This post is part of the Friday Q&A section. If you want to ask a question just send it via the contact form.
Edgar asks:
Can you talk about paid subscriptions? Do you own any membership sites? I had my boxing website for several years with lots of readers, and just now I have decided to convert it to a paid subscription site. I going to charge $5.95 a month and wanted any tips you suggestions before I go live.
I do own a couple of membership sites, but they don’t use a monthly subscription model. Instead they have a fixed fee that members must pay to join, and after that they receive lifetime access to all the content. I’ll explain why I use this model below.
First of all I don’t like the idea of putting a whole website behind a pay wall. For example, I could make all the content on Daily Blog Tips private, and charge $2 monthly for people who wanted to access it. I don’t like this model first and foremost because it makes the website less useful and lot more selfish. Sharing what you know free of charge is a great thing to do, and if other people didn’t do this extensively in the past we wouldn’t have the open source movement of the Internet as we know it. Even if you are just concerned with your own gains, though, putting the whole website behind a pay wall is probably not the wisest of the business models. Giving away free content and information allows you to attract search engine traffic and readers, which you’ll be able to leverage to launch other products/projects.
A more viable model is to have a lot of content freely available, and then to launch a premium section of your website where readers need to pay to get access. In order to make this model work you need to ensure you have a big enough audience before launching your premium section (e.g., 100,000 monthly uniques or 10,000 subscribers), and you also need to make sure your audience will get value from your premium section. One way to do this is to create a learning environment. If you have a photography blog, for example, you could launch a premium section with advanced tutorials, or even with a complete photography course.
For content based membership sites, however, I don’t think the monthly subscription model is optimal. You could make it work by keeping the site updated with new content every month, but that takes a heck lot of work, and the value that members get will diminish over time anyway. A better model in my opinion is to charge a one-time fee (breaking it up in small installments if you want).
If you want a real subscription model (i.e., one where your clients keep paying you month after month), you need to have a slightly different approach. You can make it based on content, but your content must be time-relevant. That is, your members must gain benefit from accessing your content exactly on the time you release it, and after a while (days or weeks) the content loses its value. One example of this model are stock alerts. There are many websites where you can subscribe to receive daily or weekly alerts about what stocks you should buy and/or sell. This type of content works perfectly with a subscription model because the member has the incentive to keep paying month after month, as long as the alerts are actually helping him make money.
Another way to structure a real subscription based website is to offer a service. Email marketing providers, for example, charge a monthly subscription because you use their services on a ongoing basis.
So yeah I think subscription based business models are solid, but you need to have the right product/service and the right structure in place to pull it off.
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