Part 3: List rentals, marketing content and future subscribers

And do you see a trend with the big advertising sales rep firms that are de-emphasizing straight newsletter advertising, and going instead for one-time list rental (assuming the subscribers have opted in for such sales messages, of course)?
Oh, great question. Yes, but stand-alone e-mail rentals is not really a good business.

Why not?
Because when people initially subscribed and gave their interest level, they did not anticipate that they were going to get ads over and over again. So it becomes more and more like spam as time goes on. Even though they opted in at one time, they forgot. Literally, the more successful a company is at selling advertising, the more ads a person is going to get. Consequently, what will happen is that person will unsubscribe and so you will begin to get attrition.

And in the soft advertising market, those companies that survive on selling those ads, like yesmail or postmaster direct, start mailing more often. They want to compensate for the attrition and lower response rate and lower revenue. And then they start thinking they will do revenue sharing deals. But in the end, they're victims, because such models are inherently flawed over the long run.

Because they are always trying to keep up or make up instead of having a solid model base?
Yes, exactly. They're victims either way. They're victims of their own success, meaning if they sell a lot of ads the consumer is going to get a lot of ads.

And the consumer doesn't want more ads!
Exactly. Then they're victims of not selling enough ads. That means they step up the number of mailings with revenue sharing deals, and that means the consumer's going to get many more offers to compensate for less ads sold. So, either way, they'll either be a victim of their success or their failure. And that wouldn't be a business model I would like to be involved in.

Why does your business model work so well?
Well, ours is different because people opt-in to get the content. So it's like the difference between an infomercial and placing an ad on a television show like "Friends." You watch "Friends" to look at the content, and within that content are ads. That's our model.

An infomercial on TV is a thirty-minute commercial. There's no content. So can you imagine picking a channel where it's just commercial after commercial after commercial? There are inherent limits to what you can do with that.

Our model is such that people subscribe because they want to get a daily joke, or a recipe, or some bizarre news. Bizarre News has 730,000 subscribers; those people get the newsletter twice a week - and within each issue are ads. Those people will stay subscribed longer because they want the content.

As a further goal, you're aiming to re-market that content?
Correct. You multi-purpose the content. What we're doing is books. In the last two months we've created The Best of Bizarre News and The Best of Clean Laughs. Those are books utilizing that content. We've created a minute-long radio show called The Bizarre News Minute that's being syndicated as we speak to radio stations across the country. And later this month, we're going to be testing a subscription model for "The Best of Bizarre News."

How is that going to work, and why are you moving to a for-fee model?
Well, we're going to have both models; it will be free or, if you want, for US$30.00 a year you will get 26 extra issues. More content, and certain kinds of premiums - you can get a whole raft of added value. We don't know how well it will work though. We don't yet know what percentage of the 700,000 subscribers will opt to pay the US$30.00 a year to get the extra value.

Since you don't know how well it will work, are you concerned it might not work at all?
Yes, and no. It might not work. But we have such a solid base that now is the time to try different things and experiment with what we can do beyond what we have accomplished already. You always have to be willing to venture out and try something new to succeed.

Here's to your success in this latest venture!