National Obituary Archive(NOA)

By: Vinee Tong
1/29/2001

Just when it looked like the online funeral services sector was a dying business, more life is being breathed into the industry.

Despite a wave of Web startup failures and mergers, funeral homes and death industry-related companies nationwide are still jumping on the Web in search of new customers. For instance, Forethought Financial Services, a funeral insurance provider, plans an official launch of its Forethought.com Web site in April.

The Internet is a great way for people to learn about funerals and also to find funeral homes, a brick-and-mortar side of the business that won't disappear, says Rachel Myers, marketing director at Forethought. Funeral directors "cannot deliver a funeral over the Internet," says Ms. Myers. "UPS cannot bring one to your door."

The funeral industry represents a $25 billion market, fueled by 2.4 million deaths in the U.S. annually. Those big, and reliable, numbers imply the Internet will likely become an important channel for reaching those potential customers. Up until recently, the customers were nearly always the families of the deceased; the Internet is popularizing the idea of prearranging one's own memorial and burial.

DEALING WITH DESTINY
By creating a Web site, Forethought hopes to increase its sales of pre-pay insurance plans by offering an easy and quick way to provide information and to order policies online, according to Ms. Myers.

Forethought's plans also call for its Web site to direct shoppers to local funeral home Web sites, allowing funeral directors to pitch plans and provide information on costs, music, chapels, and other funeral-related details.

Forethought is a unit of Hillenbrand Industries, a holding company based in Batesville, Indiana. Hillenbrand also owns Batesville Casket Company, which was founded in the early 1900s. Hillenbrand funded with an undisclosed sum the Forethought Web site, which has 15 full-time employees, according to Ms. Myers. Forethought, which now claims 1.4 million policyholders, began selling funeral insurance in 1985.

Already, several Internet funeral planning startups have closed their Web sites or merged operations with other companies. In December, for instance, Arrangeonline.com acquired WebObits.com in a stock swap. The combined company struck a deal with AOL (NYSE: AOL) to maintain a database listing 10 million death records on the big online service. "It's a big coup for us," says Nadine Smith, Arrangeonline.com CEO. "The demand is clearly there."

Arrangeonline.com raised $9 million in two rounds. Individual investors contributed $3 million in August and $6 million in June. Arrangeonline.com is a unit of Continental Computer Corporation, which makes desktop software for accounting and operations in funeral homes.

These days, many funeral directors are starting their own Web sites, according to Stephen Nimz, the research editor of Mortuary Management magazine. But online funeral planning remains a tough sell and has caused early pioneers to stumble. "I fear we're going to lose most of these guys," Mr. Nimz says. "Unfortunately, the money is just not coming in."

Timothy Hultgren, a second-generation funeral director at Hultgren Funeral Home in Wheaton, Illinois, launched a Web site for his business in 1996. Mr. Hultgren says selling funeral products and services over the Web is inappropriate, because a more "personal touch" is needed. "I actually prefer to do things the old-fashioned way, face-to-face," he says.

In December, Heavenlydoor.com announced it was selling its Internet funeral operations to Remembered-Ones.com. The New York-based company had blown through $22.5 million in 18 months. With the addition of four Heavenlydoor.com employees, the combined company, based in Minneapolis, Minnesota, will have a total of ten employees.

Remembered-Ones.com CEO Michael Wheelock says he plans to build Web sites for funeral directors. He claims his company will build a Web presence for 2,200 funeral directors by the end of this year.

Funeral directors were slow to adopt the Internet, according to Michael Putzel, founder of WebObits.com. Mr. Putzel recalls the chilly reception he received at the National Funeral Directors Association's annual convention in the fall of 1999. Back then, funeral directors showed little interest in his pitch to put them online. Now, according to Mr. Putzel, funeral directors are saying, "This is great; sounds good to me."