WSJ Interactive turns its first profit

By: Joe Nicholson The Wall Street Journal Interactive Edition, the nation's only subscription-based online service at a large newspaper, has turned a monthly profit for the first time, Editor (and) Publisher has learned.
The Web's online newspaper pace car roared out of the red and into the black in September after fueling up with a severalfold boost in marketing efforts, sending out hundreds of thousands of direct- mail subscription solicitations and hundreds of thousands of e-mail subscription solicitations.
Tom Baker, vice president and general manager of the Interactive Journal, said it decided not to report on its own first profitable month because "we didn't want everybody to assume we were into the black permanently."
Still, Baker called the milestone "exciting." While the operation "probably" will take dips back into the red "in the next year or two," he said the online service's long-range future was "absolutely" going to be profitable.
The first moneymaking month was achieved even though short-term profit was "not our primary goal," said Baker, who added that advertising revenue contributed "a little bit more" than subscription revenue.
The massive marketing effort boosted the pace of new subscriptions, which had been coming in at a rate of 400 to 500 a day, to more than 1,000 a day on many of the weekdays since Labor Day, including 11 1,000-plus days between Nov. 2 and Nov. 21.
"With our second-half marketing push, we've doubled the number of new daily orders," said Baker, who declined to disclose the campaign cost.
"Most of the [subscription-marketing] programs we're running are traditional direct response," said Baker, who has been using "a variety of lists, including a lot of print business publication [lists]."
The regular price for an annual online subscription is 59 dollars, with two free weeks added. The direct-mail and e-mail offers are both for various reduced introductory prices, 39 dollars in the case of an offer mailed to E(and)P. The solicitations all offered two weeks free.
The campaign has involved "very little being spent on general awareness advertising where it is very hard to trace the productivity of your spending," said Baker, who added that the strongest response "probably has been [from] the old-fashioned direct mail. ? I continue to be amazed that the old rules of direct marketing still apply in the Internet world in deciding how much it's worth to get and keep a customer."
Executives at the Web operation, which was launched April 26, 1996, said they now have 330,000 subscribers; about a third of them are subscribers to a print edition of The Wall Street Journal, which costs 175 dollars a year, or to Barron's, also published by Dow Jones and Co. Inc., and get the online edition at a reduced annual rate of 29 dollars. The executives plan on passing 400,000 subscriptions next year and expect to reach 500,000 within a couple of years. Without giving a time frame, they eventually expect to match the print edition's 1.8 million subscribers.
In the latest effort to further rev up subscription momentum, the Interactive Journal announced Nov. 30 that subscriptions to its service are being sold in 800 Staples stores nationwide. Earlier, on Nov. 18, the service announced an agreement with Amazon.com to sell gift subscriptions through Dec. 25. Both Staples and Amazon.com are selling annual subscriptions for 49 dollars and include an added free month.
The Interactive Journal's recent moneymaking notwithstanding, there are lots of newspaper and non-newspaper interactive services losing big bucks. Online buzz king TheStreet.com lost 16 million dollars last year and has conceded any profits are still years away.
(Editor & Publisher WebSite:http:www.mediainfo.com) [Caption]
(copyright: Editor & Publisher May 29, 1999) [Caption]