Twenty-five-year-old Philip Kaplan, who runs a one-man show out of his Midtown New York apartment, has dug up something people are apparently willing to pay for: the who's who of dot-com failures. The operator of F***edCompany.com said he has signed up 941 subscribers since launching premium services, which cost $25 to $75 a month, about six weeks ago. That could total more than $70,000 in just one month, or a projected $845,000 a year, if the numbers stay stable.
"As far as I know, (my premium service) is doing better than I ever imagined it would do," Kaplan said. "I'm pretty sure it's doing better than anyone."
He may be right. Although it's been weeks or months since some Web sites began charging for premium content, many have not been as successful as Kaplan's service, which gives readers a glimpse into his unedited in-box and searchable access to his archives.
Analysts say that offering highly coveted information could be the key to a successful subscription service.
The site "does have a very strong, loyal cult following," said Betty Cho, Internet analyst at Nielsen/NetRatings. "Companies that are very high in customer loyalty tend to fare better in terms of launching their subscription programs because these are sites that people have come to know, come to trust, come to depend on, and might be willing to pay extra to keep it alive and take advantage of this 'premium' content."
As advertisers turn their backs on the Internet, even the most highly visited sites on the Web are tacking fees onto services in an effort to generate new sources of revenue. Web portal Yahoo, for example, has been experimenting with adding fee-based programs to its services in the face of mounting pressure from Wall Street and investors.
But people have sometimes proven unwilling to pay for services they once flocked to when there were no fees attached. When Yahoo started charging listing fees for its auction service, for example, auction watchers saw the number of listings take a nosedive.
The Web portal declined to discuss financial numbers for other for-pay services, which include Internet phone calls, an info-by-phone service and real-time stock quotes. Yahoo is not alone in staying mum about its success.
"We haven't released (subscription numbers) to anybody, and we don't intend to," said Patrick Hurley, senior vice president of business operations for Salon.com, which has started charging for ad-free content. "Internally we decided that the scrutiny that (the numbers) would probably undergo was unrealistic."
Salon said that in today's market, advertising alone would not push most sites to profitability, creating a need for additional revenue sources. The online magazine began using larger, more intrusive ad units to attract marketers and said a paid service grew out of the desire to offer readers an ad-free option.
But launching a subscription program is not always the best strategy, analysts say.
"It seems a lot of content companies have definitely turned their eye toward subscription models to sort of save the day," Cho said. But "most people are going to feel that they want to get something from their subscription that they're not going to get anywhere else. So it's a question of marketing the content correctly, putting together an appropriate subscription program, and throwing in content that no one else is going to get access to."