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American Banker Online eyes profits with pay model

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American Banker Online is hoping new layers of Web-only services will push it into the black by the end of this year.

The 18-month-old site, the Internet-based sister of American Banker, a 160-year-old, 20,000-circulation daily banking bible published by Thomson Financial Network, was a pioneer in online publishing ventures, tapping the paid circulation model long before many others. In fact, the vast majority of its revenue comes from subscriptions, with the rest generated by ad sales.

Extra features

Because its model is based on attracting existing print subscribers as well as new readers, the site offers its readers a lot more than the paper version.

One of those Web-only features, a premium searchable archive, goes live this month. The powerful function will allow searches by topic, section, region and various groupings of keywords.

Greg Barrett, American Banker general manager of new media, says he hopes this new feature attracts new readers and gives the 5,000-subscriber site a final push toward profitability, which Mr. Barrett says he hopes to reach by the end of the year.

So far, American Banker has spent about $1.5 million on the site in the 18 months since it launched. It had gross revenue "in the high six figures" during 1997, Mr. Barrett says.

Search feature

Beginning March 9, site subscribers will be able to search the preceding six weeks of issues for free. There will be an additional charge of $245 a year for access to the full electronic database, which goes back 18 months. Pay-as-you-go users will pay $2.95 for each retrieved article.

American Banker will use the archive feature as a key point to sell site licenses to large-bank users who might wish to make the product available on their company intranets.

Besides search capabilities, additional site content is in the works. A periodic series of forums, featuring banking industry experts, is in the pipeline for later this spring.

"When it comes to news about banking and financial services, we want to try and create a cohesive site where you'll turn to to find everything you need to know," says Mr. Barrett, who joined American Banker four years ago after selling SEC Online, a venture he and three partners founded.

The original American Banker site debuted September 1996 and converted to a paid model February 1997, a move that was planned from the beginning.

"In 1996, a lot of people in our customer base were never on the Web before," Mr. Barrett says. "We wanted to educate them that this was a viable medium from which to get information, but we needed to provide it for free to generate real interest in the medium itself."

The site has four pricing plans, each of which kick in after a two-week free trial. The options include:

  • Unlimited site access for print edition subscribers at a flat $110 per year. The print subscription rate is $795 a year, but subscribers pay an average of $675 a year, given bulk subscription discounts and other promotions.

  • Unlimited site access at $595 a year for users who don't subscribe to the print edition.

  • Site subscriptions charged by access to vertical market sections on the site. After a base fee of $350 per year, access to each section costs an additional $50. Thus, a non-print subscriber choosing two sections from this menu would pay $450 a year.

  • A pay-as-you-go $1.95 per minute access rate.

    There aren't many examples of profitable subscription-based publication sites. For guidance, American Banker Online examined another site still striving for profitabil-ityññThe Wall Street Journal. The Journal's $49.95 annual ($29.95 to print subscribers) plan was a role model of sorts for Mr. Barrett.

    "From studying their site, we gleaned that you need to structure your site in a manner that the value-added components are available and accessible to the end user," he says.

    Cannibalization fears

    American Banker executives were initially concerned they'd cannibalize their print product with the lower-priced Web version, but those fears quickly subsided, Mr. Barrett says.

    "We found the good news was, if we could provide value-added components on the Web that might not be possible in print, there would be a real incentive for subscribers to keep both," says Mr. Barrett.

    As examples, bank stock prices are updated on the site three times a day and a fully searchable employment database is being relaunched by the end of this month. Subscribers will also have the ability to post their resumes.

    As opposed to the majority of print product Web-based brand extensions, most of American Banker Online's revenue comes from subscriptions rather than advertising.

    Most of the 15 or so advertisers under contract are from technology vendors that sell to banks, such as Sybase and Bay Networks.

    Mr. Barrett admits his frustration over this state of affairs.

    "We aren't an open-ended site that can attract a huge amount of activity," he says. "We have about 200,000 page impressions a month from a qualified audience of decisionmakers, but the vast majority of agencies try to compare us with sites that have millions of monthly page impressions. We can't compete with Yahoo! and Excite from a volume-of-activity standpoint.

    "We have to educate our marketplace that there is a sufficient enough base of people to deliver their message," he adds.

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