Adventures in For-Fee Publishing: NewsRX.com Tries to Profit With Content Online

Last February NewsRX launched a personalized health news-service they hoped consumers would pay a monthly subscription fee for. Recently, we checked in with the Company's Editorial Director Alan Henderson (AH) and President Charles Henderson (CH) to see how things worked out and what other online revenue streams this print newsletter publisher has found.

Q: How did the big test work out? Were people willing to pay for online subscriptions?

CH: We decided not to continue with it. It wasn't generating the types of returns we wanted. However, it's apparent to me that people are fast approaching the time period when they'll buy content online. If you go to the UK, they're convinced you'll never be able to sell an article on the Internet.

But, the only reason free content works is because publishers are trying to generate ad revenues. If that doesn't work and if the content business is important to you, then you'll have to start selling content to make money.

Q: So how are you going to sell content to make money?

AH: We're enormously excited about our new deal with ClickShare. They're a group who saw our BizWire press release for the subscription service and approached us. They'll be selling our articles through their network starting at $1 an article.

Also, a couple of months ago, we came up with the idea of creating a reports series. I've been able to generate 5,000 niche topic reports by taking the past six months of news stories from our 19 weeklies and processing them past 20,000 keywords. The reports have a minimum of three articles in them, some have 300 articles! People can buy them online for $3-$30, depending on how many articles are included. We think a consumer would rather pay $10-$20 and get all the information they need in a report from a reliable, trusted source than spend all day long surfing the Web for information.

When someone comes to our system, they can search by topic, for example Alzheimer's therapy. The results page gives a summary of what's included in each report. Then they can order online and hit print and they've got it!

Our online order form also asks if buyers want to be informed of news updates, so we can email people with offers for new reports later. So far more than half of our buyers have wanted that.

Q: How are you going to drive traffic to your reports store?

AH: We've established partnerships with other Web sites. We're giving them a 35-50% commission on sales in exchange for participating in the program. All they have to do is provide a link to our store.

If I were to have come out with this program a year ago, I would have gotten more doors slammed in my face! People would have said, "Why do I want to send my user to your site?" I used to hear that all the time when we offered a co-branded newsfeed. Sites would have rather paid 25% higher fees to us in order to keep people at their sites. However, things have changed. About 40 sites signed up to be a part of this new partner program on the first day we offered it!

Q: How are your content syndication sales going? You compete head-to-head with Reuters in that arena.

AH: We put a testimonial from OBGYN.com on our booth and marketing materials at the Fall eHealthcare World show. It was an unsolicited quote saying they preferred us over Reuters. Virtually half of the stack of business cards we got from prospects at that show were influenced by that quote!

We know our content is better. We also compete in the areas of cost and flexibility. We organize and maintain our data in an easier fashion for clients. You can subscribe to any niche from us. We also have great customer service.

We also syndicate through iSyndicate and ScreamingMedia. So far Screaming's been by far the best. We started getting revenues pretty much from the beginning from them. We're still trying to figure out how to parse out and use our content with iSyndicate. We foresee money coming from them but so far it hasn't worked out. We signed contracts with both companies in Spring 2000, and got our first royalty check from Screaming in September and the amount's been going up every month.

We also get a lot of excellent leads for direct syndication sales from Screaming. People see us there and say, "Well heck I can probably go to NewsRX and get it directly." It all boils down to how you want to receive your news feed. The Screaming model is excellent for a great number of folks. I also have referred people to Screaming -- I do that at least a couple of times a month when somebody wants something very nichey we can't provide.

Q: What about ad sales? The main NewsRX.com site only seems to have a few button ads.

CH: The ad sales program has been a total failure. The ad sales model is a weak one. We've gotten some ancillary income, but you certainly can't support a site or consider it a significant source of income. It just doesn't work. That's why a lot of sites are folding.

Q: Where is your money coming from now? Can you give us a breakdown of your revenue model?

CH: Our model is very broad. We sell stuff in print, we sell electronic weeklies, we license content, we have the new reports and articles program....

Most of our income is still coming from print, but we're seeing electronic revenues increase pretty rapidly. In fact we're expecting them to equal print revenues within 24 months.

We signed a deal with Factiva in October. We're also the first electronic publisher to be put on EBSCO Online. It's an electronic ordering and delivery service for librarians. That academic marketplace is a tough nut to crack. It's reserved exclusively for journal publishers, so you can't go directly info the library market unless you're associated with an aggregator like EBSCO or Gale Group. We've been doing business with Gale since the 1980s. They're launching a new health and wellness product that we'll be a big part of.

We're trying to hit every conceivable way to sell content or to do something with partnerships with people. I think overall as an industry, health and medical publishing print sales are declining. They have been for the last year industry-wide. So all the print publishers are scrambling to figure out how to make money off electronic.

Everybody's still supported by print sales, but their future's dependent on doing something with electronic.