More than a year after announcing plans to roll out a paid financial site, Time Inc. New Media in the next few weeks will pull the plug on Money.com Plus, focusing its premium efforts on sister site Fortune Investor.
The move is one more sign that in the online financial services market, general money management is no longer a sell proposition. Only sites offering unique, branded content and sophisticated investment tools seem able to attract paying subscribers.
"The market changed very quickly," said Brett Zickerman, VP-channel development at Time Inc. New Media, referring to the Money.com Plus launch in September 1997.
The dominant paid financial sites at the time included the Wall Street Journal Interactive Edition, which charged non-print subscribers $49 a year, and
TheStreet.com, which at the time charged $12.95 a month. Money.com Plus was priced at $49.95 a year for non-print subscribers.
Now, the WSJ Interactive Edition charges $59 a year and TheStreet.com charges $99.95 a year or $9.95 a month.
Time will continue to offer its free Money.com site, and try to convert Plus subscribers to Fortune Investor, priced from $9.95 to $34.95 a month depending on the level of service. Money.com Plus subscribers will get discounts on the service.
Fortune Investor is a joint venture of Time Inc. New Media and Telescan, Houston, which develops investment tools. Some of the more sophisticated tools let users search for stocks and funds using more than 300 criteria, track past and present stock performance, and build customized portfolios.
NEVER CHARGED FOR CONTENT
While Plus had signed up in the "tens of thousands" of subscribers, it never charged for content.
"We didn't know what the model was" when the site launched originally, said Mr. Zickerman. "There were nowhere near the [number of] online brokerages that were offering content for free."
Indeed, in the past year dozens of online brokerages have made their debut, from traditional investment firms to online-only businesses, increasingly from software sites and search engines offering investment tools. Most of the popular portals, from Yahoo! to Excite, now offer free stock quotes, portfolio tracking and related financial news.
And Microsoft Corp., which two years ago launched Microsoft Investor, a free investment site, recently began charging for a set of sophistical investment tools on Investor and its free MSN MoneyCentral site.
The high-end services, priced at $9.95 a month or $99 a year, include in-depth company research, historical financial statements and screening tools that help investors select stocks.
For example, with Microsoft's Investment Finder screening tool, investors could see all stocks in the Dow Jones Industrial Average whose current price/earnings ratio is at a discount compared to the industry, said Amanda Young, product manager for MSN MoneyCentral.
About 40,000 subscribers have signed up for the premium services since they launched in October.
"Our goal is to provide great free services," said Ms. Young. However, for the premium services, "We made a significant investment in developing software tools you cannot get somewhere else."
Other investment sites say users are willing to pay only for those services that give them unique content and tools to help them make shrewd financial decisions.
"Given there is so much free content, it's still an enormous battle to convince people you have something different than what's out there for free," said Tom Baker, VP-general manager of the WSJ Interactive Edition, which has signed up more than 250,000 paying subscribers since its launch in April 1996.
"If you have something that's mostly free, no matter how cleverly you've packaged it, it's harder to maintain a charge for it," Mr. Baker added.
He said The Wall Street Journal's online success is based on the strength of its offline brand and value-added services, including online archives, background reports and coverage beyond what's offered in print.
The WSJ Interactive Edition also plans additions to its stock portfolio that will give more in-depth information.
Another successful player in this space is TheStreet.com, which has signed up about 26,000 paying customers since launching in November 1996.
"Many pundits were pooh-poohing the idea we even charge for content since the beginning," said Brendan Amyot, VP-marketing and business development at TheStreet.com, New York.
ADVERTISING STILL BIG SUPPORT
However, like other paid-only sites, TheStreet.com generates more than half of its revenue from advertising, for which it charges an average of $55 per thousand impressions.
The WSJ Interactive Edition charges $65 CPM, Fortune Investor charges roughly $50 CPM and MSN Investor is pursuing sponsorships at various fees.
But while their value proposition is to help investors make sound financial decisions, these sites have yet to turn a profit. When will that happen? Mr. Amyot of TheStreet.com says it could happen in the fourth quarter of '99--just in time for the new millennium.
Copyright December 1998, Crain Communications Inc.