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March 27 2003
Publisher's Note: “Making the Connection: Paid Online Content and Email”
I've spent most of my career to date in the print/online publishing industry, so I'm an avid follower of any news about paid online content. As I'm sure you know, when the World Wide Web was born most content online was free. The prevalent revenue model was based on sales of advertising and ancillary products.
I actually worked for a business-to-business publisher who launched a free consumer website and planned to cover its costs with mug and pen sales. Needless to say, this model was never profitable. Looking back it seems so obvious that it wouldn't work, but at the time everyone was doing it.
Finally, almost 10 years after the advent of the World Wide Web which gave a graphical interface to the Internet, the tide is turning. According to a recent study by the Online Publishers Association, 10% of online Internet users in the U.S. are regularly paying for online content and paid content revenues grew nearly 100% for the second year in a row.
So what does this have to do with e-mail?
In my mind, lots.
I've always believed that Email and Online (Internet, the World Wide Web, proprietary online systems) are just alternative delivery mechanisms for content. They offer some opportunities that print doesn't (hyperlinks and search are just two examples) which you want to leverage to the fullest, but in the end it's really all about the content. If the content is valuable enough to the individual and difficult to get for free, they'll pay for it.
Email is my vehicle of preference primarily because it's push technology -- it allows us to push the content directly to the reader rather than having them have to go look for it. It's the same reason that newspapers and magazines offer subscriptions that they mail to your house -- they don't want you to have to remember to look for their publications in order to purchase and read them.
I have a consulting client who publishes two paid electronic newsletters -- one weekly, one monthly. Subscribers pay roughly $60 and $300 a year respectively. One is an HTML/text e-mail, the other is provided in a PDF format. This is just one of many examples of a successful paid content enterprise using e-mail. The value is in the aggregation of information and the niche content that's difficult to find elsewhere.
Marketers take note: This client's weekly e-mail started out as a marketing vehicle for the monthly and another product they offer; it became so popular and so valuable to the audience that they transitioned it to a paid publication -- and created an additional revenue stream for their organization (and they still use it to sell other products to readers!).
Back in the late 1990's I launched an electronic publication about trading stock options for a business-to-consumer publisher. We charged more than $1,000 a year for a website with some analytical data and, the focus of the service, e-mail alerts with buy/sell recommendations. This was back in the heyday of 'People won't pay for information online' -- but they did. We reached our one year revenue goal in three months. Again, the primary value was in the specialized content, with some secondary value there as a result of hyperlinks to analysis.
Another recent study on online content was done by Jupiter Research, this time focusing on European Paid Content and Services Forecasts for 2002-2007. They're also predicting a surge, showing that it's not just Americans who are becoming more inclined to pay for information online.
Bottom line? Email isn't just a marketing tool -- it can also be used as a channel to distribute valuable content to paying subscribers. Something to think about as you move forward with your e-mail initiatives and look for new revenue streams.
Toward that end, here are some additional resources if you'd like to join me in following paid content trends:
ContentBiz.com -- a Marketing Sherpa publication for online publishers; they also do a great conference every May in NYC about selling subscriptions to online content.
PaidContent.org -- I believe they are based in Europe; their e-mail newsletters and website provide good coverage of paid content news; they also do conferences.
Vin Crosbie's ClickZ Column -- A pioneer in this area, his articles feature links to recent studies and research as well as his own views on what's working -- and what's not -- in paid content.
Thanks for reading! I'd love to hear what you have to say. Feel free to contact me with any thoughts or questions about this article.
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