Most webzine publishers would love to be able to adopt a business model similar to that given by Mogel for a typical consumer magazine (Mogel, 1988: 173). According to that model, a magazine publisher could expect revenues from four sources:
At present two of these potential revenue sources - subscriptions and newsstand sales - are too intimately linked to the vehicles of commerce available only in the world of print. Neither revenue source transfers very well to the World Wide Web.
Some models from the print world have transferred to the Web, albeit with varying degrees of change. A form of newsstand does exist on the World Wide Web for example, in the guise of services such as Yahoo's well-known and well organized Web site (http://www.yahoo.com). Yahoo and other indexing Web sites serve as places where the casual "newsstand browser" can peruse a list of online publications and, when they select one of the links displayed there, be taken immediately to that webzine's front page.
Obtaining the online equivalent of "rack space" on these indexing sites is possible for webzine publishers, although the explosion of Internet publications means that there is stiff competition for this kind of placement.
Even if such placement is obtained, however, the webzine publisher is no further ahead with his revenue stream, since the Internet does not yet have a digital currency of its own. Subscription sales encounter the same road block: even if Web consumers were willing to pay for a subscription to a publication as ephemeral as a webzine, they have no accepted means of doing so.
Some online publishers are exploring ways around these obstacles, as cited in Stieren's InfoCanada article:
The model for newspapers may well be the [online version of the] San Jose Mercury, which offers a few top daily news summaries and other information for free, but charges $4.95 US a month if you want the comics, the full text of all their news stories, and their Dave Barry archive. If you subscribe to their newspaper already, it's $1 a month (Stieren, 1995).In the same article Stieren notes a strong consumer resistance to commercialization of the Internet, something which does not bode well for would-be webzine publishers hoping for subscription revenue:
There is [...] a tradition of not paying for information over the Internet. This tradition has its roots in the academic community, which respects copyright and patent rights, but expects research results to be freely shared. Original Internet users will remember the Acceptable User Policy of 1989, which stated that the Internet Backbone shall be used only for research or education. According to John Quarterman of Texas Internet Consulting, this policy only ever applied to one backbone network in the Internet, but its memory lingers on (Stieren, 1995)Over time this resistance will erode, as a wider selection of consumers come online. But until this time, and until the Internet can offer consumers a standardized and safe means of exchange, webzine publishers will be forced to build business plans which do not rely on either newsstand sales or subscriptions as potential sources of earnings.
it is vital that payment services evolve along with technology. [A] secure, easy-to-use payment facility for the evolving information superhighway [is] an important step in the evolution of electronic commerce (Netscape, 1994)Experiments with Internet-native forms of cash are underway as one attempt to address this need, but the experiments are still a long from gaining general acceptance. According to an article in InfoCanada Magazine, "until the experiments in Digicash become production (and are adopted by firms and users), the business side of the Web will remain a medium for advertising, sales support and public relations" (Stieren, 1995). (3)
Another attempt to address this need is by using digital encryption to implement secure communications channels on the Internet. This approach would allow a customer to send confidential data (such as a credit card number and expiration date) to another site securely in exchange for either goods or services.
The technology that would permit this is in its infancy: there are still very few readily available and robust means of securely submitting payment over the Internet. Netscape Communications Corporation has been at the forefront in this area with their secure Web server. Yet, despite considerable research, their efforts suffered a serious (if temporary) setback this past summer:
On July 14, 1995, Hal Finney, an American, placed a challenge on the Internet. Using Netscape Navigator[TM] software, Finney recorded a secure session on the Cypherpunks electronic forum. He then asked this group of cryptography enthusiasts to decrypt it.This security breach received much publicity and did little to reassure the first tentative Internet consumers. While the "technologically literate" soon realized that this incident did not negate the underlying technology, other, more anxious consumers were not convinced. It is likely to take some time before the average consumer on the Internet feels sufficiently comfortable with the new milieu to risk any significant sums on commercial transactions over the Internet.Doligez, who works at INRIA on parallel computing (the use of many computers at the same time to work on the same problem), sees cryptography as more of a hobby. However, interested in Finney's challenge Doligez employed a total of 112 computers from INRIA, Ecole Normale Superieure and Ecole Polytechnique for 8 full days to crack the secure session challenge. His program used the brute force method, which consists of trying more than 1000 billion possible keys, and found the key that broke the code on August 15th (INRIA, 1995)
One of the first webzines to include advertisements was HotWired (http://www.hotwired.com/), the online companion to Wired magazine, the very successful print publication. HotWired places graphic ads at the top or bottom of their main pages and uses a form of randomization to automatically vary the ad displayed. In most cases, the ad graphic acts as a link to the advertiser's own home page, where the interested consumer can obtain more information on the advertiser's products or services.
Web sites with ads are still in the minority. The Graphic, Visualization, & Usability Center's (GVU) 3rd WWW User Survey found that
when queried about charging for advertising on their site, the vast majority of Webmasters replied that the question was "Not Applicable" (70.6%) or that they "Don't Allow Ads" (24.0%) for a total of 94.6%. For those that do allow ads, the largest percentage (3.25%) charge under $50 per week. Only 0.36% charge over $510 per week. (GVU survey #3) (Pitkow and Kehoe, 1995)Ads in webzines are still rare because advertisers are not yet convinced that the ads will achieve results. There is the consumer's resistance to overcome as well, and many publishers are taking a cautious approach. The publishers of a webzine named Buzz Online: The Talk of Los Angeles (http://www.buzzmag.com) have placed the decision in the hands of their readers:
Though we would love to keep commerce out of this, the fact is that the people who write, illustrate, design, edit, and upload everything that goes into Buzz Online all have rent to pay, mouths to feed, and bad habits to support. Ergo, Buzz Online must generate revenue. Rather than try to get it by charging you for the privilege of checking us out, we will soon be accepting advertising and charging them (i.e., the advertisers) for the privilege of displaying their wares to you. As many of you have already discovered elsewhere, online advertising - which often takes the form of a link to the advertiser's own Web site - can be pretty entertaining. In any case, if you don't like it, you don't have to click on the advertiser's hyperlink. If you are interested in advertising on the Buzz Online Web site, please e-mail us at webmaster@buzzmag.com - or telephone Mark Smelzer at Buzz magazine (310-473-2721) - and we'll be happy to tell you all about what it entails.Even when the decision to accept advertising has been made, webzine publishers have no industry-standard guidelines on what to charge their advertisers. As noted, GVU's 3rd WWW User Survey found that, of those who chose to respond to the survey, only 0.36% charged advertisers more than $510 per week. At the other extreme are the "hot" sites, where advertisers have shown themselves willing to spend much larger sums to place their ads:
Pathfinder, Time Inc.'s site on the World Wide Web, announced in mid-April [1995] its first advertising deals with AT&T and Saturn, charging $30,000 for a three-month period. [...] HotWired, a pioneer in online sponsorship packages, charges $30,000 for an eight-week program (Manly, 1995)The field is still new and very volatile, so little is known about the effectiveness of advertising in this new medium. Because of the lack of standards, sites charge advertisers what they can get. Turning to traditional models used with other media, Internet publishers are exploring the use of rate cards based on estimated CPM (cost per thousand circulation) values for their publication. Rates vary widely however: "PC World Communications, which publishes PC World and Multimedia World, [charges its advertisers] $12,000 to $15,000 per month - in line with the $40 CPM [it] charges its print advertisers," while an advertising agency working with this medium "has determined that the rate should fall between the CPM for a typical magazine ($35 to $40) and that of television ($16 to $18)" (Manly, 1995).
Internet publishers face another obstacle that their print counterparts do not have to address when soliciting potential advertisers. While magazine publishers base their rates on audited circulation figures (Mogel 1988:48), Internet publishers have no equivalent independently verifiable (and standard) figures to base their own rates on. (4)
What has emerged is the concept of "hits," meaning the number of files accessed by visitors, and some sort of cyber-voodoo [is used] to translate those hits into users. Everyone seems to do it a little differently, [...] Hits are the closest thing to a Nielsen the Web has at the moment, but it can be misleading. [...] It is a figure and measure, but not a precise measure. (Frook and Welz, 1995)As discussed at greater length in Part 2 of this paper, assessing readership for online publications is still far from being an exact science.
A significant number of webzines now on the Internet do have some kind of symbiotic relationship with a print publication (HotWired is paired with Wired; Buzz exists in both online and print form; Vancouver Village (http://www.vanmag.com) is the online presence for both Vancouver Magazine and Western Living.
As a variation of this practice, other webzines are subsidized by retail organizations, with the retailer treating the webzine as a form of promotional material for their products, aimed at the Internet marketplace. Salon (a webzine subtitled "fin de siècle," and located at http://www.salon1999.com) is one such example. Salon describes itself as "an online magazine of books, arts and ideas, sponsored by Borders Books & Music." The sponsorship is subtle, consisting of links from Salon's book and music review pages to Border's Web site, where the reviewed books and music can be ordered. Notwithstanding its subtlety, the sponsorship is still the primary reason for the existence of (and the primary source of funding for) the webzine. Such relationships are essentially advertising in another guise, and they are often accompanied by a corresponding loss of editorial control.
Footnote 4:
As noted earlier, efforts are being made to obtain demographic information about
the WWW marketplace. As an example see
(Pitkow and Kehoe, 1995) (back)