Powerful Mediums

Inside.com has roiled the magazine world with plans to move aggressively into print. The irony hounds are out in full force, suggesting that this decision is somehow an admission of defeat for the Web. To which I say, Wrong!

Here's the deal. Inside.com, which is part of PowerfulMedia, a company in which I have a substantial stake, has created a quick and strong impression in the world of entertainment business. Until PowerfulMedia, this world was covered by Variety and Hollywood Reporter, an interesting and unimpressive duopoly; neither company is known for setting the world on fire.

Inside.com's market is dominated by news and information that was once only considered interesting within the trade, but which is now interesting to everybody. Consider two of the biggest stories out there right now: the TV ratings for Survivor and the fate of Napster. We are ratings-obsessed in this country. We care as much about how many people watched Survivor was as we do about who "survived." This Napster thing, well, that turned out to be some sort of revolution that got missed by the execs in the big offices. Easy to see why. Do you think that Hesh, from The Sopranos, knows anything about the Net? Nah.

But there is a problem with the Inside.coms of the world. First, not everybody uses a computer. Lot of entertainment execs still are uncomfortable or think it is beneath them. You need to reach them in print. Second, the advertisers want to reach those execs. You have to give the advertisers a menu of choices: print, Web or television. (I personally think that a PowerfulMedia Squawk Box is a killer idea.) You can't say, "Sorry P&G (PG:NYSE), we are Web-based, so go take those ad dollars to our competitors." That's just plain stupid. You have to leverage the product in as many venues as possible. You have to amortize the newsroom beyond simple Web-based fare. That's just good business.

The print medium basically forced the online medium into invading their turf by a simple miscalculation that eventually had to come back and bite them in the butt. You simply can't continue to charge a lot for print, as Variety and Hollywood Reporter do, and give the same stuff away on the Web to stifle the competition. (Oh, was there another reason? Please let me know of it.)

Eventually, you were simply inviting the Web people into your turf. And while putting out a magazine is expensive, if you can demonstrate that people will pay for your stuff on the Web, it is very easy to demonstrate to bricks-and-mortar outfits that hooking up with you in print is a very sound and potentially lucrative idea.

Maybe because Amazon.com (AMZN:Nasdaq) never opened up stores, physical stores (although nothing would surprise me from those folks these days -- and I am short Amazon), people ask, "What business does Inside.com have going into print?" Those people think that it can't work because it didn't work for Slate, but that's just silly because Slate is an opinion magazine like Dissent or Washington Monthly or The New Republic, none of which is run to make money. Those publications just try not to lose a lot.

To me, though, it is a natural evolution, a cheap way to introduce a new product instead of doing one of those multimillion-dollar magazine test runs that is nixed when not enough people send back lap-folders. Here on the Web, we can quickly and inexpensively find out what people want instead of the cumbersome way people find out in print. Here we can switch newsrooms to allocate resources to what is being read instead of just saying, "Heck, this is what the people better read," or, "My gut says go with the dog show."

Anybody who has worked in print (as all of the PowerfulMedia folks have) and who has worked on the Web knows that the Web is a great way to get started building a brand name that can then be levered across a whole host of enterprises. Sure, it won't always be easy going. But it sure is easier than trying to come up with a whole new magazine and remaining in the dark about whether it will be read or not a year or two after launch.

Sure, call me conflicted. I have a lot to gain if PowerfulMedia succeeds. But the people who are weighing in on it now in the print world have a lot to lose if it succeeds. Both sides seem equally partisan and self-interested. At least, though, I have the guts to admit it.