Allie Ash, master founder and acquirer of newsletter companies.

Allie Ash marks 30 years in the newsletter business in 2007. (Actually he began a decade earlier as a part-time college student "intern" at Capital Publications which was founded by three alums of his fraternity.) He joined Cap Pub full-time in 1977, by then a CPA following naval service and grad school, serving initially, he said, as "accountant, customer service department and receptionist, all at the same time."

In the next few years the company grew dramatically. Originally strictly a business newsletter publisher, Cap Pub acquired KCI, publishers of Personal Finance in 1981. In 1984 founder Ken Callaway retired and Allie was able to acquire the company.

Growth through acquisitions

Growth continued. The National Institute of Business Management (NIBM) was created from acquisitions from Research Institute of America in 1987 and in 1991-92 the spectacularly successful Louis Rukeyser investment newsletter was launched (and the last business newsletters from the original Cap Pub were sold).

Completing the circle, Ash got back into the b-to-b newsletter business with a July 2005 acquisition of some of the titles Len Eiserer had published at Business Publishers Inc. "Unfortunately," Allie says, "we weren't able to re-acquire Economic Opportunity Report [Cap Pub's first title, launched in 1965]. There were some regrets here about that." They have, however, been able to add Adam Goldstein to the staff in this area. Goldstein was briefly publisher at BPI before the firm was sold again to Eli Research.

So, where are they today? Newsletter Holdings LLC currently comprises the following companies:

* Capitol Press LLC, publisher of the 2 Louis Rukeyser newsletters and 1 other investment advisory;

* National Institute of Business Management Inc., publisher of 6 newsletters for business managers and executives;

* KCI Communications, publisher of the multi-award-winning Personal Finance and 7 other investment advisories;

* Ferrari of Washington--yes, the automobile.

Newsletter Holdings, through its three publishing divisions, publishes 17 newsletters, over 50 special reports and books and numerous fax, e-mail and Internet services. They have a paid circulation of over 600,000 readers across the globe, who receive information and advice on investing, health and nutrition, management and career strategies, economic forecasting and methods to minimize both corporate and personal taxes.

Newsletter Holdings has 75-80 employees. And it has become a two-generation firm. Allie's son Phillip (who co-chaired the recent SIPA conference in Las Vegas) joined several years back. "He literally began in the mailroom," Allie said, "but took to the business like the proverbial duck to water and when we reorganized he became publisher at NIBM (and our point man with SIPA). He seems to have the appropriate level of rat-like cunning to succeed in the newsletter business."

Print newsletters are here to stay

Print newsletters, Allie says, aren't going away anytime soon. "Look back over the past years and the various technologies that were going to make print obsolete--FM sideband, the internet--but it hasn't happened.

"What has happened is that it is now increasingly difficult to sell subscriptions by direct mail. It's a conundrum because I don't see a similar decline in reader 'appreciation' of print newsletters. Of course, the Rukeyser letter has declined since Lou's death last year, but it is still profitable and Personal Finance is doing very well. An interesting statistic is that not only do renewals remain strong, but we are experiencing the highest level of conversions (first full year renewals) for those titles in our history."

The economics of direct mail

"But with subscription lists across the industry declining, the mailing lists you can rent get smaller, and you work harder and harder to get subs ... it's a bit like a dog chasing its tail until it runs up its own [expletive deleted]."

"The economics of direct mail remain wonderful. If you can drop a mailing of 500,000 names you can get a big slug of revenue. I don't know another marketing system with the leverage that can provide the dynamic growth of direct mail."

The economics of online publishing

On the online side, Allie says, "We've also gone in the other direction and created new products that are tailored to the internet. Canadian Edge and Energy Strategist are two that exist only in electronic versions and are marketed online.

"We grind out the free e-zines that provide marketing space through which we can sell online subs, some print stuff and special reports. We market relying heavily on our in-house e-mail names. We also use paid search. It is a continuous year-round effort. It's the dog chasing its tail again, but this time going in the opposite direction.

"With our online publications we've created a new business model. It has editorial staff, marketing people, back office, basically everything except the printer. But the economics are different. You market continually throughout the year and you can get a steady stream of revenues but until someone can rent you a million qualified e-mail addresses, you don't get the bursts direct mail campaigns can provide."

Asked if he was optimistic about 2007, Allie replied simply, "Yes."

Newsletter Holdings LLC, 7600 Leesburg Pike, West Building, #300, Falls Church, VA 22043, 703-905-4657, www.newsletterholdings.com