Online news magazine gets the punters to pay

The respected insider news magazine Salon.com has beaten the cynics and started making money through subscriptions to part of its site.

Though widely tipped to fold earlier this year, it has now managed to generate 12,000 subscriptions at prices of $30 per year.

Patrick Hurley, senior vice-president of business operations, told dotJournalism that it was hoping to generate an extra A$1-2 million annually through subscriptions to its 'premium' service, which offers daily news and extra features without any advertising.

But he added that there were no plans to extend subscription charges to the entire site.

Mr Hurley said: "We do not expect that the addition of the subscription program alone will take us to profitability. Rather, it will be the confluence of several elements: advertising sales, sponsorships, Salon Premium subscriptions, Salon Personals (dating) revenue, subscription revenue to our paid online communities, The Well and Table Talk, syndication and licensing revenue.

"Our goal is to convert 1 to 2 per cent of our audience to paying subscribers in year one, which would generate between $1-2 million annually. We have no plans to make the entire site accessible only via subscription. Our current hybrid model allows us to generate both user fees and advertising revenue, much like traditional newspaper and magazine models."

Salon Media Group has seen revenues fall in the past two years, though statements for the first quarter of 2002 show that its net loss was 35 per cent less than same period last year.
Mr Hurley said: "We surveyed a couple of thousand readers randomly using a pop-up survey and about 40 per cent said they would be willing to pay for a subscription. The survey also showed that $75 was the highest people would pay. This helped validate our belief that the concept of a subscription plan was essentially sound.

"Quite honestly, because we were able to retrofit the billing engine from the WELL (one of Salon's two online communities) and use mostly existing content services, we did not incur any variable costs. We would have made money after about the fourth hour the service was live. We could have gone to a dollar and made money. It was a matter of maximising our revenue. We concluded the $30 annual offer, while lower than what some people would pay, would make up the difference in volume."

See www.salon.com

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