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Jun 12, 2002
Case Study

Daily Biz Email Catches 10% Free-to-Paid Conversion: The Story of The Wave

SUMMARY: Check out this Case Study to learn how the editors of The Wave, a free daily email newsletter for the seafood industry, got a solid 10% of their thousands of readers to pay between $110-199 for an electronic subscription. Includes some details about their digital rights management (DRM) system and how they handled customer service, as well as a sample of the initial "we're changing to paid" email letter they sent to readers.


Back in 1999, was one of more than a
dozen business-to-business ecommerce portal launches hoping to
make millions from a percent commission of transactions the site
thought professional seafood buyers and sellers would make
through its services. was lucky. Instead of being crushed outright by
its marketplace's profound lack of interest in ecommerce portals,
the site swung a deal to be acquired by competitor WorldCatch.
WorldCatch then made one of the smartest moves of all and also
acquired a traditional brick and mortar seafood company to help
pay the bills.

At the same time, WorldCatch kept one of Fishmonger's best assets
going; a daily email newsletter called The Wave.

By early 2002, The Wave's team knew their time had run out.
You can not remain free forever as a profitless arm of a for-profit

Despite The Wave's popularity (everyone who is anyone in the
seafood buying and selling profession reads it avidly), industry
advertisers were not remotely comfortable with sponsoring an email
newsletter or its Web site. The fact that The Wave's parent
company was a now competitor to some did not help either.

It was do or die. The Wave had to charge for subscriptions and
get lots of readers to pay.


The Wave had two factors solidly in its favor: An
enthusiastic opt-in audience of thousands daily readers who had
been appreciating it for two years already, and superior

The Wave is lovingly created by two professional journalists with
years of experience covering the marketplace; John Fiorillo in
Seattle WA and Dan McGovern in Portland ME.

Both Fiorillo and McGovern write their own bylined columns every
single business day (see sample issue below) that feature the
personality and opinions which online readers find compelling.
Then the rest of each daily issue is packed with the standard
formal business news plus links that readers need to get on with
their day. Each issue is a personality plus hard news one-
two punch.

Unfortunately editorial this good also equals a huge pass-along
rate. The Wave's team was afraid that any paid email
subscription buyers would simply send copies to their pals for

Luckily, The Wave had one big advantage over most publishers: A
skilled in-house tech team interested in helping out. Fiorillo
says, "We'd sit down for a beer with the IT guys and say, 'If we
can only stop readers from forwarding their issues.' Over a
year, that conversation developed into a system."

This self-invented digital rights management (DRM) system ensured
that only paying subscribers could access the content. Each
daily issue would still go out to the thousands of free opt-ins,
but only subscribers could use the big fat gold key graphic in
the upper right corner to "unlock" access to read beyond the
headlines and brief column summaries.

Fiorillo notes, "If you go to your neighbor's PC and you try to
log in, it will not let you even if you give it your user name
and password. If you try to highlight, cut, and paste, a box
pops up saying 'This is copyrighted material.' They can still
print. We could have stopped that too, but I thought it was
going a little too far."

Next Fiorillo, who doubles as VP Online Media for WorldCatch
along with writing for The Wave, decided on a pricing strategy.

"First we backed up and looked at the cost to do this each year,"
admits Fiorillo, "and then figured how many subscriptions we
honestly thought we could do. Everything including ContentBiz
said we're lucky if we get a 3% conversion rate. But I felt in
my head we could get 10%."

Based on these hopes, Fiorillo set two types of prices: The
first being a $199 "introductory offer" for single subscriptions
(which let him market a $50.00 savings from the 'regular price'
of $249.00 for the first few months).

Fiorillo knew there were some pretty big companies and government
agencies reading his daily, so he, together with McGovern and
Customer Support Manager Carol Crosetto examined the free opt-in
email list for common email addresses endings. They discovered
bigger organizations tended to clump into groups of particular
sizes, so Fiorillo invented a pricing structure for these:

"We said ok, we'll sell a four-pack, an eight-pack, and a 16-pack
at different discounts. We also have an over-16 pack that's a
straight out $110 per person."

On April 3rd, the thousands of free subscribers to The Wave
received an emailed letter from the editors (see sample below)
which reminded them of the value they had been getting from the
publication, and asked them to pay "less than a buck a day" to
keep getting it.

From that day on, each issue of The Wave carried a reminder note
that the publication would no longer be free as of May 8th.

The notes featured a countdown - You've got 14 days left! - and
often included often lengthy testimonials from heavy-hitters in
the seafood industry, such as CEOs of name brand companies and
heads of related associations, saying why they found the
publication invaluable.

The Wave's website also had a lengthy FAQ on subscribing,
including pricing, reasons to subscribe, technical Q&As on the
new security system, how to order by phone or online, etc. The
site also allowed readers to request to be invoiced and pay by

Notably it did not say that advertising would be going away.
Instead readers were encouraged to contact The Wave for "more
affordable" ad rates.

The Wave's team hovered by their computers through the entire
conversion process. Programmer Garrett Weaver in the IT
department whipped up an application that sent a little graphic
across everyone's PC screens whenever a potential subscriber was
in the section of the site about subscribing. "We call it the
bat," says Fiorillo.

If it looked like that site visitor was having trouble signing up
for any reason, one of the team would pick up the phone and call
him or her right then and there to help out. Fiorillo admits
some "got spooked" by this unusual service, but "most of them
were just so blown away by our customer service."

The most common problem was people trying to use American
Express. (The Wave only accepts Visa, Mastercard and checks.)

The team kept up this level of hands-on intensive customer
service during the first anxious few weeks of the paid service,
as new subscribers learned how to use their golden keys to unlock
the news on their computers, and got used to the new security
restrictions that prevented them from sharing content with non-

There were adjustments on the editorial side as well. One of the
ways that The Wave had stood out from its competition in the past
was to arrive on subscriber's desktops around 6 A.M. PT (9 A.M. ET)
every single morning. Now that 6 A.M. timing became even more

Fiorillo explains, "That was one thing that caught us off guard.
When you're free you can miss a day or get it out 30 minutes
later. Now it's a big deal. 'Boy, I'm paying for it to be here
at 6am!' I understand and fully agree with that."


A stunning 10% of free subscribers converted to paid with roughly half of the orders coming in from April 3 - May
5th, and then a solid 10% or more coming in the week of May 6th
when the new gold key locked out free readers from seeing more
than headlines. The bulk subscription offers were very
successful, for example the government's Fisheries Department
took over 100 subscriptions in one batch.

Fiorillo says, "As May got closer, the number of subscribers
signing up and paying were five a day, 10 a day, 20 a day it
just kept going. Then on May 8th, when freebies realized they
had no access to stories anymore, those were the overwhelming
days of conversion obviously."

Now, five weeks after that day, the conversions have slowed down
to a bare trickle again. "We think we've gotten the most we can
out of the tease factor at this point," says Fiorillo. So, next
he's considering other promotional ideas as well as ancillary
revenue streams. Plus, he's already considering how to get the
most possible renewals next year (Fiorillo felt autorenewals
would not be a hit in this very traditional industry).

Of the whole experience Fiorillo says, "It's been a lot of work,
but it's been really rewarding. Dan and I have said for a long
time that you just gotta know if people will pay. If people will
pay for what you do, it's a validation of a particular kind
that's important."


Sample issue of The Wave's "locked" email newsletter

The Wave's home page

Sample copy from The Wave's first announcement to free readers

**************** Sample *********

Dear Wave Subscriber,

Since 1999 The Wave has been delivered to subscribers - daily -
with valuable, timely, targeted news and market information
specifically for the seafood industry at no cost to its readers.
For most of us in the industry, it's how we start our day - with
the first cup of coffee.

It may surprise you to learn that xx,xxxx subscribers in over 50
countries receive The Wave each business day.

To give you an idea of the amount of effort put into this
service, here are a few other facts that may surprise you:

- We've provided over 8,000 seafood-specific news articles
and market reports since '99.

- We've emailed 100s of breaking-news bulletins when important
news has happened.

- Our forum of over 1,000 letters to the Editor has given you
a voice.

- We regularly feature 100s of critical industry reports,
studies and polls

It's been a big job, and, as they say, the numbers don't lie -
everybody reads The Wave - and for good reason.

As most of you are aware, the idea of everything for free on the
Internet didn't quite pan out. And as every businessperson
knows, no company can provide a service or product free forever.

So - while diligently working to continually improve our news and
services - we've also been developing plans to take The Wave to
the next level.

Beginning May 1st, we'll begin charging a subscription fee for
The Wave. In other words - we'll be asking you to pay a
reasonable fee for this valuable information resource.

For less than a buck a day you can continue to make The Wave part
of your daily routine - just like that first cup of coffee.

Get The Wave delivered straight to your desk each morning and
deal in greater confidence with the rapid changes affecting the
global seafood business.

I hope you'll join us.

John Fiorillo, VP Online Media
Dan McGovern, Editor


***************** End Sample **********
See Also:

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