SUBSCRIPTION SERVICES FIND ONLINE ENVIRONMENT FRUITFUL: PUBLISHERS TAKE TO WEB-BASED PARTNERS TO HELP SELL CONSUMERS

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E-commerce is the great hope of many businesses, but none pray for its success as fervently as do magazine publishers desperate to sell subscriptions.

While no one in publishing circles disputes the promise of e-commerce, many wonder how long it will take before the Web is the place to sell consumers lots of paper and ink.

"The potential of the Internet is huge, but it's just beginning," said Gene Foca, Time Inc.'s VP of e-commerce marketing. "But it's not yet a source of any size the way direct mail or some of the more traditional sources of subscriptions are."

More than 50% of publishers currently sell via the Web, but only 37% believe interactive subscriptions sales will become a significant source for new customers, according to a recent survey by Capell's Circulation Report.

Despite that less-than-enthusiastic outlook, several companies have positioned themselves to be a major source of online subscriptions.

ADDING ONLINE SERVICES

New Sub Services, a marketer of magazine subscriptions through credit card bills, catalogs and airline frequent-flier programs, is the latest.

New Sub Services woos publishers with promises of an Internet solution through its MagazineOutlet.com, an online newsstand (www.magazineoutlet.com) with over 700 consumer titles.

The e-commerce aspect of its site, in beta test since July, goes live Sept. 15.

Last month, a division of Hearst Corp. announced it would partner with directory publisher Oxbridge Communications to jointly sell subscriptions online through their two Web sites, Mediafinder.com (www.mediafinder.com) and MultiMedia Newsstand (www.mmnews.com).

The combined effort will offer over 600 consumer titles.

New Sub Services won't exclusively sell magazines on MagazineOutlet.com. Part of its strategy includes an affiliate program for Web sites that want to offer similarly themed titles to their users.

For instance, VirtualVineyards.com may want to offer its customers a subscription to Wine Spectator. New Sub Services does all the back-office work to allow VirtualVineyards.com to do that, including updating pricing information, order processing and fulfillment.

MagazineOutlet.com already has affiliation agreements with America Online, Inktomi, CBS Sportsline, Tickets.com, Autoweb, Shopguide.com and Freeshop.com.

'THE TURNKEY FACILITATOR'

"The way our selling approach works is that we let publishers and our Web site affiliates build their own brands. We want to be the turnkey facilitator that lets our partners sell more magazines," said Michael Loeb, chairman of New Sub Services.

Both the new operations will fight for the attention of consumers with publishers' own online efforts and established players such as ENews.com, a 3-year-old pioneer in the online discount subscription business. Enews.com, which started as Electronic Newsstand in 1996, has seen an upsurge in its sales in the last three months-thanks in part to a change in selling tactics that offers consumers free trial issues.

"For the first time, the number of subscriptions we are sending to publishers is becoming relevant," said ENews.com CEO Brian Hecht. "The last three to six months have really put us on the charts with publishers. We think of the Internet as fertile ground for new business, and we want publishers to think of us as a resource to help promote their publications."

Time Inc. is one publisher that won't be supporting any of the new services, however. The publishing giant made a decision two months ago to cancel contracts with all online agents.

"This is very much a new channel of distribution, and it's a bit unique that no one has really conquered it yet," said Time Inc.'s Mr. Foca. "As one of the largest publishers, we have a unique opportunity to not feed this channel of distribution to agents. We are going to explore this on our own first and see if we can build the business."

AN UNUSUAL APPROACH

That's an unusual approach in a business that typically advocates that the way to gain the most new subscribers is keeping an offer in front of as many people as possible at all times.

Ziff-Davis, a publisher specializing in computer and technology magazines, has had great success with online sales. Some of its controlled-circulation titles glean almost 70% of all new subscribers from online sources.

Scott Sutton, Z-D senior circulation manager, believes online sales will continue to grow.

"Enough people have gotten enough orders from online that this will be a source for them in the future," he said. "Any magazine has the potential to have a lot of success; you just have to pick the right partners. Just like direct mail or any other circulation source, you have to be smart about it, do a lot of testing and measure everything you can."

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