Online Subscription Model? Think MLB not ESPN.

Let’s face it, signing up online for anything, especially when you have to pay a fee, is a complete hassle. But now, more and more content based sites are either starting to charge subscriptions fees, or are considering it.

So let’s recap: We all know that the Wall Street Journal and Financial Times have been doing it for quite a while, and have moderate success in the process. Newsday recently went this route as well, spent 4 million to re-develop their site with the subscription model in place, and have gotten a TON in return. A ton of crap. From people complaining about the actual design, to the paltry financial returns, which are coming in at a few thousand thus far, they are suffering from that thing called hind sight.*

The NY Times also went the pay route, and it flopped…and they are now considering it again with a more “metered approach,” in hopes that this approach works, and frankly saves them from going out of business. (The metered approach is essentially to charge people based on the frequency by which they use the site).

So listen, it is completely understandable WHY these companies are going this route from a financial perspective. And even philosophically, it makes sense, considering you have had to pay to read the columnists and their content for years through the newspaper. But the question comes down to HOW are they going to do it without cannibalizing their audience or compromising their brand, and make this a financially rewarding experience in the process.

I disagree with people saying that online subscriptions can’t work. I think that is incredibly short sighted. I was in a focus group in LA years ago for satellite radio. And I was the most outspoken in the group saying I would never pay for radio, considering it is one of the only things that’s still free. And now look at me. I can’t live without Sirius radio. Point is, I can still listen to free radio…but have found that pay radio is just so much better, and it’s because it caters to niche audiences. And to Alan Murray, executive editor of the Wall St Journal, that is one of the most important elements of charging online. He does it for financial information, but there is no reason you can’t do it for other offerings as well.

I think the main issue here is that there isn’t a whole lot of creativity going into this decision. These publications are basically saying, today, let’s make articles x,y and z free. And then the tomorrow, let’s charge for articles x, y and z. These days users are calling the shots. So if that’s the case, you’re going to have to start create more compelling content that users want, even need, and can’t get elsewhere. So we have broken down a few steps some publications should consider while making these changes. And by the way, there certainly have been a ton of articles written on this. One of the best pieces is an interview with Alan Murray. I saw this a while ago and it stuck with me. I guess because it make so much freaking sense.

Here are a few suggestions:

1. Be fiscally responsible in the planning stages. This seems really damn obvious, but paying 4 million dollars like Newsday did is a pretty good example of my point. It opens them up to even more criticism, and by the way, cost them 4 million dollars. I have seen several tweets and blog comments specifically on the design shortcomings. And that happens even more so, because you spent 4 million freaking dollars! While I’d love to see how that web development company justified that robbery, there are several very competent web development companies all over the country that can put together a subscription model for a much more reasonable rate. Do a little research.
2. Get the writers on board. After all, that’s one of the reason people are reading. If they’re running their own blogs, for free, and writing for several other outlets, for free, then you're losing some serious leverage. I’m not saying you can force them to only write for you, but at least if you know that the content being covered on your site is unique and not ubiquitous, that’s a good start.
3. Give subscribers something beyond the pay wall that they can’t get otherwise. Things that are not even offered in your paper or your magazine. And actually, things that are not offered in other papers, magazines or websites. Give people specific content, through videos, podcasts and good old fashioned editorial that they cannot get anywhere else. Give them behind the scenes of a fashion show, or an after party from an art opening. Things that no one but your organization may have access to, or can provide a specific perspective on. This is creating niche content only found beyond your pay wall. This is why MLB TV is so great. They have protected their content forever, and now it’s paying off. You can’t get those games and that coverage elsewhere, so if you want it, you need to pay for it. And this is why ESPN Insider is really not that special. Their writers frankly are not really that special. And their “inside scoop” is being dealt by others as well.
4. Be committed. Once you make your decision, go strong to the hole. It absolutely will not be popular. But if you have done everything properly as stated above, over time, people will pay for online content just like I pay for Sirius Radio.

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*This number is distorted though, considering that if you already have a subscription to their paper or the cable network owned by the Dolans, then you don’t have to pay.