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Jul 12, 2000
Interview

Dave Evans of Content Site Nerve.com Reveals How They've Come Close to Achieving Profitability

SUMMARY: We hear it all the time -- “You can’t make a profit with content on the Web.” Well, guess what? Privately owned content site Nerve.com is just about to go into the black. We called up their marketing leader, Dave Evans to find out how.
Q: How did Nerve.com beat traditional name-brand publishers in your same field who are online?

Evans: We took a fresh approach to dealing with sexuality, culture and gender. Nerve strives to be tastefully controversial and to treat sex as a subject versus objectifying it.

What Nerve found is there a very fine line between keeping your content high brow and sensational. Other sites tend to go towards sensational end of sexuality. Our Editor in Chief and Founders have a real belief in our brand and never really strayed from that despite temptations.

Also we’re targeting women equally to men. The traditional publishers are very male-centric while we’re sympathetic to both sexes,

Q: How profitable are you guys now?

Evans. We are very close to being profitable. We only have 28 people and are privately held. We did one round of outside investment, but then that was it, and we used the money wisely.

Q: We’ve heard your revenue model’s been changing recently. What’s up?

Evans: Previously we were purely ad based. We still see it as revenue channel we’ll always go after, but with the type of traffic we get [800,000 monthly unique visitors] there are other ways to purpose that.

For example, our community-based message boards are a now subscription-based service. Users get personal classifieds, and access to our private message boards. Those boards are rather active. We’re charging a nominal subscription fee of $5 per month now. The Nerve demo is very young and hip so we’re doing a redesign and rebuild and will change the business model to pay-per-use in Mid-September.

Q: Why are you switching from subscriptions to pay-per-use? Isn’t that risky?

Evans: I worked at another personal servive in past and pay-per-use worked better. It gives users new flexibility and the site can add new features on continually. Subscription-based models limit your ability to enhance tech - you have to introduce multiple subscription levels for new things, which gets quite messy. With pay-per-view, if we add on two-way video we can then charge for that. So it forces us into innovation to raise revenues and as new technologies come out we can then implement them. We can put an actual ROI [Return on Investment] to development as well.

Q: How are you profiting from brand extensions offline?

Evans: we’re making money from our own book sales. We have one book of collected short stories out already and are about to publish two more, “The New Nude: a photo book and a book of our Editor in Chief’s collected “Jack’s Nutty” columns.

We also launched a magazine couple of months back. We’ve got a couple of people who sell ads, but it’s very difficult to sell print ads for a magazine launch. Most big advertisers wait for a year before deciding. But we’re starting to get a lot of pretty big nibbles which will probably enhance ad sales for 3rd issue.

Magazine circulation sales worked immediately. We’re almost sold out of the 50,000 run of our first issue and virtually every copy of our second issue (which comes out August one) is presold already. People snapped up virtually every copy. It’s being distributed through Barnes & Noble stores, some Borders, newsstands, etc.

Our Web site has actually been our strongest mechanism to sell subscriptions so far. We’ve sold 3,000 subscriptions with a hard offer [no bill-mes] off our site so far with very little promotion.

Q: What's the best traffic generation method you’ve used to get your whomping traffic without a whomping price tag?

Evans: Nerve’s always been very successful with PR. We’ve been written up by virtually every publication in North America, plus 60 Minutes 2 did a section on us. And it’s all been accomplished by just one in-house PR guy.

We’ve been so successful we’re actually at point where we have to lay off because reporters just get sick of hearing about us. So we’re going through a PR hiatus this Summer, laying low until we push big news in the Fall. With his free time, our PR guy is starting an in-house agency, Nerve PR, to service outside clients! They are all Internet start-ups, such as StudioNext, eBrick and Buyroad.com.

Q: Are you syndicating content and how is that working?

Evans: Yes we are, ScreamingMedia repurposes some of our content. Also Bertlesman in Germany came to Nerve very early on. They take translate the entire site into German and have created a virtually identical site, Nerve.de. They also publish content reprints in Stern, which is the biggest magazine in Germany. We charge them a licensing fee at a fixed rate for this.

The relationship taught us that the Nerve sensibility lends itself well to Europeans. So using translators based in New York, we’ve launched our own versions of Nerve in Portuguese, French and Spanish. 24/7 Europe handles selling all the ads for them.

We have also repurposed some content through College Club, YoungProfessionals.com, and TIonline in Germany. They take old content and in return they give links back
to Nerve.

We’re in the process of searching out new opportunities in that space. It’s very logical to team up to spread our name out, much more effective than pushing the name out ourselves. We’ll probably accelerate these efforts. A lot of people are coming to us, so we can pick and choose who we want to work with.

Q: Is Nerve going wireless?

Evans: Absolutely. We’re already listed on AvantGo you can read Nerve on your Palm. Putting our community boards and personals on wiureless is the next major push. You’ll be able to pick up personals on your WAP. In time we’ll probably partner with someone to get more content out through wireless channels.

Q: What other partners are you looking for?

Evans: We’re looking for partners in the personal space, content sites with similar content to nerve. We’d like to create a network of personals sites. We view most personals sites like Match.com as being bland like McDonalds. Nerve members have certain affinity, a sensibility. Our brand works like a filter, you have a greater chance of meeting someone like you. So we are looking to partner with similar types of personals sites.

Q: What other revenue models are you exploring?

Evans: We’d like to harness all of our visitors and generate substantial revenue.

So now Nerve is getting into ecommerce. We’re really focusing on contextual marketing. If we do a review on book you have the opportunity to buy book. ecommerce works with affinity. We’ll outsource the actual fulfillment and warehousing, etc. as much as possible. There’s a growing field of players who’ll do that for you now. We’d never get into that game ourselves.

We may also franchise space to eretailers on our site using either a lease-type arrangement or a hybrid part revenue share/part lease. For us it’s a low risk proposition.

Q: One last question. How is it that Nerve is going into the black and showing healthy ROI when so many content sites are bleeding money?

Evans: One thing a lot of sites did was just put stuff up and continually grow without having eye towards what their returns were. Nerve’s very healthy because we’re quite fiscally austere. We’ve kept shop relatively small and lean and been very careful where we spent money.

Nerve’s run like a really good business; which is one of the reasons I joined it!
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