Q&A
With Jonathan Bulkeley An Internet “veteran” discusses the role of content in the new media
Given a choice, most magazine editors would spend their whole day working on their online newsletters. The only reason they don’t is that publishers have not yet found a way to make money out of this activity.
Jonathan Bulkeley has some advice for them: Stop thinking of new media in terms of the old, and start delivering content that people will pay to receive.
Bulkeley should know. He worked at America Online, was CEO of BarnesandNoble.com, and now serves on the boards of nine companies, most involved in new media. He is chairman of two. “It isn’t true that people aren’t paying for subscriptions,” he says. “The reality is that people will pay for information that is valuable to them.”
1to1 interviewed Bulkeley – who majored in African studies at Yale – in December 2000 in New York. In addition to discussing content, he also gave his thoughts on online transactions and technology.
Schultz: You’ve been quoted as saying that content is the most important online element. True?
Bulkeley: The definition of content is changing dramatically. For instance, I’m on the board of a company called InstantDX that provides doctors with lab test results and prescription information over their cell phones. Is that content? From a traditional media standpoint, we probably wouldn’t consider it content – we wouldn’t say that somebody could have made a magazine or a newsletter out of that.
My definition of content is much broader than most people’s definition – what you put on a Web site to draw eyeballs to generate advertising revenue. I define content as ones and zeroes, bits and bytes – delivery of the right information to the right person at the right time.
Schultz: How are they going to make their money?
Bulkeley: Their model is exactly the same as the media model: subscription revenue and advertising. And they have other revenue opportunities. These guys are paid for prescriptions filled from the pharmacy – they get a cut of that transaction.
Schultz: What’s in it for the doctors?
Bulkeley: Every doctor knows how to use a cell phone. The beauty is that it’s totally customized. For example, a doctor sends out results to the lab, and they are ranked by urgency, severity, etc., so you can get those prioritized. It’s also customized on the prescription side. Most doctors order 12 drugs all the time, so you can program those 12 drugs, and the nearest drugstores that carry them.
Schultz: This information wouldn’t fit into traditional media formats.
Bulkeley: That’s right. I was doing IPO research on IPO.com, which aggregates all the data around IPOs, secondaries, different stock exchanges and sectors. Now I don’t think anybody’s ever going to do a TV show about that. A newsletter? Maybe. That’s why I’m excited – because I think the ones and zeroes delivery has been very inefficient. It’s just getting more efficient now.
Schultz: How do you translate this to the consumer arena?
Bulkeley: I’m on the board of another company called LifeMinders. It started out with a very clear premise: personalization and electronic delivery of custom content. You give them your e-mail address and tell them your interests, and they send you e-mails with customized advertising – just for you. They have 19 million members.
Schultz: But these are new businesses. How does a more traditional media company tap into this phenomenon?
Bulkeley: The answer is not necessarily to start new businesses, but to really integrate the technology into how they do business now. Last year, I was on a panel at the Magazine Publishers Association meeting and there were a couple of hundred people in the room. I said: “Please stand up if you’re capturing e-mail addresses on your blow-in subscription cards.” Three people stood up.
Schultz: But is it worth it for a media company to put all that energy into Web sites and online newsletters when the print magazine is still making most of the money?
Bulkeley: Many media companies ask: “How do we take what we do now and translate it to this new medium?” which is the wrong way to look at it. It should be: “What does this new medium offer us? How do you use all the things we’ve learned about direct marketing and delivery of content?”
Schultz: What about your old employer, America Online, which seems to be loaded with content?
Bulkeley: In the early ’90s, we got lots of content partners to come online at AOL. It’s the reason we thought people should be online: “I can get an encyclopedia. I can get access to Time magazine.” They understood that was a brand they knew, and they thought: “Yeah, I’ll read online.” But that’s not what people did. They communicated – through e-mail, chat rooms and instant messages. The medium’s about communication, first and foremost, although in the early stages, software downloading was big. The content hasn’t changed a lot on AOL. What do I use AOL for? Instant messages, e-mail, chat.
Schultz: It seems strange that with all the time I spend on AOL, I never get customized e-mail.
Bulkeley: They’ve been very wary about doing it because of the privacy issue. There’s so much data about individual users that they could capture, but it would take incredible computing power to process that and modify the experience based on that. I think eventually we’ll get to that, but it’s a slippery slope.
Schultz: But there are transaction sites making effective use of customization – for example, Lands’ End, which lets you create your own personalized model. How do you feel about this?
Bulkeley: The real benefit of the new technology is that nothing should ever be out of stock. You know what’s in the warehouse, and can display only the sizes and forms that are available, so that the consumer isn’t told: “Oops! We’re out of that.” And it allows personalization of what you view, and it should be able to show you what you’re more likely to buy, given your demographic profile or past buying experience. The technology isn’t really there yet, but 10 years from now, it will be commonplace.
Schultz: Traditional DMers do seem to have one advantage over startups: fulfillment systems.
Bulkeley: The key is this: 20 years ago all the stores were saying: “Gee, should we be a direct marketer, too?” The good marketers are the ones that enable the customer to shop through any channel they want. They say: “We want you to shop with us. Wherever you are, we’ll customize that experience. We’re going to know exactly who you are. We’re going to reward you for shopping with us and not going to a competitor.”
Schultz: But how do you explain Barnes & Noble’s multichannel strategy? Unless I can’t find it anywhere else, why should I go online and order a book when I can go into a Barnes & Noble store, have a cappuccino and read the book for free?
Bulkeley: You just stated the reason – if you can’t find it. There are only 60,000 books in a big Barnes & Noble store, but there are 101.6 million books in print, and millions of out-of-print books. So distribution of books is highly inefficient – it has actually retarded the book market growth.
