Users will pay to play

In spite of the pervasive notion that Net surfers will never pay for information on the Web, some sites are gradually building dedicated audiences willing to part with dollars for online content.

Several big names have decided to go against the traditional free-for-all model of Web content, including the San Jose Mercury News and ESPNet SportsZone, both of which have signed up thousands of paying customers for their Web sites. Today, the Wall Street Journal Interactive Edition announced that it has pulled in 30,000 paying subscribers since it began charging less than three weeks ago.

At least 100,000 additional subscribers are currently taking advantage of a promotional offer that provides free Journal access to Internet Explorer users, but this promotion will end at the end of the year; those users will either have to subscribe or to give up online Journal stories.

While the Wall Street Journal charges users for access to all of its content, some Web publishers, such as ESPNet, are experimenting with a combination of free and premium, for-pay information services on their Web sites. In either case, the decision to charge users is a return to a more traditional business model, where publishers rely on both subscription and advertising revenues to stay profitable.

According to Neil Budde, editor of the WSJ Interactive Edition, his company's business model has evolved very rapidly to the dual revenue streams of advertising and subscriptions.

"When we first started, our assumption was that everything would be subscription-based and that advertisements would play a very small role," Budde said. "Now, we see advertising and subscriptions playing a significant role. Like in magazines, there's a balance between advertising and subscriptions."

The edition's online subscription list of 30,000 readers still has a long way to go, of course, before matching the print edition's circulation of 1.8 million. But other Web sites are also steadily building a base of paying customers. The San Jose Mercury News has roughly 12,000 paying readers, while Sportsline USA has about 30,000, according to sources.

Some analysts think that subscriptions are on the verge of becoming a reliable revenue stream for Web sites, at least those with established brand recognition.

"The concept of paying for content in the world is well-established," said Adam Schoenfeld, vice president of Jupiter Communications. "There's always some kind of free option available, but the best content requires some payment and content from the Journal certainly can command a price."

By the year 2000, Jupiter projects there will be 56 million paid Web content subscriptions. But there have been plenty of failures as well in the effort to get online readers to pony up.

Last May, a popular Web magazine site, Web Review, closed after ad revenue failed to keep the site afloat. Web Review offered readers the chance to resuscitate the Webzine by paying a subscription fee: $19.95 for six months, but not enough were willing to pay. The site has recently come back online through a partnership with trade publisher Miller Freeman.