Appellation America To Go Away

Apamlogo 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.

Appellation America is Gone on

13 Responses

  1. Phil - July 27, 2009

    Thanks for the update Tom, as you said, a sad day.
    I think many in the blogosphere would be surprised at how many people still prefer to have a physcial printed version of a magazine (if they are going to pay for it) rather than reading online. This will almost certainly change going forward, but I suspect it will change a lot slower and a lot less than many think.

  2. Joel Goldberg - July 27, 2009

    A misfortune for both consumers and the industry. They were doing more than anyone in the country to promote the virtues and qualities of regionalism. I can’t count how many times I linked to them for readers who wanted more in-depth coverage on a topic than warranted by the piece I was writing.

  3. Roger King - July 27, 2009

    Hey Tom
    I had always felt you would be the best voice to carry the opening commentary on these tough decision. It is toughest as those here now can see the missteps in basic strategy taken at the onset. Could this have been implemented 6 years ago; likely. But all the water (or we could say wine) alreay has flowed from behind the dam.
    Back in the early 1990’s I would comment to many publishers and ad sales guys (of same) in the travel industry that “Ink on Paper Is Not Going Away” Of course that was at the launch of the internet as consumer communications tool as we see it today. In media, it is still a reality. There is a perceptional issue surrounging tangibility that influences value. Could really use some damn good research to sort that out. Maybe Rupert Murdoch has done it as he still wants (invests in) ink on paper.
    One point of clarity, Appellation America will remain online, as you indicate. Subscription to see whatever content is there will remain the policy, subscriptions will continue to be taken on line. It was somewhat interesting to see who did subscribe rather quickly. It was many in the industry who used the content to construct parts of their product value proposition that were likely for compensated sale or fee.
    Then there was what I can call the poster child for the inherent reality of on-line media P&L.
    “Appellation America was a nice site to go to for wine purchases, wine trip planning, and educational articles, but alas, now it has become a subscription only venture. Bummer.” Boris Bauer Easley, SC
    Bummer indeed Boris, capitalism in the United States of America can simply define business reality: You must take in more than you spend. That takes me back to the top of this comment and the 1990’s when we all had a subcription to one or two daily newspapers and likely 4-5 magazines and thought nothing of it, just part of living expenses.
    I suspect long term it will be De Ja Vue all over again.

  4. Thomas Pellechia - July 27, 2009

    Tom, Roger,
    Sorry it had to be. As I’ve said, I was talked with early on when the Dials didn’t even have the A.A. concept in their heads yet.
    I see the lesson in a slightly different way. I think it’s impossible to mix information with promotion and sales and then expect to gain trust or subscriptions, whether in print or online.
    A.A. showed no clear line between the two, at least not from my perch.

  5. Arthur - July 27, 2009

    This is a historic moment. It will be difficult for the collective public consciousness to include the concept of “wine country” as anything but California, particularly Northern California. What a shame.

  6. Arthur - July 27, 2009

    And I don’t think their optimism in spotlighting other North American regions was a mistake.

  7. Charlie Olken - July 27, 2009

    I think this all goes back to what Tom said earlier on. It is very hard to offer content and make money solely online. People will pay for a certain amount of content if it is unique and has value in their daily lives. That is why all of the wine review publications from the Spectator, Enthusiast and Parker down to little guys like Tanzer and Connoisseurs’ Guide all have significant online paid readership.
    Appellation America never had anything to sell of value. It had reference material, good reference material, but reference material nonetheless. We all used it when we needed it, but it was not a must read on any kind of a regular basis and it is not surprising that it was the industry and a few internet red hots who were its only paid readership.
    Absent a staff to support, it is possible for AA to possibly continue on a low light while it looks, if it is looking, for yet another gambit to find its way to sustainability.
    As for the CA/West Coast vs. the rest of the country argument, it holds a little water but not much. You need only have looked at the most often referenced items on AA to know that it had plenty of CA readership and that the non-CA content was essentially static and in place. All of the writers were CA guys–Berger, Smith, Goldfarb, Lasky and most of the original content was CA and West Coast oriented. Is it different in WS or WA or any other publication–at least in terms of their US coverage?
    And I will tell you from decades of experience, despite the large percentage of US wine consumption that comes from the left coast, writing a publication that focuses exclusively on that niche (or even that niche with less known niches like Michigan and NY–let alone NM, TX or VA) is not the pathway to large readership. That path lies in a world view–something that I flirt with but have decided that I am too old to learn that new trick.
    So, AA will either fade slowly or find a way to rise another day somehow. In the meantime, all the websites that had similar content will re-arise or new ones will take their place. Connoisseurs’ Guide will fill the gap for CA AVAs. Indeed, that content is already written, for a new book on CA wine. Putting it online was already scheduled in due time.
    What may also emerge, and this is where I think AA will have had a lasting effect and what may ultimately be seen as its legacy, is the development of locally oriented blogs and BlogAZines, with either unpaid staff or lightly paid staff supported poorly but supported nonetheless by some form of revenue stream.
    The need for the information supplied by AA is not going away. The cost of providing it and accessing it will both turn out to be relatively low absent more compelling impact on people’s daily lives.

  8. Sarah C - July 27, 2009

    Maybe people were turned off by their initials, AA.

  9. Jack - Helpful as Always - July 27, 2009

    What’s wrong with the American Airlines moniker?

  10. Steve Heimoff - July 28, 2009

    I was never convinced of the feasibility of AA’s blue book effort to categorize all of America’s appellations, so I don’t see it as ground-breaking. But I do mourn AA’s passing and I feel for the writers, many of them my long time friends.

  11. Alan Kropf - July 30, 2009

    Great post Tom, and I think that it hits on the idea that the struggles of one industry do not validate the business viability of another. Print will rebound, and its current struggles are economic. I don’t think you can compare print and blogging at all, which I see as being an opportunity, and Mutineer Magazine couldn’t be more pumped up about the exploding blog medium.

  12. Jeff Dorenbush - July 30, 2009

    Interesting read… I think Internet users are in a mentality that content is and should be free on the Internet. Creating a subscription model that users have to pay for seems like a dangerous route to take.
    On the side of print media — I am convinced that print will turn back around and is not in its dying stages. Blogging is a totally different format and is not print medias replacement.

  13. Drop Ship Services - October 19, 2009

    Very helpful post, a friend told me about this service to set up ebay stores and make some extra money. I read about it and seems to be really profitable, check it out if you are interested

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