A Way For Newspapers and Online Subscription Businesses To Make Money Online?

July 26, 2009 | By Marc Porcelli | 1 Comment »

If you are like me, you read a lot of your news content online or through your Blackberry or iPhone. I subscribed to The Washington Post while studying at American University in Washington, DC. By the time I hit my second year, I was reading the paper online. It was not necessarily a cost issue; it was was simply more convenient. I also did not have to worry about taking out heavy piles of newspapers that seemed to constantly be piling up.

When I moved back to Toronto, initially I subscribed to The Toronto Star. Like in DC, after a year or so, I stopped. Since then, I have subscribed to only one form of print news – the Harvard Business Review. I also from time to time pick up the Economist at the airport and Foreign Affairs if my flight is over two or three hours.

I consider myself a bit of a news junkie; I frequent sites such as CNN, The New York Times, The Washington Post, The Wall Street Journal, The Globe & Mail and The Toronto Star. If I had to pay for my news on these sites, likely I would for a few of them. After all, I enjoy the content.

Given that it is a well-known fact that subscription rates have been dropping for some time in print periodicals, just how can they sustain to provide us with this compelling content? There has been much talk in the last few years about this very topic, increasingly in the past several months. Perhaps publishers should, “Monetize The Audience, Not The Content” as Fred Wilson points out. Mr. Wilson maintains a blog, avc.com and is himself a VC serving as a Managing Partner of two venture capital firms, Flatiron Partners and Union Square Ventures.

Mr. Wilson points out in this particular post that The Financial Times (and their website FT.com) have incorporated a model in which, “You can visit the ft.com domain something like nine times per month for free. They cookie you and when you stop by the tenth time in a month, they ask you to pay. And many do.” What a great model! This way you get a certain amount of content for free, when you keep coming back a certain amount of times, in this case ten or so, then you are asked to pay. This sounds pretty fair to me, and more importantly, is a sustainable concept serving multiple purposes. This is also an excellent method to encourage users to convert.

As a big fan of the freemium model, this expands on many current and existing models. Existing models such as those used by Classmates.com, MyLife.com and even my former employer Singlesnet.com. Mr. Wilson points out, “The best freemium models allow anyone to use the service for free and then convert the most serious/frequent/power users to paying customers.” All three of these sites have something in common in that their users are allowed basic functionality or free site usage. These free users are then (or hopefully so) up-sold based on the notion of increased functionality and access that facilitates a higher level of engagement and communication with other users.

Perhaps we will see more sites follow the FT.com model. Users could interact with a few of a given sites premium (paying) members in a given amount of time that given their “free” status they would normally not be allowed to do. After a certain amount of interactions, a user would then need to pay – similar to the tenth article ides that FT.com has incorporated. Once converted, the user would then be enrolled in a continuity program.

In theory, if you give users the opportunity to interact with your product, without forcing the initial sale before the interaction(s) has occurred, you give your service potentially a highly chance of success. This is a very interesting concept that could be incorporated into many current online subscription services.

For now, I will keep reading my articles for free online ready to pay when asked to. By the way, most articles are not free on the Wall Street Journal online so I read the “free” versions on my Blackberry WSJ application.

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1 Comment »

Comment by Marc Porcelli
2009-07-27 13:58:06

Today the Financial Post stated their operating profit shrank 40% from last year. Related to the article, paying subscriptions are up 18% to 117,000 and online now makes up 67 percent of the FT Group revenue.

More information can be found here, http://paidcontent.org/article/419-earnings-ft-profits-hit-by-ad-downturn-online-subs-up/

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