Starting in January,
Business Week
magazine will join an exclusive group of editorial sites charging a subscription fee to read its content online, the company announced today.
But over on America Online
(AOL), the magazine will continue to offer its content without an
additional fee to AOL subscribers.
The deal shows that the online service is continuing to forge
exclusive partnerships aimed at drawing users to its service for content they
can't get elsewhere, or content they can't get elsewhere without paying for it.
On Business Week's part, the deal shows that the magazine believes strongly
enough in its product to ask Netizens to do something they have only been
willing to do in a handful of cases: pony up for material on the Web.
While many editorial sites have tried and then abandoned subscription models,
one notable exception is the Wall Street
Journal, which has been able to build a strong paid subscription base.
But many say few sites can make the same kind of move without losing readership--and thus, advertising dollars.
Either way, AOL should come out a winner.
Last month, AOL announced that it will be offering a new Time Warner
magazine exclusively on its service, Teen People.
Ever since last December, when AOL decided to scrap its hourly charges and
offer its service for a $19.95-per-month flat fee, it has been devising
ways to make up for revenue lost through hourly fees. It appears to have
found a very sound strategy: Instead of offering heaps of content, it is
trying to offer content that is either exclusive to the online service or
has an exclusive element (although it still offers nonexclusive content as well).
And it charges many of its partners for placement on the service and access to its 10 million subscribers.
When AOL first started and for several years after, it generally paid
partners for their content. But in the last year, the service--thanks in
large part to Bob Pittman, chief executive of the online service portion of AOL--has been able to turn the equation on its head.
Although not all sites pay AOL, usually there is a marketing component to
the deal, if not a cash one.
In this case, the agreement includes "substantial cross-promotion,
including placement of the AOL keyword for the online area on the front
cover of the North American issue of Business Week," according to a
statement issued today by AOL.
An AOL spokesman declined to disclose other terms of the
partnership and a Business Week representative could not be
reached for comment.