How to generate revenue from WWW publishing
Both kinds of company can realize revenue from the value they add to the extent in which the customer views the product as desirable. The more fashionable the clothes in the buyer's perception, the higher the price the clothier can charge.
A publisher is adding value mainly to attract advertising dollars, so the model is a little more complex. Better content may translate into more readers for the print publisher, which should, in turn, translate into more dollars that advertisers are willing to pay. The print publisher has to add value inthe eyes of both the reader and the advertiser. The advertiser is attracted more by the quality of the reader pool than by the content of the publication, the reader is more likely to be drawn by what they perceive as interesting content.
In like manner, publishers can generate revenue on the WWW by adding value for the reader and the advertiser. In addition, the WWW is a medium that offers new possibilities, which I believe will open a new potential customer for a value-added product.
The user revenue stream
Americans are used to free or cheap media supported by advertising. They are surrounded by TV, radio, newspapers and other forms of media paid for by advertising. In order to get a reader to pay for content, there has to be a high perceived value in the proffered product or service.
I believe that WWW users will pay for some value-added services. They have shown that they will pay reasonable fees to search a content archive, for example. Business people, students and researchers all sometimes have a need for timely, topical information, and are willing to pay as much as $300 an hour to access it.
Some readers will also pay to have a customized news product. A publicist, for example, will pay well to see every word that's written about her clients, and her client's competition, as will corporate officers, finacial advisors and analysts et al.
Both of these services represent value-added products which traditional print publishers can deliver relatively inexpensively (particularly true on Mac WWW servers with Applesearch).
Other products are possible, linked to transaction processing. For example, you could offer a service that would track stock prices, and place a sell order when a certain price point was reached, or a buy order when another point was reached. Possibilities to add value in this way abound for publishers with special knowledge in their fields.
Advertising
Advertisers want to target their buyer in the most-appropriate, least-expensive way possible. They pay huge sums to tailor the appeal of their ads, and much bigger sums to place those ads where their buyer is most likely to browse.
Advertisers biggest complaint about mass media like newspapers and television is that they have to buy huge numbers of non-customers to get to the few who are likely to be in the process of making a buying decision for the advertiser's product.
The advertiser's dream is to deliver their advertising to those in the throes of making a decision precisely at the right moment. Ford wants their message to be delivered to someone who is actually deciding what kind of new car to buy.
The users of a Web server tell the publisher what they are interested in with a few clicks of the mouse, especially if the publisher's site makes it easy for the user to get exactly the content they want.
Someone who asked to see all th lete model car classified ads and every recent review of new autos, for example, is more likely to be making a car-buying decision than the general populace. It is relatively easy to link advertising to just those areas where readers will go if they are interested in certain kinds of of products.
Publishers can also offer traditional display-type ads on their Web sityes, but the real value add to savvy advertisers will be the ability to focus the ads to the most likely customers. No other traditonal medium offers the potential for such tight targeting at the moment.
Other revenue streams
In addition to those noted above, a global network offers what I feel are a couple of intriguing possibilities for revenue streams that publishers do not currently commonly recognize.
Turner broadcasting packages WTBS, the cable 'superstation', so that they receive revenue from ad sales and cable users' fees But they also charge other cable systemsto run their service, adding a revenue stream.
The wider distribution opens up a market for different kinds of advertising that WTBS would not command if it broadcast only in Atlanta.
In like manner, WWW publishers should be able to package their content and core expertise in novel ways that could generate new revenues.
One new revenue stream could be generated if a publisher offered an enterprise-specific product to a local company. The publisher could offer the enterprise a custom home page just for their employees that offered news of their industry as well as any internal messages.
Publishers with special expertise can become 'programmers' for other enterpises. For example a publisher that had special knowledge of say, foood and wine, could handle providing content to an online service that wanted to add a food and wine forum to its offerings.
The publisher could offer topical content that would be a springboard for the discussions from which the online service would realize connect-time revenue.
Special knowledge should open up special possibilities to generate new streams in niches currently unserved by conventional media.
Revenue brings with it an associated risk: what if the costs associated with delivery are greater than the revenue generated?
How can you gauge the risks involved with launching a WWW publshing venture?