Would You Pay To Read Slate?
It took a sex scandal at the White House for media star Michael Kinsley to rue the day he abandoned Washington, D.C., for the other Washington. "Until yesterday I never had a moment of regret or nostalgia," swears Kinsley, editor of Microsoft Corp.'s Slate, a Webzine of politics and culture. The day after the news broke, he longed for the days when he could have held forth from his former perch on CNN's Crossfire, or deployed The New Republic, which he once edited, to fillet the affair for the chattering classes.
As it was, Slate jumped into the fray, with new postings on the Clinton scandal going up every few hours, including a dishy take on the economics of tabloid journalism and a coy dissection of the Commander-in-Chief's rather strict-constructionist definition of sex. Amid the bubbling scandal, Slate's viewership jumped by one-third. "Because we can move faster, we will," says Kinsley.
That's the way he envisioned life as a pioneering Web journalist when he launched Slate in June, 1996, amid a blizzard of attention. Initial reviews criticized Slate for long articles ill suited to an interactive medium. But it has improved, now offering some of the most intelligent and lively commentary on the Web and using multimedia to good advantage--for instance, audio of famous poets reading their work. And it has fans, too. Slate has been averaging more than 150,000 readers a month--only slightly less than mainstream National Geographic's Web site, according to Media Metrix, a Web audience-measuring outfit.
Soon, Slate's appeal will face its toughest test, as it asks readers to pay for what it now offers free. By late February, it will become one of the first news Webzines to charge a subscription fee--probably $19.95 a year to start, according to analysts. Slate flirted with the idea a year ago, only to chicken out because it feared that an embarrassingly small number of people would subscribe to the then poorly reviewed site. Now it's going ahead; the site has grown in popularity, and Microsoft sees this as a chance to test the subscription model on the Web. Slate, after all, is one of the software giant's many laboratories for various Internet businesses. For now, profits aren't required, says Kinsley.
Even with a healthy readership, the move to subscriptions is risky. On the Net, information is expected to be free. Only a handful of Web sites, including the Wall Street Journal, The Economist, and the San Jose Mercury News, charge for access, with varying degrees of success (BUSINESS WEEK will soon join their ranks). That's why observers are watching Slate's gamble closely. "I give them credit for taking a risk and trying to get Net consumers used to paying for content," says Peter Storck, an analyst at Jupiter Communications in New York.
But for Slate, this deal is do or die. "There's no doubt that the day we slam the gate, the traffic will plummet," says Kinsley. He figures readership will pick up again as Slate's reputation and influence continues to grow. But experts say it will be tough to win those readers back. "I call it the Slatanic," says William Bass, an analyst at Forrester Research Inc. Slate is "heading for the subscription iceberg," in his view, as readers will simply browse elsewhere for free political commentary.
Indeed, for all its fanfare, the 30-employee publication generated only about $1 million in advertising last year, according to Jupiter. "We're not close to covering our costs," admits Slate Publisher Rogers Weed. The annual bill for Slate tops $5 million, estimates David Card, analyst with IDC/Link Research in New York. The Web alters the economics of publishing by cutting out paper and mailing costs, "but you still have to pay good writers," says Weed. Kinsley's rationale for moving to subscriptions is just a tad loftier. "If we can prove that a Web publication like this can be self-supporting--and this sounds pompous," says the 46-year-old Kinsley, "then it's a service to democracy."
"NO CHATTER." Slate's challenge now is to create enough buzz to become a must-read in Kinsley's old haunts. So far, though, Slate is marginal. A Lexis/Nexis database search of leading daily newspapers found 190 mentions of Slate over the past six months, compared with 590 for the New Republic. "It's kind of a supplemental, rather than a mandatory thing for me," says Washington Post columnist David S. Broder. "There's no chatter about it," adds a top Senate press aide.
Slate's appeal to advertisers hasn't taken hold, either. It boasts an attractive user profile: Viewers earn a median of $75,000 and spend a healthy average of 22 minutes each time they visit Slate. To draw more interest, Weed lowered rates last year from a pricey $65 per 1,000 impressions to $50. He has tried to attract corporate-image ads, too. So far: nada. Advertisers find it tough to squeeze general, corporate-image ads into the tiny slots that run with general-interest sites like Slate. "It's hard enough to bring tears to people's eyes about your brand in TV ads, but nearly impossible on the Web," says Steven Klein, media director for Kirshenbaum, Bond & Partners, a New York advertising agency.
Despite all the hurdles, Microsoft and Kinsley seem to be in it for the long haul. There's no deadline for Slate to turn a profit. And Kinsley is so comfortable in the Northwest that he has taken up snowshoeing. "It requires no coordination," he quips. (It was rumored last year that Kinsley, perhaps homesick, had taken an apartment in D.C. False, he says.) Besides, if Clinton continues to deliver a steady stream of scandal fodder, Slate might not have to fret much longer about circulation losses.