Borders founder hawks old magazines online
Published: 28 Jul 2003 11:47 BST
Magazines are leaving money on the table through unsold archives, and Louis Borders, the man behind bookseller Borders and dot-com flameout Webvan, says he aims to fix that.
Borders' newest venture, KeepMedia, which launches Monday, is an online portal that provides access to archives of 140 magazines for a monthly fee of about $5 (£3.08).
It's also a one-stop entry point for current news, for those people who already hold subscriptions to any one of its publications, which include Business Week, Psychology Today, Forbes and Esquire. Members also can store articles, annotated with their own thoughts, within their online accounts and for access on any Net-enabled device.
"It will be such a relief from searching the Web (for articles) where you get more of a flea market," Borders said.
The venture aims to test a burgeoning market for paid content. Web surfers have long been accustomed to accessing content for free. But since the dot-com demise, online publishers pressed for cash have been trying to reshape their thinking. Slowly, in the last two years, sites such as Salon.com and The New York Times have been charging for access to material previously free. Researchers have identified an increased willingness among consumers to pay for Web content. But the percentage of people digging into their pockets for content is still only at 15 percent of the Net population.
Borders and chief executive Doug Harrington conceived KeepMedia in January 2002. Borders said he was dreaming up new businesses and passed on digital music because of legal concerns. Then he thought of magazine archives as an untapped market for public consumption.
Still, the idea isn't new. Companies such as Brill Media's Contentville have tried and failed at consolidating numerous publications into a digital newsstand. Others such as the NewsStand and Lexis Nexis are operating, but in different niches. Lexis Nexis, for example, is a massive database of business information and archives but is available for thousands of dollars a month. NewsStand, in contrast, consolidates about 50 publications, including The New York Times; and for a fee, people can access an exact digital rendition of one of its papers. However, after two years, the venture is still not profitable, according to NewsStand chief executive Kit Webster.
KeepMedia will host mirror articles of its 140 publications, initially without advertising. Among its publications are those from Hearst, Knight Ridder and Primedia. However, the company has not signed on Conde Nast publications or AOL Time Warner, which earlier this year put its stable of publications behind an online subscription wall.
For the publishers, the service is an easy way to take in new revenue from archives, which largely go unsold. KeepMedia will roughly split subscriber fees with its publication partners. Also, the digital newsstand is a way for magazines to get in front of new readers and potentially sell new print subscriptions. As a case in point, KeepMedia will use a personalisation tool it developed to display links to articles that match an individual's reading habits over time.
"We crafted a plan beneficial to publishers; we share the media pass with them, and it's a new revenue stream for them, making money out of their archives," Borders said. "We think we'll put their subscriptions in front of people who wouldn't otherwise see it and bring them new subscribers."
KeepMedia is Borders' newest venture after the huge washout of online supermarket Webvan. Once worth $1.2bn, Webvan attracted more funding than any e-tailing company other than Amazon.com. It raised $375m in its initial public offering and had such high-profile backers as Benchmark Capital, Softbank and Sequoia Capital. Borders stepped down as chief executive just before the company went public.
Borders said that KeepMedia will heed the lessons of the dot-com bust by growing only once the model has been proven. With 32 employees, KeepMedia is privately funded. Borders would not disclose how much money he himself has invested, but he said the company will court venture capitalists after it's fully operating.
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