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Zipping Along the Web: For Guidebook Publishers, www is the Current Address of Choice
James A. Martin -- 10/27/97
Question: Why would a travel guidebook publisher make the entire contents of a book easily accessible to millions of people for free?
Answer: To sell more books.
The CD-ROM Shakeout
by James A. Martin

Whatever happened to the travel CD-ROM?

For a time, it appeared that digital travel guides had found a home on the compact-disc, read-only memory format. A CD-ROM's large storage capacity and inexpensive manufacturing costs lured many companies into developing interactive, multimedia software designed to whisk viewers away on virtual tours, help them plan their next vacations, and develop an understanding of a foreign culture.

Then came the explosion of the World Wide Web in 1994-95. On the Web, a travel site can be constantly updated, yet still offer some interactivity and multimedia (albeit on a lesser scale than a CD-ROM). Even better, to the user, there's no fee to visit most Web sites, while the average CD-ROM costs $40 or $50. It d sn't take a degree from MIT to figure out why the CD-ROM was doomed.

Case in point: In early 1996, Macmillan Digital Reference released four Frommer's Interactive Travel Guides (for Boston, New Orleans, San Francisco and New York). Each CD was packaged with its paperback guidebook counterpart and sold for about $30. The software earned rave reviews-PC World magazine, for example, listed the four discs among its top CD-ROMs of the year. Despite their quality, and the attractive price, the CD-book packages sold sluggishly and were eventually discontinued.

"Software stores didn't have the shelf space for a niche product like that, and bookstores didn't know how to sell them," says Ted Hill, director of product development for Macmillan Digital Reference. "Plus, consumers don't think to look for travel information in a software store. And on top of all that, there's been growing competition from the Web." The end result: Frommer's has no more plans for CD-ROM travel titles, and instead has developed one of the Web's largest travel sites, Arthur Frommer's Encyclopedia of Outspoken Travel.

According to Hill (and others interviewed for this article), only two kinds of travel CD-ROMs still sell: trip planning programs that cover multiple destinations, and interactive mapping programs. Trip-planning CD-ROMs, which enable the user to generate a detailed driving itinerary from one destination to another and get travel information, photos and even videos along the way, are probably the biggest sellers of any travel CDs, with some one million units in total sold in 1996, according to Chris Wendy, director of marketing for Rand McNally New Media. Rand McNally's TripMaker has been a category leader for several years, and for 1998, the company has released both a standard and a deluxe version. Microsoft's Expedia Trip Planner is its most prominent competitor.

In the atlas category, the most successful programs are those that let the user chart a course within major U.S. cities. Rand McNally's StreetFinder and Microsoft's Expedia Streets are the two leading products. Another hot category: world atlases. Hammond Inc. recently released its first CD-ROM, Atlas of the World, and is selling the CD both separately and as part of a book bundle, while Rand McNally just introduced its contender, New Millennium World Atlas.

For now, these companies plan to continue making their CD-ROMs, though most of the programs they're selling have tie-ins to the Web. Rand McNally's TripMaker Deluxe, for instance, enables the user to go directly from the CD-ROM program onto Rand McNally's Web site for the latest highway construction updates, says Wendy, and can even incorporate updated detour information into the trip itinerary generated by the CD-ROM.

Eventually, though, even these travel CD-ROMs may fade to black. "Our Web site exists mainly to support our CD-ROM products," Wendy says. "Down the road, though, the probability is pretty high that we'll move our products completely to the Web."

The logic of this situation seems right out of Alice in Wonderland. But for many travel publishers, making all, or at least some, of their guidebook content available on the World Wide Web for free is seen by many as an important way to stay competitive nowadays.

"Two years ago, when we first put the entire text of our Rough Guide USA on the Internet, there was this big, collective gasp," recalls associate publisher Jean Marie Kelly. "The thought was it would really hurt our chances of selling that book. But in fact, it's been the reverse: the second edition has sold three times as well as the first, and I'd guess up to half of those sales came from having the book on the Web."

Bill Newlin, publisher of Moon Publications, agrees. "We think large numbers of people are discovering our books on the Internet first, then looking for them in bookstores." He adds that "the book Road Trip USA was published on our site, and it's become our best-selling book ever."

Many booksellers -- even those who were once wary of travel publishers posting a book's entire contents on the Web for free -- agree the Internet has evolved into a powerful marketing tool for travel titles. "The Web gives people a taste of what a guidebook can offer," says Spencer Newman, president of Adventurous Traveler Bookstore, a Burlington, Vt., retailer with a large mail-order and Internet business. "And that translates to book sales. Rough Guides, for instance, has a terrific presence on the Web, and as a result, we sell a lot of their books through our own Web site."

Grab a Partner and Dance

While offering free content on the Net appears to help book sales, there are costs involved in developing and running a Web site -- anywhere from $2000 a month for a basic site to millions of dollars for a state-of-the-art, fully staffed operation. To help offset those costs and, in many cases, earn additional revenue, guidebook publishers are venturing into a number of new areas.

One of the biggest recent developments in Web travel sites is the move toward partnerships and licensing agreements. "We're not a travel agency, and we're not a technology company," says Brent Peich, director of new media for Fodor's Travel Publications. "And so for us, relationships have become an integral part of our strategy." Fodor's has its own Web site, which enables visitors to quickly retrieve a wealth of information adapted from its guidebooks. That site currently generates little income per se for Fodor's, Peich says, but helps build awareness of and loyalty for the Fodor's guides.

At the same time, Fodor's is earning money by licensing its digital content. For instance, Fodor's has licensed the content of its Mobil Travel Guides to MapQuest, an interactive mapping Web site. A visitor to the MapQuest site's TravelPlan USA channel can find a destination on a map -- a hotel in Chicago, perhaps-then pinpoint on the map Mobil -- reviewed restaurants near the hotel. Fodor's has also licensed its Mobil Travel Guide content to Rand McNally New Media, which has incorporated the data into its TripMaker and StreetFinder CD-ROMs.

Virtually all the other guidebook publishers have developed one or more strategic partnerships as well. Rough Guides was one of the first, providing travel guide content to HotWired, the online offshoot of Wired magazine, since late 1995. Rough Guides has the full text of some 12 guidebooks online at the HotWired site, while its own Web site (which has a link to HotWired) is primarily a promotional vehicle. Moon Publications licenses destination information to Microsoft, for use in the software giant's Trip Planner CD-ROM, and plans to announce additional partnerships in the near future. Arthur Frommer's Outspoken Encyclopedia of Travel, a site developed by Macmillan Online (a division of Simon &Schuster Macmillan, which publishes the Frommer's guidebooks), has a partnership with Travelocity, an all-encompassing Web travel site. Visitors to Frommer's site can jump, via a hyperlink, to the Travelocity site and book a reservation; Frommer's receives a commission for each booking.

The bottom line is that travel guidebook publishers must develop multiple streams of revenues (primarily through a variety of partnerships) in order to make the transition from guidebook publisher to 21st-century content provider. "We're in the transition from being a guidebook publisher to a multimedia company," says Rob Flynn, publisher of interactive media for Lonely Planet in Melbourne, Australia. "The ability to have audio, video, interactivity, maps and text is forcing us to make a radical reappraisal of the business we're in. It's exciting, and anxiety producing, all at the same time."
Future Travel
by James A. Martin

CD-ROMs represent the digital travel guide's past, and the World Wide Web its present -- but what about its future? Here's a look at what's on the horizon.

Automobile navigation and communications systems. Several new high-end car models come equipped with global position system (GPS) computers as a navigational aid. But Fodor's is taking a different approach. The travel guidebook publisher has signed a deal with OnStar, a division of General Motors, to provide Mobil Travel Guide restaurant, hotel and other data over the OnStar cellular phone navigation and communications service. When a driver needs directions, for instance, he or she can call the OnStar service using an in-car cellular phone. An operator at the OnStar site will locate the car's position on OnStar's GPS system, then advise the driver how to get to his or her destination. In addition, the OnStar operator can access the Mobil Travel Guide data and tell the driver about any Mobil-reviewed restaurants or hotels along the route. "In a car, talking on a cell phone is safer than looking at a computer screen," explains Brent Peich, director of new media for Fodor's Travel Publications Inc. The service is currently offered in Cadillac models, says Peich.

Handheld computers with downloadable software. Personal Digital Assistants (PDAs) and palm-top computers have been around for years. But they're just now becoming widely popular, many of them run a version of the Microsoft Windows operating system, and almost all now have the ability to link to the Internet. That makes it possible to develop software modules, such as up-to-date travel guide information, that a user can download off the Internet, install on a PDA and take the data on the road. Lonely Planet is in the process of testing software for handheld PCs and expects to release a product next year, according to Rob Flynn, publisher of interactive media.

Interactive in-flight travel guides. Lonely Planet is also working with several airlines that are adding miniature computer terminals/video monitors to seat backs in their business- and first-class sections. Once these terminals are in place, a traveler could get an overview (in video, audio and text) of his or her destination, as well as up-to-date hotel and restaurant reviews, entertainment listings and more, while soaring at 37,000 feet. Flynn declined to say which airlines Lonely Planet was in negotiation with but said its software should be in seat-back terminals sometime in 1998.

D s It Pay to Advertise?

In addition to licensing agreements, accepting advertisements is another potential stream of revenue that some guidebook publishers are experimenting with on the Web. Arthur Frommer's Outspoken Encyclopedia of Travel, for instance, earns 75-80% of its revenue from advertising sponsors, which include United Airlines, the Weather Channel and Hilton Hotels, according to Jonathan Fishel, travel product manager for Macmillan Online. Frommer's is one of the Web's most ambitious travel sites, with some 6000 pages of content (travel advisories, fare updates, destination information, etc.) that generate approximately 900,000 page views a month. The site went online in February 1997 and is already earning a profit, Fishel says. "Our goal was to establish the Frommer's brand name in a new medium and to generate income for Macmillan at the same time. There was no question we would need to support such an ambitious site with advertising." The Frommer's site contains a great deal of original content, Fishel adds, which complements, but d sn't detract from, the Frommer's guides.

Other guidebook publishers look to their partners to bring in advertising money. Rough Guides has made over $100,000 in advertising revenues, says Kelly, by virtue of its partnership with HotWired. Rough Guides has little if any advertising on its own Web site, but receives revenues from its participation on the HotWired site, which d s accept ads. "It's not a big profit center," says Kelly, "but it helps pay for our own Web site and for a full-time editor, who puts up our content on the HotWired site."

Still other publishers, such as Fodor's, don't see online ads as strategic for success on the Web. "We have very limited plans for ads," says Peich. "We accept paid ads from time to time, but from our perspective, generating revenue from licenses and partnerships is the way to go."

Pay Per View?

Travel guides, like other reference books, lend themselves in particular to being sold on the Web on a piecemeal, as-needed basis. For instance, if a business executive is headed to Washington, D.C., for two nights, he or she could download a list of restaurants for a nominal fee, as opposed to springing for the cost of an entire guidebook.

Most publishers say they aren't interested in charging for their online content -- at least, not now. "There's just not a good 'pay-per-view' model in place on the Web yet," says Fodor's Peich. "The problem is that there's just so much free travel information on the Web, it would be hard to convince someone to pay for it."

Kelly at Rough Guides feels that charging for online content would do more harm than good. "Our guidebooks are designed to give a nice reading experience," she explains, "and I'd hate to see people taking bits and pieces of a book out without having that whole experience. It shortchanges what we have to sell."

Once electronic cash technologies become more widespread and consumers are less concerned about security on the Net, however, some publishers plan to test selling bite-sized information online. "As soon as the time is right, and we figure out how to make money putting our entire atlas on the Web, we're going to do it," says Kathy Hammond, president and publisher of Hammond Inc., which recently released a CD-ROM version of its Atlas of the World.

"If someone only wants the United States atlas," Hammond explains, "he or she could pay a fee to download that map. Later, if that person needs Europe, too, then that map would be available for another fee. Once that person has paid an amount equivalent to the cost of our CD-ROM, then we'd let them download the rest of the atlas at no cost. We'd want this to be fair to the users, but at the same time, we don't want to undermine our CD-ROM product either." Hammond couldn't say when the company's atlas products might be available for a fee off the Web.

Selling Travel Guides Online

In another effort to help offset the costs of a Web site, a number of travel publishers -- among them Fodor's, Lonely Planet, Rough Guides and Moon Publications -- are now selling guidebooks directly from their Web sites. Mindful of the ill will this practice can create with booksellers, the majority say they've always sold books undiscounted by mail as a convenience to readers, and selling off the Net is just an extension of that practice. What's more, many of the guidebook publishers' sites also offer links to bookstores with Web sites, in hopes of directing potential buyers to those retailers.

"Those publishers selling books from their Web sites are being quite unwise," says Elaine Petrocelli, co-owner of Book Passage in Corte Madera, Calif., which has a large travel-book division and sells books from its Web site. "Their business is publishing, not selling, and I don't think they're doing it well enough to justify the bad feelings it can create with bookstores." Kelly would agree: "I happen to think bookstores are the perfect distribution channel for us. They know how to sell books better than we do, and we respect that."

What's Next on the Web
Finding Your Way on the Web

Here are the addresses you'll need to visit the Web sites mentioned in this article.

Rough Guides:www.roughguides.com or www.hotwired.com

Moon Publications:www.moon.com

Adventurous Traveler Bookstore:www.adventuroustraveler.com



Microsoft Expedia:www.expedia.com

Arthur Frommer's Outspoken Encyclopedia of Travel:www.frommers.com


Lonely Planet:www.lonelyplanet.com

Hammond Inc:www.hammondmap.com

Book Passage:www.bookpassage.com

Web sites are becoming more than just online brochures, and guidebook publishers are working to take advantage of the new technologies available. Offering multimedia -- audio, panoramic pictures, video clips -- is a logical progression for travel sites. Microsoft's Expedia, for instance, offers a gallery of panoramic snapshots, enabling the user to experience a full 360-degree view of such sights as the Leaning Tower of Pisa. For now, though, multimedia is mostly found only on the more technically ambitious, big-budget sites, such as Expedia, because the content is expensive and difficult to produce.

"Microsoft has many years of developing smart and useful consumer software, and we're putting that to good use with Expedia," says Joshua Herst, group product manager for Expedia. He adds that the Expedia site has been "a huge investment" for Microsoft (the staff numbers over 125 people). And despite earning some $2 million in travel bookings revenues per week, the Expedia site (launched in late 1996) hasn't reached profitability yet.

One technology, called "push" because it enables a content provider to send information directly to an individual's computer, is much more within a travel Web site developer's grasp. That's because using push technology involves partnering with other companies (such as Netscape) who provide the technological backbone, while the publisher provides the content.

"Our objective is to drive people to our Web site," says Frommer's Fishel. "One way to do that is send out teasers that raise enough curiosity so that a person would come to our site for more information." Frommer's is working with Netscape's In-Box Direct, which sends selected Web pages directly to a recipient's e-mail address, and the PointCast Network, which transmits headlines throughout the day directly to a recipient's computer screen. The headlines could announce the outbreak of a major new airline fare war, Fishel says. Once the viewer clicks on that headline, he or she would be taken to the Frommer's site, where the full text of the story (from Frommer's online newsletter) would be provided.

Meanwhile, Lonely Planet is planning an enhancement to its Web site that is far simpler, technologically speaking, than multimedia or push technologies and has a much more immediate benefit to its book buyers. "By the end of this year," says Flynn, "we plan to have updates (in the form of text files) to at least 50 of our guidebooks, maybe more, available for downloading off our site, free of charge." Flynn feels the updates will add value to the printed books, and at some point, Lonely Planet will probably charge users a fee to download them.

One Size Fits All

The explosion of the Internet, along with the emergence of other digital devices such as handheld computers, makes it imperative that a travel guidebook publisher's content be developed into a one-size-fits-all database, according to Peich. Fodor's, for instance, has embarked on an ambitious project estimated at costing $2-10 million to develop a relational database that contains all of its guidebook content. With the Unix-based database, the content is entered and edited only once but can be used in countless ways-in everything from a Web site to an in-car navigation system to a printed book-without the need for major reformatting or revising, according to Peich.

"In the past, we may have done 12 different books on San Francisco, but those 12 books often had different editors," Peich explains. "As a result, the phone numbers and addresses in those books were often checked separately. With this database, a phone number and address would be checked once, but can be used in a variety of ways. It creates editing efficiencies and enables us to act quickly in generating products, such as 'instant' books." As an example, Peich sites an upcoming Fodor's guide to Savannah, Ga., timed to coincide with the fall release of the film Midnight in the Garden of Good and Evil, which is set in Savannah. The guidebook wasn't developed using the still-under-construction database, but it's the kind of fast-turnaround book Fodor's could generate easily with the help of the database. The database project has been under development for nearly three years, Peich notes, and is expected to be fully operational in early 1998.

The Road Ahead

With the continuing growth of the Internet and other digital media, do travel-book publishers foresee a time in which electronic travel guides will rule, and paperback guides will be a sideline business?

"Yes," says Lonely Planet's Flynn. "I think our interactive publishing unit will be the dominant source of income for us within a decade or so. Digital travel guides will help us reach a whole new market, and that's where the real growth potential is." She adds that "there will still be a demand for books. Digital travel guides are great for helping people plan a trip-to find the best hotels and restaurants. When they're actually on that trip, however, a travel guidebook is invaluable. They can carry it with them wherever they go."

Fodor's Peich agrees. "It's likely that at some point, though it's hard to say when, our primary revenue source might be from our electronic products. But those products will have to pass what I call 'the test.' Imagine that you're sitting on a beach with your travel guide, whatever it may be, and a freak thunderstorm pops up. As you're scrambling out of your chair, your guide gets rained on, and it gets sandy and then you drop it. After all that, if your guide is still functioning properly and it's still readable, then that's the guide that's going to work in the long run, whether it's made of paper or silicon."
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