Magazine article Editor & Publisher

Internet Access Business Loses Luster for Papers

Magazine article Editor & Publisher

Internet Access Business Loses Luster for Papers

Article excerpt

But marketing value and revenue stream keep InfiNet, and scores of papers, in the ISP game

Newspapers that once viewed the business of providing Internet access as a revenue source to offset the costs of online ventures are finding other pathways toward profitability.

According to an Editor & Publisher Co. survey of online activity at 329 newspapers. 18% of the papers reported revenue from Internet access services. It found 25% of newspaper sites are profitable, local advertising attracts 60% to 70% of revenues, and 26% of revenues come from classified ads.

Is providing Internet access to consumers the best way for newspapers to make money on online? Analysts say classifieds and e-commerce are better revenue sources, but some online managers say being an Internet service provider (ISP) can work in the right market.

Patrick Keane, an analyst for the New York-based Internet research firm Jupiter Communications, says being an ISP has marketing value but offers little else.

"It's a way to get branding," Keane says. "I don't see it as being particularly lucrative."

Newspapers left the ISP business long ago. says Bill Bass, an analyst with Forrester Research Inc. in Cambridge, Mass., because "it never really did much for them. It's a business without any great economics."

Nevertheless, Norfolk, Va.-based InfiNet, formed by Landmark Communications Inc. to help newspapers subsidize Web ventures with revenue from access services, hasn't given up on the idea.

With about 65 newspaper affiliates offering Internet access to about 100,000 subscribers, up 20,000 in 1998, InfiNet still seeks to recruit the rest of the papers operated by its owners -- Knight Ridder and Gannett Co., in addition to Landmark -- says Steve Fuschetti, InfiNet's executive vice president. The company projects 1999 revenues to total $27 million.

His selling point is that newspapers get revenue from Internet access services at no cost other than marketing in the papers.

InfiNet sets up Internet access services in local markets and sells subscriptions under the newspaper's brand name. When users access the Internet, the service defaults to the newspaper's home page, "driving eyeballs to their content," Fuschetti says.

Newspapers share -- Fuschetti wouldn't give the split -- in revenues from access fees that typically run about $20 a month for unlimited access. …

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