The Inside Story

Inside.com was supposed to be Web content at its best-smart, behind-the-scenes information about newspapers, magazines, the record industry, Hollywood and book and digital publishing. It was supposed to feature the kind of stories that could enliven a TriBeCa cocktail party or give a Hollywood executive a leg up.

The founders of its parent company, Powerful Media, had impressive pedigrees: Kurt Andersen was formerly the editor of Spy and New York magazine, Michael Hirschorn had run Spin and publisher Deanna Brown came from Brill's Content.

How it Happened: The Chronology

Dec. 1999

Renouncing print magazines as a relic of the Old Economy, former New York and Spy magazine editor Kurt Andersen, former Brill's Content president Deanna Brown and one-time Spin magazine editor Michael Hirschorn announce their company, Powerful Media. Reports say they've raised $28 million to launch a Web site, then referred to as Inside Dope. Promising to bring behind-the-scenes stories from the media, book publishing, television and music industries, Andersen predicts that "millions and millions worldwide" will pay $199 a year to read his Web site.

March 2000

Nasdaq peaks and begins its long descent.

May 2000

Inside.com, comfortable in its hip West Chelsea offices, launches its Web site with great fanfare. Initially, they offer free trial subscriptions. The founders say they will soon have 100,000 paid subscribers. The launch party attracts Dick Wolf, Tom Brokaw, Courtney Love and Oliver Platt (researching his role for the short-lived TV series "Deadline").

June 22, 2000

Inside.com founders begin to rethink the scale of their product. "We don't have any expectations of this thing being built into some huge, ten-figure behemoth. We're very sober-sided about this operation," says Hirschorn.

July 5, 2000

"Profitability is possible," Andersen announces.

Aug. 28, 2000

Inside.com chief executive Brown admits the company has been unable to sell even 30,000 paid subscriptions.

Sept. 2000

Powerful Media gets ready to publish a print magazine called Inside. At the same time, the magazine industry begins to face difficult times and slash advertising budgets.

Dec. 5, 2000

First issue of Inside magazine appears, though it's very difficult to find.

April 2, 2001

Powerful Media is purchased by media entrepreneur Steven Brill, who says he will create a hybrid of Brill's Content and Inside. It will be a new magazine called Inside Content. Inside.com will now become the Web arm of Inside Content and the 172 trade magazine and industry newsletters, owned by media conglomerate Primedia and controlled by Brill. Primedia stock prices drops to a 52-week low when word of the announcement hits Wall Street. About a third of Inside's staff is fired.

Though their focus was of interest to a rarified group of entertainment and media industry executives-notorious for getting information, subscriptions, books and records free-the founders of Inside.com seemed to want nothing short of world domination. "Millions and millions, worldwide" would want to read this, Andersen said in December 1999. He believed many of them would pay $199 a year to hear the hottest and latest buzz.

But in a extraordinary demonstration of bad timing, the Web site was launched last May, just as the dot-com bubble burst. At its peak, Inside.com subscribers still numbered under 10,000. As the founders quickly burned through all but $10 million of their $35 million start-up money, a Web-based business model-one that conveniently omitted a viable revenue stream-began to look uncertain. Missing the zeitgeist again, the company tried to transform itself into an old media company, launching Inside magazine, just as advertising dollars began to dry up and the publishing industry as a whole began to suffer.

On April 2, Inside magazine and Inside.com were finally gobbled up by media entrepreneur Steven Brill, founder of Court TV and Brill's Content. The mogul had recently taken control of 172 print trade publications- including Paul Kagan's newsletter, American Demographic, Folio Magazine and Cable World-and other media products like Web sites and databases, dubbing the entire entity Media Central.

Now Brill thinks with the "absorption" of Powerful Media's Inside magazine, he may have found a way to jumpstart Brill's Content, which has about 400,000 subscribers but hasn't attracted the high-end advertising he covets. He will meld Brill's Content with Inside magazine to produce yet another magazine called Inside Content. According to Brill's Content editor in chief David Kuhn, Inside Content will feature more business-oriented media stories and cover "the players in Hollywood."

More significantly, Brill says he has also come up with a way to make Inside.com pay its own freight. The once-sexy offspring of the Manhattan media hothouse will become the Web arm-and a circulation tool-of Brill's entire Media Central entity.

According to Kuhn, staffers from the 172 various newsletters and trade magazines will use Inside.com to post their breaking stories. Viewers who log on to the free site will be funneled to the newsletters and trade publications themselves-where Brill hopes they'll be enticed to become paying subscribers.

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