Can the paperless magazine make it?

Starting a national magazine has always been an expensive venture. Most mainstream magazines rack up $10 million to $15 million in costs by the time they break even, which usually takes years, if it happens at all; most magazines, in fact, fail before they earn back their investments. We,re soon

The explosion of interest in the Internet's World Wide Web is providing would-be publishers with cheaper options. Even as hundreds of print publications establish Web sites that are little more than repositories for recycled print articles, and as hobbyists establish thousands of small-scale zines, a handful of editorial entrepreneurs are trying to establish real for-profit publications on-line. They are trading print and its attendant financial uncertainties, like fluctuations in paper costs, for the uncertainties of the Web.

"It would never even have occurred to me to start a non-Web publication, simply because it would have been way too expensive," says Steven Johnson, twenty-seven, the co-founder and editor-in-chief of Feed, which made its debut on the Web in mid-May -- three months after Johnson wrote up a proposal. With its simple, elegant design, and with such regular features as hypertext-enhanced discussions among cultural critics and hypertext-annotated versions of documents like "The Magna Carta for the Knowledge Age" (which was produced by Newt Gingrich's think tank), Feed is sort of like a plugged-in version of Harper's Magazine. Its only permanent full-time employees at this point are Johnson, who in addition to his duties as editor-in-chief also does the magazine's graphic design and a lot of the programming, and co-founder and editor Stefanie Syman. Partly because of the small size of its staff, the magazine was able to spend less than $100,000 -- most of which came from Johnson's family -- in its first six months, and most of that money went toward luring writers with solid print credibility like Sven Birkerts and Howard Rheingold.

Though Feed has no current plans to charge for subscriptions and has only begun attempting to sell any ads -- and therefore has yet to make any money -- it recently unveiled an innovative ad-pricing scheme: advertisers will pay for the number of times that a page their ad is on is actually seen; for example, 8,000 accesses will cost $4,000. (Ads on the Web tend to appear at the top of a page; clicking on the ad links you to more information about the advertiser. So far, most on-line ads are charged on a per-month basis.)

Tom Livaccari, the thirty-year-old publisher of the New York-based Word, a colorful, downtown-flavored Web magazine aimed at men and women in their twenties and thirties and full of snappy first-person writing, is confident that a profit can be made in this new publishing medium: he expects Word to be in the black within a year.

By the end of Word's first year -- it launched in June -- Livaccari expects that the magazine will have spent $750,000 in start-up costs, including the salaries of twelve full-time employees. Livaccari recently signed a contract with "poppe.com," a wing of Bozell, the advertising company, which Bozell started specifically to sell on-line advertising; it also sells ads for Playboy's site and the very large site of the Netscape Communications Corporation, which distributes the most popular software for browsing the Web. With a month-long ad in Word going for $12,000 -- and with ads from such major companies as MasterCard and Saab already up on the site -- Word seems to have a running start. And its relative success has given the computer company that owns Word, ICon CMT, so much confidence in this new medium that it is planning an April 1 launch for two more Web magazines, one devoted to sports and another aimed at women.

Still, while start-up costs for these paperless publications are attractive, it remains to be seen whether they can develop a solid reader base. Former Harper's and New Republic editor Michael Kinsley's upcoming on-line venture for Microsoft will have the solid financial backing of Bill Gates's billions, but start-up publications like Feed and Word won't be able to depend on bottomless pockets while they try to build a readership. Lorne Manly, editor-in-chief of Folio: First Day, a fax newsletter for executives in the magazine industry, warns that although many advertisers are putting money into the Web right now, they'll start pulling their money out if they don't see results soon. Few Web publications currently plan on charging for subscriptions, and, other than advertising, one of the few other revenue plans that's getting a lot of attention is the idea of charging users a certain amount -- say, ten cents -- to read each article. The technology for charging users on a per-article basis should exist soon -- the Massachusetts-based Newshare Corp. is one company that is pouring a lot of money into this area --but Manly, for one, is skeptical that users of the Web, so used to Web-surfing for free, will be open to such a payment method. "That's a whole new model," he says.

Salon, a San Francisco-based arts and culture magazine launched in November by several former San Francisco Examiner employees, has come up with an arrangement that virtually guarantees it visibility: its most prominent advertiser, the Borders bookstore chain, plans to distribute tens of millions of bookmarks emblazoned with Salon's Web address, and in return Salon will provide a space for users to order books from Borders via the Web.

Visibility is certainly a challenge. Aside from attracting investors and advertisers to a new medium, Web magazines need readers to locate them in a Web that is enormous. "Part of the problem of being on the World Wide Web right now," says Shirrel Rhoades, who has worked on the business side of magazines for three decades, "is that it's sort of like you've gotten into a spaceship and gone out into the universe and colonized a planet, but it's awfully hard for people in other parts of the galaxy to find you to come visit."

Manly thinks that this phenomenon might concentrate media power even more in larger companies like Microsoft or Time Warner, because these companies, Web sites will be so prominent that many fledgling publications will end up paying fees, or a percentage of advertising dollars, to have a link on one of the larger sites so readers can find them. Manly also thinks that "link trades" will become a common way for smaller publications to improve their visibility -- for example, Feed and Word could each agree to include a link to the other's site on their own sites. With enough link trades, and a little word of-mouth, he says, a small publication could begin to develop a readership.

So, though there has been some encouraging news for these publishing pioneers, it is clear that start-up Web publications, despite their low overhead, are not going to have an easy time turning a profit. "Publishing something on the Web certainly makes you a publisher," Rhoades says, "but it doesn't really make it a publishing business. The real challenge is going to be making a business out of this."

Feed:

http://www.feeding.com Word:

http://www.word.com Salon:

http://www.salonl999.com