Slate goes from fee to free

The publishers of Microsoft's Slate Magazine have U-turned on an aggressive plan to charge readers for online content.
Written by Matthew Broersma, Contributor

The move signals a shift in the way publishers view the money-making potential of news and information on the Web, observers say.

Editor-in-Chief Michael Kinsley characterised the move in a positive light, saying he wanted the magazine to take advantage of unexpectedly strong advertising possibilities. "As a business, [Slate has] been roughly in line with my expectations," Kinsley told ZDNN on Friday. "These things take years, and we're making progress at about the pace I was hoping, neither faster nor slower.

Almost a year ago, Slate closed off the bulk of its editorial content to the general public, hoping to encourage users to buy a $19.95 (£12.16)-per-year subscription. But in his "Readme" column Friday, Kinsley admitted that decision was probably ahead of its time. "It may just have been that we were too early," he wrote.

However Slate, which was launched in 1996, will continue to require subscriptions for some premium content, including e-mail notification service, a weekly print-out edition, the section The Fray and the Slate archives.

Rates will remain the same, but Slate is offering to add six months to the subscriptions of existing customers. Slate publisher Scott Moore, who took over from Rogers Weed Monday, said the decision simply makes more sense from a business point of view. Last week, Weed left the magazine to become head of marketing for Microsoft's Windows CE division.

"As a subscription publication, you're limiting the reach you can get, which has a negative effect on advertising potential," he said. "Unless you think you can add subscription revenues fast enough, it's better to have a more blended model. But we're not walking away from subscribers, and will continue to add value to the subscription part of the magazine." He added that Slate's revenue is split evenly between advertising and subscriptions.

Companies that publish news and information on the Web have struggled from the beginning to find a sustainable business model, and subscriptions have been an attractive option because they promise a regular income base. But so far, most sites have been unable to convince a significant number of users to pay -- partly because there's so much other information available for free.

"I like to say this is the golden age of the Web, not because everything's so good, but because everything's so free," said Michael Rogers, editor of Newsweek Interactive, which has no subscription offering. Rogers said he still believes subscriptions will eventually be crucial to online content businesses. "But they're going to have to get rid of a lot of the free stuff first," he said. "But in the short- to mid-term, unless it's mission-critical content -- which means it's tax-deductible, or you can charge it to your boss -- then subscriptions aren't immediately going to work." He said he was not surprised by Slate's decision.

Salon Magazine is often grouped with Slate as one of the highest-profile Webzines, but the site has made it clear from the beginning that it would rely mainly on ads for its revenue. Salon Senior Editor Scott Rosenberg said it's a mistake to view Slate's decision as an indicator of which way the winds are blowing

"Every Web site is a unique product," he said. "It's clear now that the paid model didn't make sense for the type of publication that Slate is. Here at Salon we made that decision ourselves, and we chose from the beginning to say that's not our model. We believe we can be a success based on an advertising revenue source."

The Wall Street Journal Interactive Edition has been one of those few sites people have shown a willingness to pay for, and the site has said it will be profitable this year. But its editors admit much of the site's success is a result of the pre-existing reputation of its parent print edition. "It's a very significant factor," said Neil Budde, vice president and editor of the interactive edition. "People know that the kinds of things they've come to expect from the Wall Street Journal on a daily basis, they can get throughout the day on the site. That's significant credibility."

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