Slate Goes Free Lloyd P. Trufelman Trylon Communications, Inc. 274 Madison Avenue New York 10016 (212) 725-2295 Concurrent with the appointment of Slate's new publisher, Scott Moore, there are a number of new developments at Slate we'd like you to know about. Excuse the long e-mail, but I thought you'd want all the details. Effective today, Slate is changing its subscription model, making current Web-based content free to all Internet users, while maintaining e-mail, community, archives and other services by subscription only. Going forward, Slate's bottom-line success will be achieved through a combination of advertising and subscriptions. We are changing the mix -- expanding advertising pages, while maintaining a valuable subscription offering for current and future subscribers. MSN continues to learn what is the right combination of revenue for each business and is focused as a division on making these properties successful long-term businesses. Slate's new strategy is intended to benefit everyone. Readers will now have access to all the current content on Slate. Current subscribers will be rewarded as larger circulation enables us to attract ever better editorial content, while they continue to receive the services they value, like "Today's Papers" via e-mail direct delivery. In addition, advertisers will gain better exposure within Slate's expanded circulation on its own and through MSN. As you may know, Slate is the premiere online magazine offering a unique perspective on political and cultural news from influential and respected thinkers. Regular contributors have included seminal thinkers from the worlds of journalism, economics, the arts, politics, government, business and science. The larger circulation that our new business model will deliver will enable us to continue to maintain a high level of editorial excellence and allow us to produce even better content going forward. FYI, below is the text of a letter to Slate subscribers from Scott, introducing himself and outlining some of the changes Slate is making, followed by a copy of Michael Kinsley's weekly "Readme" which will be posted on Slate later today. Please don't hesitate to get in touch with any questions. Lloyd P. Trufelman (212) 725-2295 News from the publisher of Slate! Dear Subscriber, Allow me to introduce myself. My name is Scott Moore and this week I became publisher of Slate, replacing Rogers Weed who has taken a new job as director of marketing for Microsoft Windows CE. I am tremendously excited about joining the magazine. As a Slate subscriber, you obviously like Slate too and I trust you agree with me that it's a great publication. That being the case, I hope you'll appreciate the decision we've made, effective today, to make Slate's Web site free again. At the same time, we will continue to offer our five e-mail services, our weekly print-out edition, The Fray, and The Compost (2 and a half years of Slate's archives) only to subscribers. The rate for these services will continue to be $19.95 per year. In reader surveys we found that subscribers like you like Slate's e-mail services very much. In fact, 83 percent of you receive at least one of these services and 71 percent of you said e- mail was one of the features you like best. Perhaps that's because rather than fill your in-box with a bunch of low-value, self-promoting links, we actually send you our content. Over the next few months we plan to continue adding features and services to your subscription. In the meantime, to reward you for your ongoing participation in Slate's evolution, we will extend your subscription to Slate services by six months for free. To take advantage of this offer the only thing you need do is remain a Slate subscriber through March 18, 1999. At that point, we will credit your subscription with six extra months of Slate at no charge. Of course, if you prefer to cancel your subscription, we will refund the unused portion. Slate has been a subscription-based site for about a year. In that time two key developments caused us to reevaluate our business model. First, the advertising market on the Web has continued to expand at a remarkable pace. It roughly doubled in 1998 to about $1.8 billion, is predicted to grow to about $3 billion in 1999, and should continue a healthy 50 percent to 60 percent annual growth rate for the next several years. Second, paid subscriptions for content (other than smut and investments) simply have not grown as expected. When Slate made the decision to go paid, neither of the two conditions described above were known. Now that they are, it makes sense to change our strategy. The biggest problem with remaining paid was that doing so would restrict our advertising potential. We're confident that by making slate.com free our audience will grow substantially and this will make us more attractive to advertisers. As an early subscriber, you are core to our mission and our business. We hope you'll continue to enjoy your subscription to Slate. If you do, you'll receive an e-mail on March 19 confirming a free six free month extension of Slate subscription services. Sincerely, Scott Moore P.S. In the way that only he can, Michael Kinsley answers some questions about the above announcement in his Readme column that will post later today. You can read it now: it's included below. ----------------------------------------------- MICHAEL KINSLEY Readme February 12, 1999 Slate Goes Free Almost a year ago, Slate began charging a subscription fee for access to most of our contents and services. Effective today, all current editorial content will be free. E- mail deliveries, our weekly print-out edition, "The Fray," and "The Compost" (the Slate archive) will still be available to subscribers only, and we will be adding new subscriber benefits. Current subscribers will get a special offer for continuing under the new arrangement. If you're not satisfied with it, we will happily refund the balance of your subscription. Well, happily is an exaggeration. But we do appreciate the folks who've put their $19.95 on the line, and we don't want anyone to feel cheated or abused by this new subscription policy. Q: "New subscription policy" my Aunt Sally. Who are you trying to kid? You're obviously backing down. A: No, no, you see there's always been a mix of free and paid stuff ... we're just changing the mix. ... OK, OK, sure: We're backing down. Q: Why? A: In a nutshell, it now looks as if it's going to be easier to sell ads but harder to sell subscriptions than we thought a year ago. Ten to 15 people visit our free areas every month for each one paying subscriber. (That's counting a reader just once no matter how often he or she visits.) It's painful to think of turning away so many Slate readers from so much of our content-not to mention the potential readers who don't come in the first place. The spreadsheet wizards figure that ad revenue from the increased traffic will more than compensate for the lost subscriptions. Q: Well, duh! Everybody said you can't charge for content on the Internet. Information wants to be free! Unless it's about sex or stocks. But oh no, you knew better. You'd show the world. You'd charge for news digests, for political analysis, for cultural discussions, for poetry f'r Chrissake. Don't you feel like jerks? A: Not really. OK, maybe a bit. But look: This is terra incognita. We never claimed to have found the one true path. We tried one thing, now we're trying something else, and we'll keep trying until we figure it out. Although we are owned by a rich company, becoming financially self-sustaining remains a crucial goal. And it's not as if anyone else has figured it out either. Let him or her with a Webzine that's breaking even cast the first stone. (And "going to break even next year" doesn't count. Every money-losing magazine in history is going to break even next year.) Q: BUT CLEARLY, AT LEAST IN HINDSIGHT, YOU GOT SOMETHING WRONG. WHAT WAS IT? A: Clearly, yes. It may just have been that we were too early. There is too much free stuff out there, the process of paying and accessing what you paid for is too clumsy and unfamiliar, and so on. Some of this may change. But we also may have missed a couple of more fundamental truths about the Web. One concerns readers and one concerns advertisers. Web readers surf. They go quickly from site to site. If they really like a particular site, they may visit it often, but they are unlikely to devote a continuous half-hour or more to any one site the way you might read a traditional paper magazine in one sitting. This appears to be in the nature of the Web and not something that is likely to change. And it makes paying for access to any particular site a bigger practical and psychological hurdle. Web advertisers, meanwhile, don't seem to place any special value on reaching paying subscribers. That was a bit surprising, since traditional magazine advertisers usually require paying subscribers. Even profitable magazines often spend more money finding and signing up subscribers than those subscribers will ever pay. But if they just gave the magazine away, advertisers would lose interest. Why doesn't this apply on the Web? Probably because Web advertisers pay on the basis of ads served. If you buy an ad in a print magazine with a 500,000 circulation, you have no way of knowing how many of those readers actually saw your ad. But if they paid for the magazine, you at least have some assurance that they picked it up. On the Web, that assurance is unnecessary. If you buy 500,000 ad impressions on Slate, you know that your ad has been put on someone's computer screen 500,000 times. This is a great selling point for Web advertising, but it radically changes the economics of charging for subscriptions. Q: Isn't this change a sign that you're getting desperate, that Microsoft is losing interest, that you're about to fold, that the end is nigh, strange and dreadful diseases are about to ravage the population, the stock market is going to tank, Linda Tripp will get her own TV talk show, and so on? A: For heaven's sake, you made the same sort of dire predictions when we started charging for content a year ago. We have had nothing but support from the company, both in general and for every stage of our ongoing experiment. One benefit of making our current content free is that Slate will be able to participate more fully in the new Microsoft "portal" site, msn.com. Q: Do you promise this is the last big change in Slate that you'll put us through? A: Absolutely not. This is an adventure. Thanks for joining us on it. Q: One final question. What does Bill have to say about this? A: It's true we approached the CEO with some trepidation, and his initial reaction was not encouraging. He turned to his guard dogs and said, "Neukom! Herbold! Kill!" But then he said, "Wait. What will happen to that Emily Yoffe who writes the column about the tabloids?" She'll get many new readers, we explained. "And 'Dear Prudence,' and Edelstein's movie reviews, and all those e-mail back-and-forths?" Ditto, ditto, ditto, we replied. "OK," he said, turning to his canine physiotherapist, "Ballmer, call off the dogs. Give them some print magazine to eat instead. They just love the Economist." P.S. Don't forget that we will still be selling subscriptions-and if you want services like "Today's Papers" by e-mail, you'll need to have one. In fact, if you're not a subscriber, now would be a good time to sign up. Any subscribers who join us before the end of March will be eligible for the special bonus we're offering current subscribers. Click https://www.slate.com/code/reg3/signup.asp for details. SOURCE Trylon Communications, Inc. -0- 02/12/99