not a large sum of money, it serves as a
significant revenue stream and allows us to offer a far more reasonable
CPM than most sites.

Further, with two strong revenue streams The Globe was able to attract
the largest private investment of a web site ever last month. Michael
Egan, the founder and chairman of Alamo Rent-A-Car, invested $20
Million because he saw a great opportunity to capitalize on The
Globe's web community.

The cash infusion is based in the idea that once you have a aggregated
enough eyeballs you can start to sell them things. In 98, The Globe
will add a THIRD revenue stream with an aggressive merchandising
initiative.

It is not a simple equation but if sites intend on surviving they
really need to look investigate having their users pay for their
content. Check out some of our press from Sept 19 in the NY Times that
details more about our investment and our subscription model:

http://search.nytimes.com/search/daily/bin/fastweb?getdoc+site+site+7587+1++=
%28Egan%29%20OR%20%28%29%20OR%20%28%29

__________________________________________________________________________

Scott Cherkin Phone: 212-367-8823

The Globe by WebGenesis, Inc. Fax: 212-367-8603

31 West 21st Street email: scott_at_webgenesis.com

4th Floor web: http://www.theglobe.com

New York, NY 10010

Come check out the globe. <<http://www.theglobe.com>

__________________________________________________________________________

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