Over 10 years ago, Kevin Kelly wrote the famous essay 1,000 True Fans which argued that all you needed is 1,000 people to pay you a little money each year to be successful.
Since writing that essay it has become more and more commonplace to charge money for content on a recurring basis, and I think it’s only going to become more standard.
My evidence for this is mostly anecdotal, but I have multiple “mainstream” friends that now pay for a New York Times subscription, as well as a few friends that pay for The Athletic, a completely hard paywalled publication.
We see subscriptions working very well for big businesses (New York Times, Wall Street Journal, etc) but I think it can work even better for small businesses and small teams
Why? Because the economics work even better. You don’t need to find thousands of paying subscribers. If you charge enough ($10-100/month), all you need is a few hundred and you would have a sustainable business.
Here at Starter Story, we’ve been experimenting with a subscription model, so I figured I would share some of my research and what seems to be working for other businesses.
Here are some of the different approaches to the subscription model for blogs, publications, and content creators.
The Hard Paywall
The “hard paywall” means you need to subscribe and/or pay to read anything.
I asked my “normal” friend why he pays for The Athletic. His response:
The Athletic gives me exclusive access to all the beat writers for San Francisco sports teams. For example, one writer only writes about the 49ers, including all of the rumors and trades - not even ESPN has this level of in-depth coverage.
The Athletic is fairly cheap, apparently their retention of yearly customers is 80%!
Hard paywall in the B2B space
Another example of a successful hard paywall is Innovation Leader.
They provide content that helps professionals inside large companies innovate (i.e. someone starting a new initiative or change in culture).
On the low-end, they’re charging $695/year:
Innovation Leader membership pricing
I can’t find revenue numbers, but according to this interview with the founder, they have 10 employees and have been around since 2013.
How to make it work with a hard paywall, my take:
- Write content that doesn’t exist anywhere else.
- Have at least one thing that readers couldn’t live without - as long as it has one thing you can’t live without, customers will keep paying for it.
- Needs strong word of mouth and high retention of subscribers.
- Figure out a way to get people to “find” your thing since you can’t rely on social or Google traffic - may need to do sales or in-person events
The Metered Paywall
The metered paywall is when the publication limits the number of articles you can read each month.
New York Times metered paywall
The elephant in the room is the New York Times, who pioneered the meter model.
However, you will see subscriptions working across the board:
- Pre COVID-19, the New York Times subscription revenue was $400M+/year with 3.5M subscribers, and apparently they hit 6M subscribers after the pandemic
- Wall Street Journal just crossed 2 million subscribers
- Bleacher Report will hit $200M in subscription revenue in 2020
A smaller, local example
The metered paywall also works for smaller, niche blogs and publications.
For example, Austin Monitor implemented a metered paywall and was able to grow to over 1,000 paying readers.
If the average reader was on the $20/month plan, that would put subscription revenue at $20k/month - and that was way back in 2016!
For a local news website, that’s extremely impressive.
For this local example, their membership costs are also on the higher end:
How to make it work with a metered paywall, my take:
- Loyal audience (high retention)
- Your content must be differentiated from other sources (opinion, research-based)
- Since you still allow the majority to read for free, you can combine the membership with other revenue sources, such as ads, sponsorships, and even premium content
How about keeping all the content free, but consistently upselling a premium newsletter to all readers?
They offer a special newsletter “The Stock Advisor” that helps you pick out the best stocks.
The Stock Advisor costs $99/year and is aggressively marketed across the website.
Motley Fool is estimated to be doing $8.3M/year (although I suspect more) and has over 400 employees.
“Supporting the cause”
What if people want to subscribe because they believe in the mission?
I asked my best friend why he pays for the New York Times subscription, his answer:
I wanted to support independent journalism. Early on with Coronavirus I was consuming a lot of content, and hit the paywall pretty often. They offer huge discounts (75% off) for the initial year.
While providing pure value probably returns the highest profits, there is certainly a donation/support model that is working.
The Guardian runs on a support model, and they broke even last year.
As you can see, their message does a good job at emotionally reaching the end-user.
Another way to drive subscription revenue is to provide premium and/or behind-the-scenes content.
This is similar to the “supporting the cause” approach but provides more value to the reader.
For example, Slate produced a members-only interactive graphic that complemented their podcast The History of Slavery in America.
According to this case study, this became a very popular article, and “Slate’s monthly membership increased by 110 % compared to the four months prior.”
Another great example is providing behind-the-scenes content through Patreon.
They provide behind the scenes content and bonus episodes:
Offering different price tiers is an effective approach in “upselling” the product and providing new and exciting value for the end-user.
Although this is not subscription revenue, I figured it’s worth mentioning.
Backlinko, a blog about SEO, draws 1.1M visitors per month.
However, they make 100% of their revenue on courses, with some single-course launches doing $800K+ in revenue alone:
From growing our audience and creating better products, our launches have grown quite a bit. Our first launch did around $80k. We’ve since had multiple that’s done 10x that.
Their courses are not even mentioned on their website, which leads me to believe most of that marketing is done through the email list.
I hope those examples showed you what’s possible.
If you’re interested in starting subscription content business or adding this business model to your own, here are some of my takeaways:
1 - You don’t have to change your entire model.
Your mileage may vary - the subscription model is very new and every business is different.
Nearly all of the businesses mentioned in this article have multiple streams of income - they are diversified with ads, sponsorships, metered paywalls, premium content, etc.
You don’t need to move to a hard paywall tomorrow - you can experiment with all of these to verify if subscriptions work at all.
Focus on technology, move quickly and experiment, including aggressive A/B testing.
2 - Excellent quality content/journalism is the key to growth.
Although many of these business models can be exciting, it will not be sustainable without high-quality content.
According to the Guardian:
We know that when we have these mega news stories, stories that drive a lot of interest to all media, like the Brexit referendum or the large exclusives we have such as our story around Facebook and Cambridge Analytica, those are always real moments where we expect and hope to see more people coming on board,” he said. “That has proven to be the case the last two or three years.”
3 - Focus on sales, trials & limited offers
Offer sales, discount codes, lifetime accounts, free trials, and more - use the same tactics that you see working for e-commerce, courses, and SaaS businesses.
“I have people on staff whose entire job is to manage an ongoing slate of exciting sales,” Campbell said. “And it really matters.”
“For me, as a marketer, what matters is giving readers a great introductory offer that removes the stress of subscribing.” Campbell said that Tribune’s “ardent cycle of campaigns” has changed the game, increasing the company’s results from 1,000 to 3,000 starts per week over time.”
Mark Campbell, Tribune’s SVP of Digital Marketing (source)
4 - Subscription models need to come from the top
Because a subscription model directly competes with the advertising model, the company needs to be aligned and confident that the subscription will work, and be committed to trying it out for a long enough period of time.
5 - Respond & adapt to what readers want
It sounds simple, but it’s often neglected. Talk to readers and find out what they want.
Also, continuously adapt to current events and what everyone is talking about, it’s essential to be on the cutting edge.
“We did nothing different the day after the election but we saw a huge surge in sign-ups. Then we customized our messaging to say we’re going to hold the administration accountable, and we saw another surge. We’re just responding to the data about what readers want.”
Brendan O’Grady, Communications Director for The Guardian (source)
6 - Make your content the product
While selling additional premium content or behind-the-scenes may be interesting to 1% of your readers, think about how you can sell something that is interesting to 100% of your readers.
This is the idea behind the metered paywall or the hard paywall.
Personally, my favorite business model for content is still the Key Values model. It's free for readers, but instead of slapping ads on her content, the content itself is the ad. This puts everything into alignment, similar to Google ads. They match reader intent. Otherwise, readers are annoyed by your ads and so are you as the creator, because they're a distraction from your primary content rather than being your primary content. If I had to monetize IH, I would almost certainly start by exploring how to make this business model possible.
The question to ask yourself: How can your primary content also be your moneymaker?