Category Archive: 'Subscription Business Model'

Soliciting Voluntary Contributions & Donations for Online Content: 2 Approaches

I don’t like the voluntary contribution model because you never make the money you’re really worth because the vast majority of people won’t pay no matter how much they love you unless they are forced to. (For example, only a tiny percent of regular NPR listeners ever donate a dime.)

That said, voluntary contributions make sense in three areas:

#1. Goal is maximum public reach:
If the primary and overwhelming goal of your organization is to serve/reach as many members of the public as possible, then you can’t slam down a paid barrier. Be honest with yourself and your board of directors about this. You’ve, in effect, decided to become an ad-based or a charitable content publisher, not a paid content business. Your next step should be to hire an ad sales team or a grants officer, because the public’s voluntary contributions probably will not sustain you.

(That said, 3.3 million people subscribe to Consumerreports.org content online, which is a nice fat chunk of the public despite the paywall. It’s a testament to the usefulness of their content, and their marketing skills. The question might be asked of “public” sites that are afraid of losing audience to paywalls, are you actually scared your content isn’t must-view enough to be worth the public’s dime?)

#2. Your intended audience can’t possibly afford you:
In this case, you’d be acting more like a cross between a charity and a non-governmental organization. Your audience is the poor, the needy, the people without the means to pay. Advertisers probably don’t want to pay to reach them. You’re publishing content that helps them in some way, so you need to be supported.

#3. You have no other choice:
You don’t have enough eyeballs to get advertiser traction, and your content isn’t “must view” enough to attract a large enough paying audience that you can afford the (even moderate) marketing and tech work it would take to pop up a paywall. But, a few fans might pay, if you stick out the tip jar. So, what the heck.

If you fall into one of these three categories, I noticed two cute online voluntary payment campaigns today worth trying:

Wikipedia’s new “Quoting a payer” campaign: : Wikipedia’s been soliciting voluntary contributions, with modest success (considering its traffic) for a couple of years now. However today I noticed they’re trying a testimonial spin on it. They place a grey box at the top of an entry page that contains a quote from a previous named donator, saying why he or she gave, along with the amount they gave. For example, I saw a quote from a guy named Don who reportedly gave $200 and said “This is a magnificent service!”

Namaste Direct’s ecard campaign:: Namaste is a microlending non-profit mainly operating in Mexico (yeah, the name confused me too – I assumed it was Nepal.) Although they’re not a content company per se, they’re doing a great job of getting donations for ecard content. They run Google AdWords ads against search terms such as “birthday card”. Although it’s free to send an ecard, there’s such a prominent “donate” button next to the card that I bet many people wind up donating money just like I did. You’re in a giving mood, after all, and it seems appropriate because you just got a good content service – the ecard.

Seen any other examples of effective marketing campaigns for voluntary contributions in exchange for content online? Let me know.

Posted on: 12/09/2009
By: Anne Holland
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Minor Annoyance: Amex Thinks “Publishing” & “Advertising Services” Are Synonymous

When American Express’s merchant account client service rep called to “welcome” us yesterday, he asked, “Do you go to your clients’ offices or do they come to you?”

I was stumped.  In all my years in the publishing industry, I don’t think I’ve ever done either.  “I’m in publishing; we publish reports and then people buy them and read them.  Why would they come to my office?” I asked.   “Oh, the rep answered, “It says here you’re in Advertising Services.”  I am dumbfounded, “Well, change it please!”  Turns out he can’t.  In his database Publishing is the same thing as Advertising Services.

Because I guess there’s just that one business model, right? Yeah, that’s gotta be it.

Posted on: 11/12/2009
By: Anne Holland
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Membergate Sites Doing $70-75 Million Per Year in Subscription Sales

A couple of years ago, when I last checked on Membergate, they claimed their sites were doing about $20-25 million in sales.   CEO Tim Kerber just answered my query saying, “For Oct 08-Sept 09, I would estimate our sites brought in approximately $70-75 million combined revenue. ”

Membergate is ASP, hosted software that “powers” subscription sites, including a content management system, ecommerce system, DRM/security, and subscriber records management.  They currently have about 900 clients using the platform but probably only about 400 of these are selling subscriptions.

Tim noted his clients range from “a number that stall before ever getting launched balanced against some that manage to do a million or more per year.  A far majority of our clients are smaller one-two person operations, many happy to be doing multiple six-figures a year.”

I also emailed over to SubHub CEO Miles Galliford to see how much his clients are making (they provide a similar service to Membergate’s).  He replied, “It is difficult to know all the revenues across all of our clients sites as many of them take payments via PayPal Standard which happens off site.  However taking the sites where we can measure subscriptions and estimating the ones where we can only track the number of members (not revenues) I would say the figure is around £5 million ($8m). In addition we have 20 B2B sites which invoice clients and take payments offline.  I would guess that they would add a further £500k – £750k so a good estimate would be £5.6m/$9m.”

Although the industry analysts at places like Forrester and VSS primarily focus on the mega sites — especially those published by public companies — I’m very drawn to this other world.  The people who are making six figures to maybe a few million a year.  There are far more of these sites out there than I think analysts realize exist.   These are sites like http://www.BouncyCastleOwner.com

How can you not love that?  It’s niche publishing coming alive again… and making respectable income for hundreds, if not thousands of people.   In a world where more professional journalists every day get thrown out of jobs, we need a flourishing niche publishing industry. It’s why I started this blog!

Posted on: 10/30/2009
By: Anne Holland
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