Pathfinder takes risky new road to revenues

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Time Inc. New Media introduced Pathfinder Personal Edition late last week as a customizable product that will become the first component of a forthcoming Pathfinder-branded subscription service on the Web.

But the introduction of a subscription-based model for Pathfinder content is triggering alarm bells throughout the Web community.

"If the majority of the content is free [on the Web], why will others pay for it? We're looking at $5 million in new media revenue this year--and the majority of that will be from advertising," said Paul DeBenedictis, president-new media, Hachette Filipacchi Magazines, which handles a stable of 21 titles on America Online and four separate brands on the Web. "It would appear that they're having problems on the ad revenue side."

Time Inc. has touted a subscription revenue model for some time now. It's questionable whether the company's content will be worth the money.

There are dozens of customized news sources on the Web, many of them free. Other subscription-based offerings, such as ESPNET SportsZone's premium service, serve a high-end niche market, not the mass market Pathfinder currently targets.

One advantage to the customizable screens: ending the task of wading through Pathfinder's overloaded home page to find appropriate information. The site, currently undergoing yet another redesign, is quite unwieldy.

Built through a licensing alliance with technologies from CompuServe, Columbus, Ohio, and Open Market, Cambridge, Mass., Pathfinder Personal Edition will be free to CompuServe, WOW! and SpryNet members and available at an undisclosed fee to others on the Web.

Pathfinder Personal Edition lets users personalize access to Pathfinder. Open Market technology enables Personal Edition users to search for and download Web-based content from Pathfinder and other Web sites at scheduled times. CompuServe technology helps integrate and aggregate the content and provides toll-free access.

Paul Sagan, president and editor of Time Inc. New Media, shunned the notion that Pathfinder wasn't hitting its mark with ad revenues, but declined to provide figures.

"We see the summer as a new starting point for us going forward," he said. "I don't think advertising will be as significant in this medium as it can be in [other media]."

He referred to Pathfinder's business structure as an "evolving model" that would change over the next 18 to 24 months. The future paid service from Pathfinder, he said, would likely carry a monthly fee structure and an annual rate.

Statistics from Webtrack, a New York new-media publishing company, show declining numbers for both total dollar revenues and number of advertisers.

Pathfinder had $279,000 in ad revenue during March, Webtrack reported, down from $329,000 in February and $380,000 in January. The number of advertisers fell as well, from 30 in January to 26 in February to 22 in March.

Observers caution, however, that Webtrack's results are representative of trends, if not actual numbers. Webtrack employees manually scan Web sites looking for ads, meaning an ad could be missed. Ad rate figures are recorded from published rate cards and don't take into account discounting or other special arrangements an advertiser might have struck.

Copyright April 1996 Crain Communications Inc.

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