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Consumer Reports an online win

While Net publications struggle to grow their subscriber bases, the consumer magazine is building one of the largest subscription-based services on the Web.

    While online publications struggle to grow their subscriber bases in a medium defined by free content, one site has been quietly building one of the Net's largest subscription-based services.

    Consumer Reports, the popular print magazine, today announced that its online edition has more than 180,000 paid subscribers.

    By comparison, the Wall Street Journal, considered to be one of the most successful subscription services on the Internet, has 250,000 members. But the Journal, which produces daily content, has been charging for subscriptions for two years.

    Subscriber bases of other sites, such as Microsoft's online opinion journal Slate, pale by comparison, with members counted in the five, rather than six figures.

    Web users have shown time and again that they are reluctant to part with money for subscriptions when they can access so much online content--including many newspapers and magazines--for free. But they also have shown that they are willing to pay for well-established brands--if the information being offered is valuable.

    Consumer Reports, which has been online in various forms for nearly two decades, launched its Web site last November 17 after deciding it would reach more people as an independent site rather than by relying on a host service such as America Online, on whose portal it last resided.

    Michelle Rutowski, marketing manager for the nonprofit, non-commercial company, attributed the relative--albeit almost quiet--success of Consumer Reports online to several factors, including the publication's well-known brand name and the fact that people who tend to log on to the Net also tend to fit into the magazine's demographic profile--relatively affluent and well-educated.

    "I think people understand our model, which is no ads," Rutowski said. "People understand that information is not free."

    They understand also, she said, that in order to make the publication free, Consumer Reports would have to accept advertisements, something that would be antithetical to its mission.

    "Our franchise is really our untainted, uncommercialized reputation," she said. "People understand that's our value. And they're willing to pay for that."

    Rutowski noted that Consumer Reports readers are especially willing to spend $24 annually or $2.95 monthly to get the magazine on the Web if they are about to purchase a big-ticket item, such as a car or home appliance.

    The success of the online venture underscores what analysts have been saying all along--that people will buy trusted name brands online, if they are offered value that is not duplicated elsewhere for free.