'We've Sold Out the Eyeballs'

'Feed' Founders See Profits In 2000; Business Model Exploits Ad-Friendly Theme Issues

Profit-making was never the goal at Feed (www.feedmag.com). Founded in 1995, the magazine was conceived as a highbrow forum that would combine state-of-the-art Web design with top-quality coverage of the arts, media, technology, and beyond. Cofounder Steven Johnson explains, "Most of our investors got involved because they liked the product and they liked us. They saw us as a force for good on the Web." He adds, "The idea was always to keep it cheap and lean until the content and the market matured."

But overnight, Feed has grown fat, and its founders see themselves in the black in 2000. "Five years is a respectable time line for profitability," says cofounder Stefanie Syman, "and I think we'll hit it. If anything, we're on the fast track."

A few of the elements in the winning equation include: devoted investors, who have kicked in about $300,000 this year and $1 million to date; a staff of about 13 who are young (median age: 27) and modestly paid; cheap digs in a 1950s office building on Lafayette Street; and a sudden surge of paid advertising (1700 percent more this year than in the same period in 1998).

Johnson says some of the original investors were "surprised and happy to find out the magazine might make money," especially given the challenges faced by Salon, the best-known experiment with editorial content on the Web. But Feed's happy prospects are not just an accident."Salon has 60 or 70 people on staff," he says, "and we think the right size for a business is closer to 15 or 20. There's a sweet spot for the Web at around that point. We wonder if, at this size, we have a better shot at something that's sustainable."

Feed's bread and butter: the special issue. By organizing editorial content around a theme, the staff has discovered a business model that allows it to kill several birds with one stone— selling ads, creating promotional opportunities, and attracting new writers.

The current Books issue is sponsored by the New School's Dial Program and the Quality Paperback Bookclub. Thanks to such deals, Feed has sold all its available advertising for July and August. "We've sold out the eyeballs," says Kate Hartnick, vice president of ad sales and business development, meaning they have sold all the readers they can deliver to advertisers. "We get 1.3 million page views per month," she says, "and we can only sell the number of ads that correspond to that." (For aesthetic reasons, Feed has so far limited the number of ads on a page.)

One advantage of the special issue, according to Syman, is that it has "a sense of urgency. It's more of an event." With that in mind, Syman and artist Robert Reynolds are working on what promises to be one of the big events of the fall season: the Art issue. Syman says the "most fun piece" will be a database called "My Favorite Visual Thing," featuring images selected by 100 artists, curators, filmmakers, pop stars, and thinkers. The Art issue will also feature an online exhibit, interviews, and essays by Daniel Pinchbeck and Anthony Haden-Guest. It's scheduled to launch in two parts, on September 13 and 20.

"Our goal is to bring greater art content to our readers, and to bring more art lovers to Feed," says Syman. But the Art issue has also begun to attract advertisers, including Dia Center for the Arts, which will provide space for the launch party. (Dia will use its ads on the site to promote a new CD-ROM, a multimedia project to be released later this fall.) Feed and MSNBC.com are discussing a deal by which the latter will publish content from the next four issues of Feed on its Web site.

Rich fare for the 31-year-old founders, who Syman says were just "slackers" when they started the magazine. And their plate wasn't always so full. Just a year ago, "the question was whether or not this thing was going to work," Johnson says, "and we knew that if it didn't, it would be all our fault." The first step in the turnaround was to hire Hartnick, who conducted an in-depth reader survey and spent three months studying the existing business model before deciding it wouldn't work.

Serendipity hit when Feed editor Austin Bunn (who also writes for the Voice) developed the idea of a special issue on open source software, which went up in March. As soon as Hartnick saw it, she says, "I went in to Steven and said, 'This is fabulous for generating ads. Let's draw up a schedule.' " Then came the Video Games, New Brain, and Books issues. "It was a big change of mode" for the editors, says Hartnick, "and they have embraced it wholeheartedly." Next up: 21st Century Inventions and, inevitably, the Food issue.

Feed's future depends on its ability to increase its core audience, which is affluent, well-educated, hyperliterate, and Net-savvy. Hartnick says, "We want to double or quadruple our page views in 12 months." To that end, they have hired a second business person and are planning an ad campaign. They expect traffic to increase when Feed introduces a new search engine later this fall that will allow users to search its archives by subject. But to turn a profit, they have to keep costs down— while trying to pay more for writers' fees and expenses.

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