To: DRGardner@aol.com
Cc: meyer@newslink.org, craschke@du.edu, online-news@marketplace.com
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One of the problems with applying "economic theory" to what we're trying
to build is that the reality of the marketplace often gets in the way.

It's true that the marginal cost of reproducing "one unit of information"
is next to nil.  E.g., when I worked for a consumer group that published a
newsletter, we knew that the marginal cost of a subscription was $2.50 for
ten issues, and the bulk of that cost was postage (more now, given
increases).  That's not negligible, but strict digital reproduction is
much less.  It meant for our printed product that we could offer an
introductory rate of $10, knowing that we only needed to invest $1
million/year in losses from trying to get new subscribers (oops, I mean
members).

In some ways though, that's not the point.  Yes, Liebling was right, the
power of the press belongs to the one that owns the press.  And yes,
microcomputing technology allows many people to _produce_ publications for
low cost.  And yes, electronic distribution allows many people to
_distribute_ digital nonpaper publications for low cost.  (Note: I haven't
said anything about producing quality editorial.)

But.

To use economic terms, the Internet encourages the disaggregation of the
current market.  (I know I repeat/write about this every so often.) If you
can't "advertise" or "market" directly via the current Internet, how do
you expect people to come to you in the same numbers that they do now to a
print product? 

I know that it's not completely comparable, because the size of the
Internet-capable market is always going to be smaller than that of the
market able to read, with or without purchasing, a magazine or newspaper.

At the same consumer group, I was responsbile for non-newsletter
publishing (books, etc.).  Imagine my chagrin when I finally had to admit
to myself that producing a quality product was only as important as
figuring out how to market and distribute it (before production BTW). 
After all, if no one reads, uses, watches, etc. the product produced, it
doesn't matter how great it is.

In short, today's leading print products have great franchises.  It will be
interesting to see how they migrate into the digital frontier.  

Yes, I think that new publications will be developed that aren't part of
the traditional print culture-industry of today.  But, I think that
many people underappreciate the significant "barrier to entry" created by
the fact that on the Internet now, people come to you, rather than you
going to them.  Would HotWired or Time or the SJMN get near as many hits
if they had no connection to a print product?  (Playboy or Penthouse,
admittedly, might be exceptions, even if they didn't have a print product,
but I imagine that they still do better because of their existing
franchise, than say alt.sex.????)

The SJMN and the Wasington Post, etc., have a big advantage, compared say, to
the Virtual Street Journal.

Unless, the VSJ gives you your account for free, and when you logon, you
come right into the VSJ homepage/newspaper/display advertising/classified
sections.

But, just like AOL, they'll have to send out a lot of disks, and spend a
lot of money, to do it.  Now, if Bill Gates would just let people use the
Microsoft Network for free, bundle it into Windows, and include the
Virtual Street Journal....

Richard Layman, Mgr., Business Development, and Research Producer
Computer Television Network, 825 6th St. NE, Washington, DC 20002
(202)544-5722 - (202)543-6730 (fax) - rlayman@capaccess.org
http://www.phoenix.net/~ctn  (... I know, it needs work)



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Reply-To: rosalind@harrison.win.net (Rosalind Resnick)
To: online-news@marketplace.com
Subject: NEWS RELEASE: TeleGrafix, Cykic Announce RIPscrip Internet Technology (fwd) From: Richard Layman  Date: Thu, 27 Apr 1995 09:39:48
How the Web Was Won
Subject: NEWS RELEASE: TeleGrafix, Cykic Announce RIPscrip Internet Technology (fwd)
From: Richard Layman 
Date: Thu, 27 Apr 1995 09:39:48