This story was written by Staci D. Kramer.
Consumers Union's new non-profit subsidiary Consumer Media LLC launches on Jan. 1 with newly acquired Consumerist.com as its only property but the announcement release stressed that it's the first. Does this mean more acquisitions are on the way? "The short answer is we don't know," Ken Weine, VP-communications, told us. "We may down the road acquire or create new items." Consumer Media is viewed as a way to expand the nonprofit's consumer advocacy mission and to take advantage of a growth spurt in recent years.
For now, the new subsidiary sets boundaries between Consumerist, acquired this week from Gawker Media, and CU's Consumer Reports magazine and website. "The message we're trying to projectand the reality will reflect thisis we're not purchasing Consumerist to make it into Consumer Reports and we wanted for that, among other reasons, to structurally create some distance between the two."
But that distance doesn't include a change CU's policy towards advertising. Weine said the only ads on Consumerist will be house ads for Consumer Reports products. ConsumerReports.org has 3.3 million paid subscribers and provides a blend of premium and free content. Plans call for Consumerist to remain free. Weine: "As of now the only thing in Consumer Media is free content and that's our intention." So what's the business model? Weine suggests stepping back first to see the business model for Consumers Union, which is 90 percent subscription supported. The business model for Consumerist is introducing more peopleand younger people, as we reported yesterday when the sale became publicto Consumer Reports products but Consumerist editorially is also part of that overall consumer advocacy mission.
By Staci D. Kramer