30 October 2000

Gasps indicating incredulity and envy in equal measure reverberated around the annual conference of the Magazine Publishers of America in Southampton, Bermuda this weekend.

The cause of what was probably the mightiest intake of breath in world publishing history was the statement by America Online president Robert W Pittman that AOL had ‘sold’ no fewer than half a million – yes, 500,000 – subscriptions to Time Inc magazines since announcement of the two groups’ mooted merger five months ago!

Set against a general magazine marketing background of ailing newsstand sales, a probable increase in periodical postal rates and the collapse of the sweepstakes houses, conference delegates received the news as though it was a one hundred percent tax rebate.

But less impressionable observers are already posing two key questions about the apparent online lifeline. Are web-gained subscriptions as reliable as those obtained via traditional methods? Could there be a hefty refund liability on so-called "evergreen" subscriptions [those renewed automatically by credit card until specifically countermanded by the consumer]?

The same skeptical observers are also chewing over Pittman’s figures. While 500,000 subscriptions sounds mouth-wateringly large, many are not yet paid for. Offered on a free-trial basis, consumers receive several issues of a title with the option of canceling before even a single cent changes hands.

As yet, it is anyone’s guess as to what percentage of free-triallists will pay up, much less renew thereafter. To quote the adage beloved of subscription managers: “easy in, easy out”. Or in wired parlance: “are they "sticky?"

Admits Jeremy Koch, senior vice-president for consumer marketing at Time Inc: "This figure does not necessarily mean 500,000 subscriptions. It means 500,000 gross starts."

News source: New York Times