Subscribers:
Pay a Fee
or Get It Free?
A lot of new website owners add subscriber revenues to their calculations when figuring their break-even date and potential for profit. Not a good idea. Subscriber sites are fast disappearing from the webscape and for good reason. Why pay when you can get it for free?
As a site owner with expertise for which others would pay to read, it’s hard not to think about subscription revenue but the plain fact is, online subscriptions have never really taken off the way we all thought they would. The New York Times went the subscription route with its Times Select but it wasn’t generating enough revenue to justify itself, so the critical features of the NYTs are now available free online.
Even Rupert Murdoch, the much-maligned media mogul, who just bought control of the Wall Street Journal is planning to give away fresh content on the WSJ website. Every day. And that’s one mogul who knows how to make money through advertising!
What happened?
Does anyone remember 2002? Seems so long ago. 2002 is antediluvian in web years. That was a long time ago. But back then, the web had grown substantially with the advent of the search engine in 1994 (along with numerous, subsequent refinements to search engine technology), and media outlets, big and small, saw dollar signs – a whole new revenue stream.
However, in 2002, in the wake of the dot.bomb debacle, online ad revenues took a major nose dive that digital marketers are still trying to overcome. The online subscription revenue model never really took off and, today, even the big players are leaving the field.
The reasons are pretty obvious. First, the web provides so much content from so many varied sources, you don’t have to pay a subscription for the latest in gold futures. Some site is giving it away. Second, add to this the development of RSS technology – the ability of individual web users to gather news and other content of interest with 100% customization, and it becomes pretty obvious why subscriber sites aren’t doing so well.
There are other reasons people give for staying clear of subscriber sites. They’ve been scammed before by another e-book download with nothing to say. They don’t want to give you their credit card number. You use a high-pressure sales approach making untested claims, predictions and guarantees. They figure you’ll sell their contact information and they’ll be bombarded with spam. An online subscription is a tough sell, so what’s the small, self-published guru to do about that $49-a-year online newsletter that subscribers delete without opening after a week or two?
What to do?
Change your revenue model. Change your website. Change your bottom line for the better.
It starts by changing your view of site content. Owners of subscriber-based websites depend on readers’ “need to know” – whether it’s a professional financial advisory, a “top secret” stock report, or the latest news on what’s happening in
Useful information is information that works to the benefit of the reader. It could be a self-help website with a monthly affirmation newsletter, or a pet owner site that sends you weekly tips to keep your kitty happy and healthy. If the content is actually useful a subscriber site might survive – until some other visionary comes along and starts giving away the information you’re selling.
Change your view of content. Don’t think of content as something to be sold. Give it away. Use it to entice readers to visit your site often. Daily, perhaps. Now, no doubt, there are a lot of entrepreneurs shaking their heads as they read this. These are people who have spent years learning their industry, a new system to win at poker or how to use hedge funds to fast-track your retirement years. They have knowledge.
However, others have that knowledge, too. And if web users can find that information free, they sure enough aren’t going to pay you for the same thing. So, instead of thinking of content as something to sell, think of it as bait to attract regular readers and improve links popularity.
So how do I make money with this new revenue model of which you speak?
Indeed, web-based ad revenues did decrease for a short time in ’02. But since then, there’s been a marked increase in revenue growth, closing in on $2 billion in ’07 and projected to exceed $11 billion in just five years. The web has become one of the most potent marketing tools available to advertisers.
You can pick up some of that ad revenue using the content you once sold to draw in the traffic and keep your PR high, with ad revenues to match. You can also develop affiliate partnerships with companies that want to reach your target market.
Here’s how the numbers break out. In the summer of ’06, survey respondents were asked if they would rather receive free content with advertising or paid content with no advertising. More than 70% of those surveyed opted for free with advertising. And that’s why you see ads for Coke before a music video download on AOL. AOL is giving away the content and making its money on that 15 second Coke ad. Even so, 78% of Millenials (ages 13 – 24) found web ads more intrusive. Clearly, they want the content free – free of cost and free of advertising.
e-Marketer analyst, Lisa Phillips, recently stated, “Advertisers pay up to three times more to reach print readers than online users. They’re not convinced online readers browse a news web site the way they believe print readers still browse through an entire section of a newspaper.”
Excellent point and one that clearly demonstrates why print media is so heavy on advertising and light on content. All you have to do is check today’s newspaper if you want proof.
Time for a change
If you have a successful, subscriber site – congratulations. You must have something very interesting or useful to say to your subscribers. However, if you’ve seen your subscriber list dwindle and re-ups shrink, it’s time to change your business model and use that subscriber content as the lure.
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