PUBLISHING ON THE INTERNET

Publishing is probably the most common application of the Internet today. This is because it offers existing and potential publishers two big advantages over traditional publishing methods. It is both:

A low-cost publishing medium AND
A low-cost distribution system.

Despite these differences, however, publishers can still generate revenue in all the same ways they always have: by subscription, by advertising and by unit sales (i.e., as with books and newsstand sales of magazines).

Of these three revenue generating methods, advertising is--so far--the most popular. Advertising is most appropriate when the information being published has a relatively low or transitory monetary value (like news and sports information), but tends to attract a wide audience. ESPN, the Wall Street Journal and several other news organizations, that all have long experience selling ads, are using advertising on the Internet today.

Unit pricing is most suitable for database and information service providers who offer information with a high intrinsic value, such as marketing research results. Such information has traditionally been sold in report, book or CD-ROM form. International Data Corporation, a computer research firm, and Knight-Ridder's Dialog service, now sell their databases and reports quite successfully this way over the Internet.

The subscription approach, however, is just beginning to take off. Many publishers are now offering periodic publications at no charge, with the idea of charging for subscriptions once they build a reputation. Individual, Inc., one of the most advanced subscription publishers, culls hundreds of news sources to prepare NewsPage, a daily news summary customized for each subscriber. NewsPage readers select the topics they are interested in and the news sources they want monitored. Then they get a new NewsPage every day, constructed by a computer in a newspaper-like format, and covering only the information they asked for. Although Individual does not release circulation statistics, its client base is apparently growing rapidly. Individual doesn't rely wholly on subscription revenue, however . . . it also has advertising. In fact, it offers discounted subscriptions toreaders who are willing to give their names and demographic data to advertisers. This innovative combination of revenue sources makes NewsPage a model Internet publisher.

Aside from news and sports, the most common type of information published in the Internet is data about the Internet itself. In fact, Internet directories are among the most popular sites on the World Wide Web (the interactive multi-media portion of the Internet where most Internet publishing is done). The best known and most popular of these is one called Yahoo, which has a searchable index and a categorized listing of Internet locations. Thousands of Internet users view the Yahoo index every day because it's both free and very useful. Yahoo used to be supported by Stanford University, but it was recently privatized and is converting over to an advertising revenue support base.

While it's clear that the Internet's low cost creates an advantage for the publisher, what's not so clear is that it also creates a risk. Because it's so easy to publish on the 'net, there are virtually no "barriers to entry". Thus, "copycats" are rampant, making it exceedingly difficult to establish and maintain a competitive edge. The only way to do this is to publish unique and proprietary information (note: information on the Internet is copyrightable), to build a brand identity or to attempt to find some other marketing edge. While it's not certain which, if any, of the publishers currently using the Internet have found the right formula, the market is still immature and there's plenty of room for current, as well as new publishers to exploit it.

ABOUT HARVEY GOLOMB

Harvey Golomb is President of NETSCAN Technology Corporation of Fairfax, Virginia. NETSCAN is an Internet business and marketing services consulting firm. He has spent 25 years in management and marketing positions with leading companies in the computer manufacturing, computer sales, electronic publishing and computer imaging fields. NETSCAN provides Internet consulting and support for both private and public sector clients.

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