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To: H James Morris who wrote (41347)	2/20/1999 1:51:00 AM
From: Bill Harmond	Read Replies (1) \| Respond to of 164684

I don't understand.

To: H James Morris who wrote (41347)	2/20/1999 3:08:00 PM
From: Glenn D. Rudolph	Respond to of 164684

8 it. This type of balance is not impossible to achieve, but it will be an ongoing struggle for all content providers as they weave their way through 1999.” News last week that Slate, the online magazine owned by Microsoft and edited by Michael Kinsley, was (once again) changing its subscription policy and reverting to a mostly free service (rather than the $19.95 per month I was gladly paying for such an entertaining and informative journal) struck us as the latest foray in this winding debate. Interestingly, Kinsley's comments about the how's and why's of the policy change shed some light on how they came to the decision and what observations they made along the way, suggesting some object lessons (and potentially some new ways to think about the Web as a publishing medium). The more salient excerpts we re-print below: Q: But clearly, at least in hindsight, you got something wrong. What was it? 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. Company Watch Amazon.com (AMZN) The Web's Higher Standards Last week marked another watershed event in online retailing and again pointed out the diferences between the online and off-line world. On Monday, February 8 th , The New York Times ran a story on its front page highlighting (we think with a little too much glee) that Amazon was selling book feature placements on its site. Now, while this seemed to come as news to many, it is of course standard retailing practice. In the off-line world, marketers are constantly shelling out hefty payments to retailers for key shelf space and product positioning. However, the high (and ever growing) expectations that consumers have toward their favorite Web brands, trumped logic and reason in this instance and Amazon knew it. Rather than cry foul, the company, with its consumer-centric focus, responded to the article and customer backlash by implementing a new policy (as of 3/1) that will tell customers