Grandich Letter migrates to Agoracom

'Paper Newsletter' Migrates Online

Subscription Base Key

By Grant Surridge
Financial Post / National Post, Toronto
Monday, October 06, 2008

http://www.financialpost.com/story.html?id=862395

It has scrambled the business model for print publications of all kinds, so it's hardly a surprise that the Internet is changing the game for investing newsletters too.

It was a sign of the times last Friday when investing guru Peter Grandich agreed to sell his Grandich Letter to Toronto-based online investment community Agoracom.com and join the site as a blogger. "The paper newsletter, so to speak, is just going to be a dinosaur," Mr. Grandich said. "Everybody is going to go to the Web for any type of reading."

A combination of factors -- including rising print costs, the instant availability of information online, and fewer customers willing to pay high-priced subscription fees -- has newsletter publishers looking to incorporate online components into a staid business model.

The biggest problem with newsletters, whether mailed out as a paper product or sent through e-mail, is that they are extremely easy to copy and distribute electronically, Mr. Grandich said.

Agoracom bills itself as an investment community where retail investors meet online to debate the pros and cons of various stocks. It's also where public companies -- primarily small-caps -- can communicate directly with shareholders.

Mr. Grandich will offer his opinions and commentary in a blog incorporated into the Agoracom site.

"If you take a look around at the profile of the typical newsletter writer, they've been around for 15 years and they haven't changed their business model," said Agoracom founder George Tsiolis. The problem, he said, is that they have no way to grow their subscriber base.

Mr. Tsiolis believes that Web 2.0 -- the evolution of the Internet that lets people interact in social networking sites and share multimedia -- represents the future of investing newsletters.

"The people who talk about promotion and advertising and the industry in general, the people I talk to at conferences, they all say this is the direction the industry is going," said Mark Hulbert, who publishes the Hulbert Financial Digest, which tracks the performance of about 200 investing newsletters.

There is such an overwhelming amount of free information available on the Internet that people are more reluctant to either pay or wait for a paper publication that arrives weekly or monthly, Mr. Hulbert said.

The meltdown in the financial sector hasn't helped matters either, thinning the ranks of customers willing to shell out the several hundred dollars a month investing newsletters typically charge.

However, those with quality content, a strong brand, and a loyal subscriber base will survive because the subscription model remains lucrative when managed properly, Mr. Hulbert said.

Dennis Gartman has published the influential Gartman Letter since 1984. He sends out his newsletter in electronic format daily to a list of subscribers h e says number in the thousands.

He charges $500 a month to clients that include hedge funds and brokerage houses.

He said there is no question more and more of his peers are looking to abandon the paper newsletter format and migrate online.

But he said he is running a lucrative business and has no plans start a blog or a Web site to expand his readership.

"I'm a one-trick pony, and I'm old," he said.

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For Peter Grandich's daily commentary:

http://agoracom.com/

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