Though the Internet has transformed the way most publishers do business, many remain cautious about investing in Web sites as a marketing tool, even for their biggest authors. Those who do build sites often use the Net as a billboard ad for the book—posting an electronic version of a book's catalogue page and updating it with a few hot links to reviews, author appearances and the occasional contest. Now, it appears that this reluctant approach has opened the door for entrepreneurs like Web developer Waterfront Media, whose subscription sites based on brand-name self-help books and authors are helping to drive book sales online.
The Web publishing company made a shrewd choice in building www.southbeachdiet.com, which launched one month after Arthur Agatston's bestselling diet book was published by Rodale in May 2003. Since then, says Waterfront CEO and co-founder Ben Wolin, the site has attracted "several hundred thousand subscribers," who each pay $5 a week to participate in on-line chats with Agatston or a nutritionist, connect with a "Beach Buddy" (another subscriber who has similar weight-loss goals), and access meal plans, a shopping list generator and other features. Though www.southbeachdiet.com wasn't among the 25 leading subscription sites in terms of revenue, according to a May 11 report from the Online Publishers Association (on which competitors ediets.com and weightwatchers.com, ranked #6 and #8, respectively), the site's subscription numbers are respectable for a startup.
Like a traditional publisher, Waterfront handles publicity and marketing for its sites. "On average, we purchase half a billion to a billion on-line ad impressions per month from major portals like Yahoo, MSN and AOL. We also market aggressively within search engines like Google and Overture," reported Waterfront executive v-p of business development and co-founder Mike Keriakos.
As a marketing tool for the hardcover edition of The South Beach Diet, the site's benefits have been considerable, according to Amy Rhodes, v-p and publisher for Rodale Trade Books. "The sheer number of media impressions Waterfront provided during the launch phase, throughout the year, and again as we launched The South Beach Diet Cookbook [in April], helped the consumer to see the books everywhere," she said in an e-mail. "We believe that the massive Web presence created by Waterfront continues to drive consumers to purchase the books both online and through retail outlets."
The site's subscribers represent only a fraction of the millions who have purchased The South Beach Diet in hardcover (the book now has close to eight million copies in print). But Rhodes also estimated that more than one-third of the copies sold via Rodale's site were bought by people who clicked through www.southbeachdiet.com. While that kind of traffic may not ease a publisher's relations with booksellers, it does provide an incentive for partnering with Waterfront.
Authors stand to benefit the most, however, since they typically negotiate a separate advance and/or royalties from Waterfront, in addition to their agreement with the publisher, and so receive multiple royalties. (Waterfront is able to determine whether subscribers are being driven to the Web site by its own substantial advertising efforts or through a URL promoted in the book, and it apportions royalties accordingly.)
Riding a "Second Wave"
Subscriber sites may sound like déjà vu to those who remember Slate founding editor Michael Kinsley's attempt to get readers to pay for the online magazine in 1999, and his later capitulation to the "practical and psychological" difficulty of doing it. But Waterfront's sites are part of a so-called "second wave" of subscription Web sites that are finding a new acceptance. The Online Publishers Association recently announced that consumer spending for online content reached close to $1.6 billion in 2003, reflecting an increase of 18.8% over the level in 2002.
Waterfront—which received $4 million in venture capital from primary investors Rho Capital, Time Warner Investments, Village Ventures and Star Ventures in March—currently "publishes" only one new site per quarter. By the end of the second quarter of 2004, it expects its six sites to have a total of 500,000 subscribers.
The company's sites are solidly in the self-help category, except for www.leftbehindprophecy.com, based on the bestselling fundamentalist Christian Left Behind series by Tim LaHaye and Jerry B. Jenkins, published by Tyndale House. In addition to www.southbeachdiet.com, the Brooklyn, N.Y.—based company has also launched www.jeanchatzky.com, featuring the TodayShow financial expert and author of You Don't Have to Be Rich (Portfolio, 2003), and www.myoptimumhealth.com, based on the 1997 Knopf bestseller by alternative medicine expert Andrew Weil. Soon, it will also unveil www.zonediet.com, based on the bestseller by Barry Sears (HarperCollins/Regan Books, 1995).
All of the sites build on established brands, or ones that are clearly going to be widely known, explained Steven Petrow, Waterfront's senior v-p, editorial director. "We live in a brand world, and we understood from the first printing and the marketing that The South Beach Diet was a huge effort for Rodale," he said.
Petrow first heard about the diet book through his longstanding relationship with agent Richard Pine, now a managing director of Inkwell Management, who in turn came to believe in Waterfront's mission. "Publishers and Web site companies have to play ball, but they regard each other with a certain amount of suspicion," said Pine, explaining his role in negotiating the licensing deal, in which Waterfront and Rodale jointly hold electronic rights to Agatston's book. "As an agent, I'm the party to bring together the two publishing units, not as competitors, but as co-marketers and joint publishers."
After expressing satisfaction with the role Rodale has played in the www.southbeachdiet.com partnership, he added, "I am convinced that if there hadn't been a financial interest for them, they wouldn't have worked as aggressively. Whether the book publisher is making anything or not, my goal on behalf of my client is to have the publisher work enthusiastically with the Web site company and not see them as competitive." —With reporting by Charlotte Abbott
