Newsletters.com Guides Dead-Tree Publishers Online

As the Internet rushes to make the sum of all human knowledge available at the click of a mouse, the dead-tree publishers of highly specialized, often very expensive newsletters have been left at the gate. Until now.

D.C.-area start-up Newsletters.com says it’s ready to give newsletter publishers an e-ride into the future with a turnkey, no-money-down service that does everything from digitizing paper data to posting and managing the account.

The market is a significant one according to Simba Information which estimates the overall U.S. expert information market at about $10 billion and with an increase to $12 billion within the next three years. The materials that Newsletters.com will offer include fee-based newsletters, subscription loose-leaf services, research reports, market studies, special reports, high-priced conference and seminar transcripts, and on-demand single article/issue sales. These products, according to the company, are chiefly for business professionals who “must have” the latest research, commentary, and expert opinion to remain competitive in their respective fields. Prices range from $5 (for a single article) to $25,000 (for a market study).

“Our model is to make the lead story of the month available for free, to give away free 30-day trials to all of our publications, and to bill both up-front and on a monthly basis after 30 days,” says Ari Jacoby who founded the company in 1997 and is now co-chairman and executive vice president of strategy.

Even though there’s no money up front, the service requires the newsletter owner to pay 50 percent of online revenues to Newsletters.com. While that sounds expensive, Jacoby says that it’s a good deal because, according to his figures, newsletter publishers spend 50 percent to publish, fulfill and mail their publications.

As the former founder and former publisher of an expensive trade newsletter (Wine Business Insider) I can say that Jacoby’s percentage is somewhat high by my operating experience but not out of the ballpark. However, the hassle factors make Newsletter.com’s proposition very attractive when one considers that they are not only providing an effortless launch onto the Web, but are providing month-to-month billing (as recurring credit card charges) as well as a pay-for-play option allowing surfers to buy a single article or issue.

While Yahoo! Store, eCongo and a raft of other merchandise-oriented e-commerce enablers have made selling hard-goods online a nearly trivial task, content sales (other than adult material) have been left behind. And while some services such as those offered by Internet Billing Co. allow monthly recurring billing for content, the publishers still must develop and maintain their own sites, hack their way through some obtuse CGI scripts to enable the system and, after all is said and done, pay Ibill 15 percent of gross revenues.

What’s more, the pay-for-play capabilities offered by Newsletters.com are non-trivial in the extreme. My experience creating a pay-for-play and monthly recurring subscription system for Wine Business Insider back in 1995 was one which few newsletter publishers would want, or have the technical expertise, to tackle. However, the Wine Business Insider experience demonstrated that the proper systems and promotional incentives could drive dead-tree subscriptions substantially: in our case, by 40 percent in six months. And that increase came as the subscription growth curve had matured. In addition, savvy use of pay-for-play helped push dead-tree renewal rates over 95 percent and all without cannibalizing dead-tree delivery.

Given this context, the fact that newsletter publishers don’t have to design, build and maintain their own sites, and the reality that any web income at all is better than none, then this i

s a real deal. Real enough for 150 newsletter owners — mostly financial right now, such as the Louis Rukeyser Report — to sign up. Jacoby sees a time when they will have “thousands” of newsletters and reports.

Newsletters.com was launched with about $1 million in angel funding and in late December received an undisclosed investment from eCompanies. In November, the company also hired UUNET and Concentric veteran Jeff Ronaldi as president and CEO.

Newsletter.com’s biggest challenge, in addition to attracting enough publications to achieve critical mass, will be competing with premium content search providers such as Northernlight.com (which claims 5,400 premium sources) and with such established information aggregators as Dialog.com (Nasdaq: IAL). Along the way, Newsletters.com will have to avoid the pothole that sank old text-based newsletter aggregators like the now-defunct NewsNet.

IN A NUTSHELL

Company Name: Newsletters.com
Address: 7100 Baltimore Ave. Suite 403, College Park, Md., 20740
Phone: 301-277-4098
Fax: 301-277-3876
Contact e-mail address: [email protected]
Web address: http://www.newsletters.com
Employees: 14
Total Funding: More than $1 million
Investors: angels, eCompanies

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