Ernst & Young and the Magazine Pubushers of America have recently completed a study of online publishing. They concluded that only 20 percent of the more than 45 publishers who participated in the study are turning a profit. This is so even though more than 90 percent of the electronic publications are extensions of print publications. The two reasons why publishers continue to pursue online publishing despite the lack of profits are the belief that the electronic publications stimulate interest in the printed publications, and that the long-term prospects for online publishing are positive. The expectation is that the $1.5 million in revenue realized from online publications will increase to more than $15 million in the year 2000.
Over 53 percent of the online revenues currently come from advertising, and only five percent from subscription fees. The publishers expect subscription fees to grow significantly, but they also expect to realize revenues from transaction charges or use fees-fees which now account for only one percent of online revenue.
Ernst & Young concluded that growth in electronic publishing will improve when publishers get away from their print roots. Specifically the report recommended: "Online publications' content must be distinctive, uniquely compelling, and fully leverage the media's potential."
Distribution of the report is limited to members of the Magazine Publishers of America.
