SCRIBES MEET: Washington's Hyatt Regency Hotel is hosting some 350 newsletter respresentatives thru tonight at the 1980 INTERNATIONAL NEWSLETTER CONFERENCE --"the biggest in history," according to executive director Frederick d. Goss of the NEWSLETTER ASSOCIATION OF AMERICA INC.

SCOPE: The three-day talkfest brought delegates from at least half a dozen countries to discuss topics ranging from promotion strategies to new technology -- all very brass-tacks, no-nonsense stuff. That's the name of the game in the newsletter business, from Oil Spill Intelligence Report to Real Estate Tax Digest.

For a brass-tacks industry, hard figures are hard to get, but the NAA's 450 members publish some 1,000 newsletters, mostly in the United States and Canada. "It's at least a $1-billion-a-year business," according to outgoing NAA president Shirley Alexander.

Somewhere between one-fourth and three-fourths of the delegates could have come to the international convention by subway or bus. Many could have strolled over from their offices a dozen blocks away in the National Press Building, a rabbit warren of newsletters.

Diversity of newsletters (which may deal with anything complicated and interesting but too specialized for mass circulation) is reflected in titles: National Mall Monitor (for people who run malls); High Voltage Maintenance; Public Broadcasting Report; Day Care and Child Development Reports; The Editorial Eye (for editors); World Environment Report; First Class (on first-class travel and, in general, living on a first-class level). Even a newsletter about newsletters called Hotline, published by the NAA, which has offices in the building.

Site of the meeting underlines the point that Washington has become a world capital of newsletter publishing -- second perhaps to New York, but nobody is sure; it's still a very decentralized business -- but probably not for long (see TREND below).

Washington newsletters tend to focus on government. Some agencies are covered by two or three competing newsletters," says Goss. "We tell you what government is going to do for you and to you," says self-made newsletter mogul Ken Callaway (see PROFILE below).

WHAT IS A NEWSLETTER? Newsletters date back historically a lot farther than newspapers, which were not developed until the meeting of mass literacy and high-speed print technology made them possible. Handwritten circular letters, designed for a small, specialized readership, pre-date printing.

The key point is relatively small target audience. Newsletters represented at the meeting had circulations ranging from about 50 to more than 400,000. (Theere are two types of newsletter now: professional, with small circulation; and consumer, with bigger figures.)

In the traditional newsletter, low circulation meshes with a relatively high subscription cost to spell out big bucks for small volume. An example is Access Report/Freedom of Information, which costs $169 per year (by no means an extreme figure) for 8 to 10 pages biweekly on the Freedom of Information Act. It has more than 700 subscribers. Newsletters respresented at the meeting ranged in circulation from about 50 to over 400,000.

High cost to subscribers is offset by several factors:

1. Newsletters contain inside information, usually not available or interesting to mass readership. If you regularly learn things that are of intense interest to only 700 people, and you have the names and addresses of those 700, you have the basic ingredients for a newsletter.

2. Newsletter costs are usually taxdeductible as business expenses.

3. Subcribing to newsletters is a mark of status and index of identity -- a lot cheaper than buying a Mercedes. The newsletter subscription makes you an instant insider. "It's great," says president Alexander, "to be able to go to a conference and say, 'Did you see the report in this newsletter?"

WHO BUYS THEM? According to Alexander, a good newsletter's subscription list "tends to read like a 'who's Who' of a particular industry . . . or who is going to be who. Younger subscribers tend to change their jobs and addresses quite a lot -- but they keep their subscriptions."

PROFILE: Ken Callaway, chairman of Capitol Publications, began his first newsletter with $750, and now owns 33 newsletters which he says are grossing $5 million to $6 million per year. He's been in the business about 15 years. "I wanted to be in business for myself," Callaway recalls, "and the only business I knew that I could start with $750 was newsletters.

"The War on Poverty was just beginining and there was more money going around than you could shake a stick at, and the agencies were all screwed up -- ideal circumstances to start a newsletter."

Callaway, like most successful newsletter entrepreneurs, saw a gap between essential information and the people who could benefit from it -- in this case, anti-poverty agencies and those who worked with them. One early step was to get a list.

"I remember," he says, "at the beginning the OEO wouldn't give me a list list of anti-poverty agencies. I had to date a secretary three times to get that list -- but I would have dated her just for the fun of it, anyway."

At the beginning, says Callaway, "I didn't quit my job, but I hired people. I went back to my old dorm at George Washington University and I told them, 'I have jobs for you. We'll give you $1 an hour and all the free beer you can drink.' The beer is something I've never gotten away from. I now have 70 employes working on 33 newsletters, and they get a lot more than $1 an hour. But I have a Heineken tap in my office."

TEND: Newsletters have been traditionally a sort of cottage industry -- something you could start all by yourself on your kitchen table -- but the picture is rapidly changing, according to industry insiders. Big publishers and conglomerates are buying up newsletters or starting their own.

The next big trend looks like the electronic newsletter, which will pump the crisp, no-nonsense, bottomline material directly into the subscriber's computer, and will require heavy capital investment. Some publishers have already gone this route and others are plunging rapidly, including incoming NAA president Ray Henry, whose Washington-based Plus Publications includes 21 newsletters, a variety of other information services and specialized seminars.

"Once you have the specialized information, there are many different ways you can package it," says Henry. "We're getting into electronic publishing -- a newsletter in your computer terminal. The technology has been available for a long time, but we needed people who had the facility to receive it that way. The gap has been a hardware marketing gap."

Maybe a financial gap, too. Escalating costs and the increasing complexity of the business, the need for expertise in such specialties as promotion, handling renewals and the rental and use of mailing lists are squeezing the small operator and leading to conglomeration. Henry expects to see newsletter mergers as a major trend of the 1980s.

"A lot of our members don't like that old image of starting a newsletter on a kitchen table," says Henry, who started his on a kitchen table nine years ago. "This business is becoming more and more sophisticated, more and more professional."