Two Industries That Dis Paying Customers — What Happens When No One Understands a Business Model

The following article appeared in “Denny Hatch’s Business Common Sense” on July 17. Business Common Sense, http://www.businesscommonsense.com, is an e-newsletter published twice a week by the Target Marketing Group and authored by Hatch, a direct marketing veteran. Hatch’s Business Common Sense focuses on a major story in the news and shows how businesses can take advantage of—or avoid the pitfalls from—the lessons to be learned in terms of marketing, sales, PR and communications. The subject matter of this particular article is likely of interest to many Publishing Executive Inbox readers. Visit http://www.businesscommonsense.com for more from Hatch.

A couple of weeks ago, I read that the final article by David Halberstam, who was killed in an automobile crash outside San Francisco on April 23, was available on the Vanity Fair Web site. As a long-time customer and admirer of Halberstam’s work, I wanted to read it.

I found “The History Boys” and downloaded it for free.

It was scheduled to appear in the August 2007 Vanity Fair and I—a nonsubscriber to the magazine—was able to access it long before it arrived on newsstands or in the mailboxes of paying subscribers.

That meant I—a Web junkie—could discuss it at a dinner party while Vanity Fair’s paid subscribers sat there with egg on their faces, feeling ripped-off by Vanity Fair.

When my wife, Peggy, and I ran the newsletter WHO’S MAILING WHAT!, our paid subscribers were our livelihood and our extended family. We knew them by name. I spoke at their conferences, greeted them at conventions and answered any and all questions. In return, they paid for our mortgage, our dinners out and our trips to Europe.

The idea of screwing our paid subscribers in favor of a bunch of strangers was unthinkable.

Yet this is the current business model of the magazine and newspaper industries.