Mom and Pop On-Line : Bulletin Boards Offer Opportunity--but Not Always Profit
For thousands of Southern Californians, the route to the information superhighway runs through a spare bedroom in Greg Gooden’s Van Nuys home.
As many as 60 people convene there at a time, using their personal computers and telephone lines to socialize, play games, use the library and pick up their mail.
Gooden’s bedroom is the home of the Annex, one of tens of thousands of small computer bulletin board services springing up around the country. With start-up costs as low as a few thousand dollars, bulletin boards are a good entrepreneurial opportunity for the technically savvy--and provide personal computer users with a friendly, low-cost alternative to national on-line services such as Prodigy, CompuServe and America Online.
“When you buy a modem, it usually comes with a trial subscription to one of the national services like Prodigy,” says Dale Porter, 31, who runs a bulletin board called KBBS out of his home in Northridge. “But when the trial period ends and Prodigy sends you this big bill, you realize it’s time to start shopping around. That’s how a lot of my customers find me.”
The mom-and-pop bulletin boards--of which there are now an estimated 57,000 nationwide, according to Boardwatch magazine--have nowhere near the array of on-line publications, databases, and shopping opportunities that the national services offer. But small bulletin boards can often provide a cozy electronic meeting place for people with special interests--dentists, for example, or stamp collectors.
And local, general-interest bulletin boards such as the Annex and KBBS are a bargain for PC owners who simply want to meet people through electronic “chat” sessions, play games and send electronic mail.
CompuServe, for example, charges $20 to join and levies a monthly fee of $8.95. Customers get unlimited access to the basic services, such as on-line publications and news files, but they can send only 60 mail messages a month without paying extra, and many of the more interesting services carry surcharges.
The Annex and KBBS, by contrast, offer full use of their systems for a flat rate. KBBS has a one-year subscription, which limits users to 90 minutes of on-line time each day, at $9.50 a month. A comparable subscription at the Annex costs $8 a month.
Some see other benefits as well. “One big attraction of a board like KBBS is its social character,” says Sharon Landers, 32, who has been a KBBS subscriber for two years. “I enjoy chatting with other users. Basically it’s an on-line community.”
Both KBBS and the Annex provide several channels where users can engage in live trivia games, group conversations or private chats. There are public discussions where users post questions or comments covering topics that range from horticulture to Howard Stern.
Customers can obtain games, spreadsheet and word-processing programs, and even buy products from an on-line shopping service. Subscribers can also send electronic mail to others, including anyone outside the system who has an address on the Internet, the worldwide computer network.
For the proprietors, however, making bulletin boards into profitable businesses is no easy feat. Gooden, a former office manager, logs 18-hour days surrounded by an array of computers, monitors and technical reference manuals. And even though his board is relatively successful--with 2,000 active users, it generates about $7,000 a month in subscription revenue--all the profits go back into the system.
“Los Angeles is probably the most competitive market in the country,” Gooden said. “If you want your board to survive, you’ve got to keep upgrading the system.” The Annex has just expanded its phone bank and can now accommodate 72 callers simultaneously.
Nationally, experts believe that only about 5% of all bulletin board systems are profitable, while 15% break even and the rest lose money.
Eric Higgins, who runs the BrainStorm bulletin board in Simi Valley, knows the financial challenges well.
“After four years . . . I haven’t come close to breaking even,” Higgins said. “Last year BrainStorm grossed $7,000. But I spent $14,000 upgrading and adding new features.”
Fortunately, the 32-year-old Higgins has a full-time job as an engineer with MagneTek, a defense subcontractor in Simi Valley. He’s been tapping his paycheck to subsidize his bulletin board, which he launched after trying various on-line services and finding their quality disappointing.
“I thought I could put together a more user-friendly setup,” he said. To get started, he spent $2,000 on an IBM clone PC and another $800 on software, modems and two telephone lines he had installed at his home. He now has eight lines and will soon add eight more.
But though BrainStorm has 630 regular callers, only 180 are paid subscribers, and Higgins says he needs 80 new subscribers each month to break even.
“I really don’t mind dipping into my own pocket to improve the system,” Higgins said. “I’m convinced that the BBS industry has a big future, and I want to be a part of it.”