What a great post with great analysis and support. I wish Appellation America had done as good a job studying the market and creating a viable business plan. The concept of an enterprise has to match the needs of a market segment and meet additional requirements to become successful or at least survive. They obviously did a few things very right but had not thought out everything. That is one of the basic reasons given for making a business plan. The whole process of putting it together makes you think out the business thoroughly and solve problems you may not be able to handle once start doing business. That is one area the wine industry and corporate America has been ahead of noble and good groups taking commendable steps. We could learn a lesson.
As quickly as it turned to a subscription model, Appellation America has pulled the plug on it’s operations. There are some significant lessons here. The publishers of this groundbreaking on-line wine site will be announcing this soon.
Not more than a couple weeks into beginning to sell subscriptions to the on-line editorial and information website Appellation America, the owners decided to stop taking subscriptions, dismiss its impressive editorial staff, discontinue the publishing of any new content and let the site sit where it is. There are thoughts of continuing their “Best of Appellation” program but that too is likely to be intermittent if continued at all.
I worked with Appellation America for a few years, particularly early on as they assembled an editorial staff, began publishing significant content, issuing regular reviews of wines from all across America and even setting up an e-commerce capability. I was one of the true believers primarily because the focus of Appellation America, taking a deep dive into chronicling the significance of ALL American wine growing regions, stuck me as a very important endeavor that no other publication was doing in the same dedicated and complete way.
You have to ask yourself, why there is no other wine publication that gives as much editorial space to the wines of Michigan, Virginia, Texas, Nova Scotia and Missouri as they do California and Oregon. Then you have to answer, because these “other regions” produce only a fraction of the wine that comes out of California and they don’t provoke the same level of interest as California, Oregon and Washington wines do. It’s risky for a publishing venture to try to walk outside the lines.
In this respect you have to conclude that the folks behind Appellation America made a critical mistake from the beginning by pursuing the optimistic goal of convincing American wine drinkers and the wine trade that broadening their view of what American wine meant was something all of us ought to happily indulge in.
The other issue here is monetization of on-line content. In this regard everything depends on eyeballs. Without significant readership of an on-line publication you can’t begin to attempt to create a moneymaking business of any significance. That’s the bottom line. While Appellation America succeeded in making outstanding strides in indexing its extensive content with Google and other search engines and while its readership was extensive relative to other on-line wine editorial sites, it simply never secured enough eyeballs to be a significant player in the on-line publishing world. This meant that an advertising model would never have been able to produce the kind of revenue necessary to make it profitable.
Meanwhile, the attempt to produce revenue as a Marketing Agent by directing readers and wine buyers to wineries participating in its e-commerce program also suffered difficulties. The primary problem, in my view, was two fold here. First, working a hybrid model where you are part editorial and part e-commerce is a bit confusing and unfocused. Creating a successful stand alone e-commerce wine site is hard enough and demands a certain dedication to the model. That dedication could never exist as long as time and effort also was placed on the editorial side. It begged the question, what is Appellation America?
Second, the amount of time and money it takes to market an e-commerce site is significant. The money in particular was just never dedicated.
The move to a subscription model that occurred a few weeks ago did seem like a last ditch attempt. I’m not convinced that given time and a significant marketing effort that it couldn’t succeed in attracting impressive numbers of subscribers and with them the ability to pay for a good deal of its operating costs. The owners, however, dedicated neither the time nor the budget necessary to achieving this and appeared to have pulled the plug when it saw subscribers only begin to trickle in at the outset.
Can a subscription model work for on-line wine content.
Yes. But certain conditions need to be met.
1. The content being produced must be viewed has HIGHLY valuable. This means it needs to consist of information largely unavailable elsewhere or it must be produced by a source that is already highly regarded. Jancis Robinson’s “Purple Pages”, eRobertParker and The Wine Spectator on-line are three good examples.
2. The on-line, subscription based publication must find an effective way to market itself to a very targeted audience. The willingness of people to pay for on-line content has been so undermined by the proliferation of free on-line content that in order to find those who will pay it’s necessary to identify the VERY low hanging fruit and target these folks like a laser.
Appellation America, despite producing what I believe was outstanding editorial content from experienced, knowledgeable voices, never rose to the level of “highly regarded” in the eyes of their target audience. Nor did AA attempt to market to this audience.
I think there is something else here that needs to be understood: Where profitable publishing is concerned, there is something to be said for paper.
Like it or not, publications that can be held in one’s hand carry more weight and are granted more credibility in the eyes of consumers of information than publications that are made up of 1’s and 0’s. Although it is far more expensive to deliver information on paper than on-line, the chances of producing a publication that achieves credibility is more likely if it is printed rather than just presented.
My sense is that this principle would be born out in the case of wine blogging. Were the top wine bloggers to come together and start their own collaborative-team blog, it is unlikely it would get nearly as much attention or garner as much credibility than if they were to come together to publish on paper.
The bottom line here is, first, that Appellation America is substantially gone. I’ll look back at this effort to promote all of America’s wines based on terroir and place as a groundbreaking effort that required forward thinking. I’ll look back at it too as one of the finest gatherings of wine writing talent ever assembled under one roof.
But there are other bottom lines. Profitable on-line wine publishing will remain a difficult task for the foreseeable future. And those who embark on such a venture will need to be prepared to play hard and vigorously and directly at folks who have substantial interest in serious wine information. In my mind this calls into question the virtue of attempting to make a living off editorial aimed at new and developing wine drinkers from the important millennial generation—at least not without first segmenting that audience by their level of dedication to wine.