Well, “business” is not the right word, as there are no profits or losses to track: it’s a nonprofit. But the magazine and Web site generated $182 million in revenue in the 2011 fiscal year, which ended May 31. That pays for a lot of professional testing — of cars and trucks, washers and dryers, televisions, children’s car seats, mattresses, treadmills and cellphone plans — all told, more than 3,600 products and services a year.
Consumer Reports started its Web site in 1997; by 2001, it had 557,000 subscribers. That number has grown to 3.3 million this year, an increase of nearly 500 percent in 10 years. It has more than six times as many digital subscribers as The Wall Street Journal, the leader among newspapers.
And in August, Consumer Reports started generating more revenue from digital subscriptions than from print — a feat that must make it the envy of the print world struggling to make that transition. Even more amazingly, Consumer Reports has enjoyed success on the Web without losing print subscribers — those have held steady since 2001 at around four million.
Subscribers who sign up for access to the Web site pay $26 for a year or $5.95 monthly. A smartphone app is available, and this month an iPad version was introduced, with varying price levels.
“Five years ago, the Web site was just the magazine put online, word for word,” says Kevin McKean, Consumer Reports’ editorial director. Formerly, products were tested in batches, but today testing occurs whenever a new model is released. Results are quickly available online, instead of being held up for the once-a-year roundup of reviews of a particular product category in the magazine.
Consumer Reports’ online success is not necessarily a bellwether for other Web sites seeking paying subscribers, says Bill Grueskin, dean of academic affairs at the Graduate School of Journalism at Columbia University and formerly managing editor of WSJ.com.
“It isn’t much of a leap for people to pay $5.95 a month for access to a database that will help them make a wise purchase of a $500 dishwasher or a $25,000 car,” Mr. Grueskin says. “It is much harder to get consumers — particularly those trained for the past 15 years to expect content for free — to pay for coverage of metro news, football games or politics.”
Consumer Reports has been helped by consistency in its payment policy, he says: “I don’t recall them ever taking the subscription wall down and then rebuilding it the next year. So customers understand that they can’t ‘wait it out’ while the publisher vacillates between paid and free.”
A consistent policy of not allowing advertisements has helped Consumer Reports protect a reputation for clearsighted recommendations, untainted by commercial considerations. It also keeps its name away from use as an endorsement. Merchants whose products earn a spot on the recommended list would like nothing better than to mention it, but Consumer Reports forbids them from doing so.
Well before the term “crowdsourcing” arose, Consumer Reports supplemented its lab testing with surveys of subscribers, asking them to report on their experiences with various products. Its 2011 annual questionnaire drew 960,000 responses, more than double those in 2001, and included reports on the respondents’ 1.4 million vehicles.
When it comes to helping consumers buy a used car, Consumer Reports owns the mother lode of useful data. But consumers can find useful, free information elsewhere on many products. Amazon’s customers, for example, post reviews and all sorts of information that doesn’t always fit into the slots used by Consumer Reports. Mr. Grueskin gave an example: when setting up a Wii game console recently for his daughter, he ran into a problem. “I found the solution on an Amazon chat board, not on Consumer Reports’ site,” he says.
Consumer Reports is rather set in its ways. The confusing symbols it uses for its ratings — the filled-in, partially filled-in or empty circles, in red or black — violate plenty of graphic design principles. Mr. McKean says that he is aware of the shortcomings of the circle, referred to internally as “the Blob,” but that it has been hard to discard because many subscribers regard it as “a critical part of our DNA.”
The organization has moved to inject some youthful creativity into its culture: in 2008, it acquired Consumerist Media. The Consumerist gets three million unique monthly visitors, who snack on summaries of news stories about defective products, horrendous customer service, billing outrages and other delectable morsels.
Mr. McKean says the Consumerist pulls in younger people who are then exposed to Consumer Reports’ promotions of subscription products. He doesn’t expect them to sign up, though, until they find themselves “enmeshed in sweaty-palms buying decisions.”
Consumer Reports continues to supply the kind of authoritative information that can ease purchase-decision anxiety. Robust at 75 — and more digital than not— it’s the spry graybeard of the information age.
Randall Stross is an author based in Silicon Valley and a professor of business at San Jose State University. E-mail: stross@nytimes.com.
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