• by Gavin O'Malley , Staff Writer @mp_gavin, April 29, 2011

Taking the helm at TheStreet during the height of the recession in 2009, CEO Daryl Otte is used to the precariousness of online publishing. Good thing, given the company lost $5.7 million from a revenue of $57 million last year. Hopeful about the future, Otte points to investments made in the business, an improving economy and ad market, along with The New York Times' recent return to subscriptions as validation for TheStreet's mixed monetization model. Otte graciously took some time to elaborate on his optimism and why their model is right for our times.

What is the next big publishing trend that no one's talking about?
For digital media, it is back to the future. The industry is maturing and evolving closer to models that work in other media forms. The macro trends are familiar - digital advertisers value what is fundamental elsewhere: audience quality, custom programs meeting specific needs, the environment around buys. Publishers are emphasizing quality content and diversified revenue sources, steering ad distribution away from commoditizing networks that devalue product and audience. There's a lot of leadership going on - AOL with Project Devil, Google with changes to its algorithms to reflect user demand for quality and The New York Times with its paywall efforts. This trend plays to our strengths: quality content creation, coupled with excellent monetization made possible because both users and advertisers see value in what we provide.

What does The Times' latest paywall initiative mean for the greater online publishing industry? Even if successful, could it simply mean there are a few select brands - including The Times and The Journal - capable of getting consumers to open their wallets?
Subscriber revenue is critical to our DNA. You must add value to your users' lives. Users want something of value and if you deliver, they will happily pay. We've operated a business focused on user revenue for 15 years: It represents over 60 percent of our revenue. While we are not as large as the NYT or the WSJ, we do deploy resources that sites smaller than ours will have trouble mounting. Scale is increasingly an important aspect of successful digital publishing.

What's the next big move for TheStreet?
For us, 2010 was about investing in our business to grow off the strength of our assets. In 2011 we are confident we will show signs of that investment maturing. Our brand stands for the quality, professionally created journalism that users are willing to pay for. Our audiences are among the mos t sought after by advertisers. Each step we've taken in improving the business - focusing on quality audience growth, improving editorial-to-advertising ratios, launching new product, enhancing our natural search performance and building our sales and distribution efforts - has yielded gains.

How has the acquisition of marketing agency Kikucall over a year ago helped TheStreet build sub revenue?
The Kikucall acquisition was a key part of our strategy to position TheStreet to leverage its core assets. It brought technology and a team focused on online subscription marketing. Kikucall is integrated into our business and is driving the momentum in subscription levels and dollar bookings. The deal professionalized our efforts and broadened our sub-distribution channels, which together expanded our reach and distribution power markedly.

Jonty Kelt, CEO of group-buying platform provider Group Commerce, recently said every publisher should be offering its readers tailored deals. Do you think such a service could fit into TheStreet's business model?
TheStreet already offers its paying users a variety of subscription services at various price points. Within that spectrum, there are numerous combinations of customizable offerings from which to choose. Lower-cost entry products allow newer subscribers to sample. As their confidence in the value we offer grows, they tend to increase their commitment. I think we're ahead of the industry on this and I still see plenty more opportunity to pursue, like micro-transactions, so look out for new models from us soon.