If you read this paper a year ago you would have been looking at what online publishers liked to call a 'legacy publication' - one printed on paper. The term summed up what they thought of newsprint: outmoded, outdated and soon to be sent the way of the telegram.
In those good old days, before the dotcom dream collapsed, online publishers could afford to be confident that the nimbleness of the internet would give them an edge over old media. When Slate and Salon were launched five years ago, it was amid claims that 'webzines' would become multimillion-dollar businesses and ruin print publications by stealing their readership and advertising. They were flush with venture capital, internet advertising was increasing, and readership was on the rise.
Even last year, when the important-sounding Powerful Media launched media website Inside.com just as the tech-stock bubble burst, confidence was still on their side. Not only would Inside.com have 30,000 subscribers forking out over $200 for the service within a year, but within three years that number would climb to 100,000 and it would be in profit. But like most businesses with a dotcom suffix, the reality turned grim. In the past year, subscriptions have dried up and advertising has deserted the internet. A dozen web-only publications have folded; others have had to retrench and revise their plans.
'Things look really bleak right now' for online content companies, says an analyst at Jupiter Communications. Many have given up trying to charge subscriptions and are instead building relationships with healthier partners. And with an irony not lost on 'legacy publications', many webzines have turned to what they once scorned - print.
'We realised pretty early on that being an independent, web-only provider was not entirely viable,' says Michael Hirschorn, editor and co-founder of Inside.com, which recently launched a print edition. Salon.com has cut staff and branched out into newsletters. Rival Slate, though somewhat protected by its owner, Microsoft, has also launched an edition that can be downloaded and printed out. They all have one aim: to build readership and hang on long enough for someone to work out how to make money publishing on the internet. That does not look likely to happen soon. Inside.com is understood to be looking for a buyer before it suffers a cash crunch; it is even holding talks with arch-rival Variety.
But analysts say the retrenchment does not signify a retreat from the internet as a means of communication. According to Jupiter Media Matrix, a New York research firm that tracks online readership, the number of people who go online for news and analysis is growing faster than that for any other medium. A similar pattern was observed during the infancies of cable, television and radio. This supports the argument that to judge the internet solely by stock valuation and profit is to miss the point. Slate publisher Scott Moore argues that the audience that matters is not Wall Street analysts and media critics but the readers. After all, Slate on the web attracts 2 million visitors a month.
'From my perspective, a lot of the negative stuff that has been written about internet content is from the perspective of Wall Street,' he told the New York Times . 'If you look at it from a users' perspective, online content is not only alive and well but thriving.' Some webzines, including those that found readers were unwilling to pay subscriptions, such as TheStreet.com, hope to start charging for their stories at some point. Others are likely to increase the space given to advertising. Currently online publishers devote only about 20 per cent of screen space to ads; the proportion for newspapers is 60 per cent.
Web content businesses are not alone in feeling a cold draught. Established print media companies have also cut back staff and investment in their online editions. Last week Pearson slashed $75m from the budget for FT.com. It was a significant move. Pearson poured $294m into its web operation last year, with the aim of making FT.com the world's 'leading global business portal'.
In recent months, companies from CNN to Condé Nast have scaled back their web ambitions, and the retrenchment mirrors a downturn in newspaper business. Last week, two of America's most powerful newspaper companies warned that they had been hit by the economic downturn. Dow Jones, publisher of the Wall Street Journal, said it would earn about a third as much as analysts had expected in the first quarter and would shed staff. The New York Times issued a similar earnings warning, and the San Jose Mercury News, in once-booming Silicon Valley, has also said it will lay off some employees.
Few online content businesses are immune. Last summer, book publishing giant Random House announced the debut of an e-book imprint, AtRandom.com. The company proclaimed that tech-savvy readers could use their computers to download the prose of writers such as Elizabeth Wurtzel, New Yorker staff writer Tad Friend and dotcom chronicler Po Bronson. New titles by these authors would be available only as e-books. But Wurtzel's Radical Sanity was downloaded just 40 times in the first two weeks of release. At $10 each, she has now sold 100 copies. Random House recently reversed its pledge and announced that it would, after all, offer print versions of its e-books.
'Words printed on a page provide a reading experience that is one we're accustomed to, but also, as it turns out, one that is extremely efficient,' says AtRandom.com editorial director Mary Bahr. 'A paperback is not enormously expensive for us to produce, or for the reader to buy.' Her sentiments are similar to those heard across business as the commercial realities of electronic information delivery become clear.
In the absence of revenue, a system launched last month by Amazon allows internet users to give money to their favourite, struggling webzines. The company launched the Amazon Honor System to take advantage of its 30 million credit card database and allow customers to donate. Surfers at participating sites can click on an image and be whisked to Amazon.com, where they can decide how much money to give, with donations beginning at one dollar. Amazon's servers recognise the person as a customer, charge the amount to the customer's card and pass the money to the website, minus 15 cents per donation, no matter what the size, and 15 per cent of the total as commission.
For some, the service has already proved a boon. Journalist Andrew Sullivan, former editor of the New Republic, raised more than $5,000 in the first 10 days his site andrewsullivan.com was hooked up to the system.
But others have yet to reap a windfall. In the first five weeks of operation, Modern Humorist has raised $565.99, SatireWire has pulled in $657 from 153 donors and E [as in Environmental] magazine just $11.
The programme launched with 50 sites, and Alan Kaplan, Amazon's vice-president of payment services, says that 'thousands' have signed on since. Chank Diesel, editor of Chank.com, says about $50 a week is flowing into his company through the honour system. 'We're not getting rich, but we're getting something,' he says. 'I guess you could make a living at it, but it's the honour system. You give people a choice to pay or not pay, and most aren't going to pay.'
