Tags containing: "subscription models"

CBS Interactive Advanced Media has tapped into a market ripe for reinvention: the home video fitness industry–though “home” might be a misnomer given the fact that mobile increasingly dominates video and consumption. CBSi Advanced Media just debuted TrainerPass, which features hundreds of workouts from fitness pros, which is offering via website access and on iOS and Android Apps.

“It’s an interesting time for fitness,” says David Katz, Vice President and General Manager of CBS Interactive Advanced Media. “Home fitness was dominated by a huge DVD market for a time, but that’s fading away and nothing has replaced it.” Though there have certainly been web-based forays into this market, Katz feels confident that TrainerPass is the first to aggregate such a large variety of trainers’ content in one place.

According to Katz, cross-platform delivery was a given because of the way mobile has effected users’ behaviors and expectations of anytime anywhere content access. He points out that users won’t just want to access content from home or hotel room — certain types of technique-oriented content, for example, may prompt them to review a short video at the gym or before heading out on a bike ride.

Another distinctive aspect of TrainerPass is that it highlights interaction. Features include direct messaging that trainers can use to react quickly and respond to user needs and requests. While not every trainer who has signed on will feel that audience interaction is essential to their content offering, Katz looks forward to seeing how the opportunity to connect with audiences impacts different trainers’ engagement level and popularity. “It’s quite possible that one who hustles and listens and hears their fans and delivers what they want may even be more successful than better known trainers who aren’t as engaged.”

And while CBSi Advanced Media is enthusiastic about any trainer bringing their own audience to the platform, Katz is confident that, given his company’s reach as the eighth most trafficked brand online, they will be able to deliver significant audiences to all those participating. He notes that creating an offering like this one under the larger CBS umbrella has the added advantage of allowing him to “leverage all of the great technology, learning and experience that happens within this company all of the time across our disparate sites and services from CNET to CBS’ College Sports Live to CBS All Access.”

One key component of this is in helping to develop a business model around a specific content vertical. TrainerPass offers two types of memberships so subscribers can sample a variety of workouts across disciplines or dive deeper into the complete workout libraries of individual trainers. The FlexPass subscription ($4.99 per month) features access to more than 100 videos from multiple celebrity trainers and workout programs, including yoga, Pilates, kickboxing, boot camp and barre, allowing users to discover the program that fits them best. The Trainer’s Pass subscription (starting at $6.99 per month) offers complete access to a specific trainer’s workout library, as well as nutrition tips and more.

TrainerPass, which is built on CBS Interactive Advanced Media’s suite of digital product offerings, gives trainers the flexibility to manage their content and subscription pricing and interact with their followers through videos, blog posts, and social media integration. Trainers can continuously add new content to their libraries to help followers keep their workout routines fresh—all with the support of CBSi’s customer services team.

Katz foresees the TrainerPass model being emulated for a variety of different verticals. Next up: identifying areas that “may or may not have an existing audience, whose business model has been disrupted or in which there’s not yet a fully-developed digital business model” and then leveraging the technological and publishing acumen at CBSi to create new interest-based offerings that meet the needs of consumers and foster the growth of the digital content marketplace.

Industry-Research

Americans say free, ad-supported online services worth $1,200 a year

May 13, 2016 Research Team—DCN

Americans assigned a value of nearly $1,200 per year to the array of free, ad-supported services and content currently available to them online, according to a survey conducted by Zogby Analytics. Unsurprisingly, the majority (more than 85%) prefer an ad-supported internet model instead of paying for online content, and three-quarters said they would reduce their online activities “a great deal” if they had to pay for those services and content. At the same time, almost as many say (72.8%) that free internet content such as news, weather, email and blogs is very important.

Commissioned by the Digital Advertising Alliance (DAA), the Zogby Analytics poll of 1,004 adults sought to better understand the aggregate value that Americans perceive in the major types of services and content made available free to consumers because of advertising. Respondents were asked to estimate how much people would have to pay for 17 different types of online services and content, ranging from e-mail to video and weather, if they were offered only on a subscription basis rather than for free with ads.

Among the survey’s key findings:

Consumers assigned an aggregate value of $99.77 per month to a package of 17 major types of ad-supported services and content.
Eighty% of respondents said they had found ads useful in finding new products, researching a purchase, or assisting with the shopping process.
The types of advertising that consumers had found most useful were movies/TV shows (43%), technology/devices (37%), clothing (36%), local restaurants (34%), groceries (33%), phone/internet services (32%), and travel (30%).

Zogby Analytics was commissioned by Digital Advertising Alliance to conduct an online survey of 1004 adults in the US. The survey was conducted from April 19-20, 2016. Based on a confidence interval of 95%, the margin of error is +/- 3.2%age points.

Innovation | Perspectives

The future of media depends on great consumer experiences

February 8, 2016 DCN

With audiences widely dispersed among mobile and social apps – and, soon, virtual reality and augmented reality experiences– publishers who want to thrive must both follow consumers where they want to go and meet them on their own terms.

These were a couple of the themes that emerged from the wide-ranging conversations at Digital Content Next’s annual members-only Summit 2016 in Miami. DCN members met to explore content and business models given that consumption patterns are constantly changing, many consumers are actively avoiding advertising, and digital intermediaries are extracting much of the value out of the publishing economy. Speakers and attendees talked about changing their relationship with programmatic ad marketplaces, seeking alternative sources of revenue from subscriptions and memberships, and aggressively pursuing revenue diversification.

In his opening remarks, DCN CEO Jason Kint noted that although the Interactive Advertising Bureau recently celebrated the milestone of $50 billion in revenue generated by online advertising, more than 50% of the revenue currently goes to two companies: Google and Facebook, with premium publishers collectively garnering about 15%.

“Most of the money doesn’t actually get into your pocket to pay for the professional content, the entertainment and journalism you all do,” Kint said. DCN’s mission is “to make sure the next $50 billion is different.”

Premium publishers need to build on the trust and reputation they enjoy, rather than fighting with consumers over their use of ad blockers, Kint said, pointing out that a blockers are a symptom of consumer dissatisfaction. Smart publishers need to look at the opportunity “in the growth of this audience that is looking for content on new terms.”

“It’s a symptom of a bad user experience – users taking action on their own,” agreed Justen Fox, senior product manager for revenue products at Vox Media. Consumers are weary of pop-up and pop-under ads, not to mention advertising that contains malware. He finds that the use of ad blockers is higher with social and referral traffic, undermining audience acquisition, and said it’s also higher with returning visitors to Vox’s websites. If publishers and advertisers fail to clean up their act, the problem will keep getting worse, he said.

“Focusing on the user experience is actually the long-term solution,” Fox said. However, no publisher can do it alone because consumer impressions are formed by the experience they get across all media sites.

Sarah Frank, executive producer of Now This News, said that killing their website and forgetting about SEO is the best decision they ever made. It gave them the mandate to create content experiences optimized for different social channels so that consumers have a great experience wherever they find Now This content.

Marketers take action
Meanwhile, marketers seeking to distinguish themselves from the bad actors in digital media are increasingly creating their own content to build positive customer relationships—with or without the help of publishers.

marketerpanel — (L-R) Dave Peck, Global Head of Influencer & Social Media Marketing, PayPal; Katrina Craigwell, Director, Global Content & Programming, GE; Christopher G. Laughlin, Client Services Director, SapientNitro; and Laura Henderson, Global Head of Content & Media Monetization, Mondelez International

“We’re trying to figure out, how we stop interrupting the content and become the content,” said Laura Henderson, global head of content and media monetization at Mondelez International.

Her group has gone as far as to decide the content it creates ought to be good enough to make money on its own merits. One of the products from this division of Kraft Foods, the Oreo Twist, Lick, Dunk mobile game, made back 2.5 times the money spent to produce it, with about 5 billion virtual Oreo cookies dunked, Henderson said.

Like publishers, marketers “feel the pain of ad blocking, of our content being skipped, blocked, avoided at all costs – which means we need to figure out a new way,” she said.

Katrina Craigwell, director of global content and programming at GE, leads a team dedicated to connecting with lovers of science and technology on any medium or platform where they can be found. These content creators compare themselves less with their traditional industrial competitors than with media sites that create engaging tech content, be it the SyFy Channel or the people at NASA who produced the “7 Minutes of Terror” Mars lander video.

Asked if she had any use for publishers now that GE can publish its own content, Craigwell said she looks for partners who know how to tell a great story or can help the firm figure out an approach to emerging formats, such as virtual reality.

Building brand strength
Many of the discussions of how publishers adapted concerned how they preserve their brand value while adapting to new business and content delivery models. The Onion Chief Operating Officer Kurt Mueller said that is something the satire site has had to be careful about with its experiments in native advertising: content is sponsored by advertisers but produced by the editorial staff.

The challenge is readers expect a certain attitude from Onion content, “and if we don’t give it to them, it comes off really badly for both us and the brand. You’re just creating ads if it’s not authentic to what you are,” Mueller said.

Laura Evans, VP of audience development and data science at Scripps Networks Interactive pointed out that data offers an excellent way to understand customer preferences, which can be leveraged to create better experiences. The goal, said Evans, is to “turn a visitor into a brand loyalist.”

As Membership Economy author, Robbie Kellman Baxter put it, “you need to love your customer more than your product” in order to create a positive relationship that will last a lifetime. And, as DCN CEO Kint pointed out in his opening remarks, “No business has succeeded, long term, without giving its customers a great experience.”

David F. Carr is a writer, editor, web consultant, and student of digital business. He is a Forbes contributor, a former InformationWeek Editor-at-Large, and the author of Social Collaboration for Dummies.

Innovation | Revenue

Customer-first strategy reflects—and builds—the power of the brand

December 2, 2015 Michelle Manafy, Editorial Director – DCN

Revenue diversification has long been a focus of media organizations but lately, the rise of ad blocking has underscored its importance. All trusted media brands have built enduring relationships with their customers—audiences and advertisers alike—however, developing new revenue streams is not a one-size-fits-all proposition. Publishers contemplating new sources of revenue must carefully consider options that deepen those customer relationships or fill their new or nascent needs while also protecting the power of their brand.

With that in mind, Digital Content Next added a new members-only event to it mix: Power of the Brand, held December 1st at Conde Nast’s new home at One World Trade. The event featured a wide range of non-advertising-based revenue opportunities being explored by media companies. On the Media co-host Bob Garfield—who admittedly spends much of his time chronicling the failure of media to effectively monetize digital—kicked off the day by outlining the dominate revenue strategies that publishers are using today.

Phil Terry, CEO of Collaborative Gain, Inc. set the tone for the day with the revelation that most consumer and product experiences are mediocre because the vast majority of them are created without actually including the consumer in the creative process. In part, he says this is due to “the arrogance of past success,” which can create dangerous product development blind spots. Instead, Terry says that those leading innovation strategy—be it the C-suite or product managers—need to get out and see how customers are actually using their products. This allows them to identify pain points and genuine opportunities.

Paying For It
Garfield came back to the stage to interview with Denise Warren, President-Digital & CEO, East Coast Publishing for Tribune Publishing, about one of the toughest revenue streams: subscription models. Warren, who hails from The New York Times (which recently reached the 1 million digital subscriber mark) joined Tribune publishing in May and has already announced plans to change the way it charges for online content in 2016. The Company will be shifting to the metered model, which Warren said allows customers to decide what sorts of stories are most valuable to them.

However, Warren emphasized that they will also focus on monetizing their most differentiated content—which for many Tribune publications is local investigative journalism. The big challenge in moving customers from free to fee is helping them recognize the value proposition which Warren said requires that they understand the audience. “Then we have to help them understand that we have what satisfies them and scratches their itch.”

Bring the Brand to Life
Certainly, this understanding (and subsequent customer satisfaction) is unique to each brand. NPR listeners become super-fans of on-air personalities and, according to Executive Director of Marketing and Branding Alan Feldenkris, NPR is increasingly exploring ways to “monetize that fandom” through live events. Success at NPR starts with brand love and affinity and, Feldenkris said, live events deepen their customer relationships while providing the potential to develop new revenue opportunities.

Fans of Refinery29 rely on the brand to offer stylish, creative and accessible fashion inspiration. CRO Melissa Goidel said it is essential for Refinery29 to remain true to its audience above all. So when they were thinking about New York’s Fashion Week—one of the most exclusive events in the world—they took a different approach and decided to throw a giant party that everyone could attend. The resulting interactive fashion and art event, 29 Rooms, attracted 6,000 live attendees and reached 1 in 6 Instagram users worldwide. While the event had sponsors, the company viewed it primarily as a way to extend audience engagement into the real world. They recently produced a similar event celebrating #MinnieStyle, demonstrating the ability to monetize that engagement.

Few brands garner as much fan engagement as Time, Inc.’s Sports Illustrated Swimsuit Edition but, according to Ian Orefice, Time Inc’s Head of Programming, until recently they had “given away” one of the most exciting aspects of the issue: the cover reveal, unveiling it on popular television shows. Orefice said they had an “ah ha moment” this year and created a sponsored original video in which model Hanna Davis learns she’s that she’s made the cover. He said that Time Inc. is now “trying to act more like a TV production company and think about windowing,” so that it takes strategic approach to video that allows the company to make the most of its assets monetizing them through licensing and other partnerships.

Learn as You Go
For Rodale, its assets include a wealth of health and wellness lifestyle brands, which the company leverages through print and digital subscriptions, utility apps, ecommerce and books. The company recognizes that its customer relationships revolve around the deep subject matter expertise of its writers and editors and is currently beta-testing a new way to offer that expertise to those who want to dig into a subject and learn more: Rodale U. Offering courses on topics from running a marathon to clean eating, Diego Sanchez, Executive Director, Digital Business Development says that, based upon internal marketing alone, Rodale has already driven more than a million people into the platform with a paid conversion rate of over 1%. And just this week, Rodale U debuted its first sponsored course.

Clearly, each of these brands is driven to drive revenue beyond traditional advertising opportunities. But they are driving safely. Throughout the day, the recurring theme was deep customer understanding and creating value for these customers in order to build new roads that lead to engagement and revenue.

Revenue

The Secret to Harvard Business Review’s Subscription Success: Its Customers

July 27, 2015 Michelle Manafy, Editorial Director – DCN

Want people to pay for your content? It’s simple: Get to know their needs, and create content experiences that meet them. That may sound simple but as Harvard Business Review’s (HBR) success shows, it takes a lot of work to get it right.

Josh Macht, Harvard Business Review Group Publisher, describes their process as an on-going conversation with customers. These days, that means finding multiple ways to interact with not only HBR’s 285,500 paying subscribers, but also the 5 million people in its database. These interactions take place through live events, in-depth querying of the 19k members of its advisory group, and a significant investment in analytics. Macht says HBR has become “increasingly scientific with data and analytics on the backend” but that all of these approaches in tandem are what provides them with the ability to design products users not only want—but are willing to pay for.

Vice President of Marketing Sarah McConville describes it as a Venn diagram where the ideal subscription offer is conceived of at the intersection of content, format and audience. “Obviously, it all starts with producing high quality content that our readers find valuable and we are always thinking about how we can continue to stay on the cutting edge of business research and thought,” she says. McConville also points out the many ways that HBR has expanded their format over the past five years—from its redesigned website, to a magazine redesign that’s in the works, as well as its print and ebooks, digital tools and events. Emphasizing the role that audience understanding plays in the company’s subscription strategy, she also notes HBR’s “significant investment in understanding our readers through audience research, website and social behavior analytics, and targeted discrete research.”

The clearest example of both the product development and subscription strategy emerging from this process is HBR’s Visual Library, which made its official debut in June. It allows paid subscribers to access a continually expanding collection of HBR’s charts, infographics, and fully customizable slide decks. The product came about after customer research revealed how many users rely on HBR information for their own presentations and the value of making that process easier for them. Both the research and new offering have paid off: On the day the Visual Library was announced (via its 5-million strong database), it became the second most trafficked page on the site, almost immediately triggering renewals by a slew of previous subscribers who had not yet re-upped. And the Visual Library generated more than buzz and renewals; it brought in new subscribers at an increased subscription price.

“What we’re trying to do is not take the approach of ‘add more, pay more,’” says McConville. “Instead, we try to find the right combination of elements that justifies a higher price.” She points out that as the print-to-digital migration has evolved, we’ve seen readers go from a wiliness to pay for, say, a tablet edition in addition to print to “merging the value of digital and print together.” To charge a premium, she says today’s content consumers demand more than format, they need tools that allow them to leverage the content in ways that “save them time and gives them confidence.”

Macht recognizes that, given the media industry’s increasing concern over the volatility of the advertising market, a wide range of publications are considering subscription offerings. However he also identifies a significant hurdle standing in the way of their success: “Though they say they want to get into the subscription business, they are still in the ad business. A dual focus is really difficult to support.” Unfortunately, many of the underlying requirements in driving the views necessary to support an ad-supported model run counter to those of developing a robust subscription business.

Macht knows firsthand how challenging these internal cultural shifts can be, pointing out that “way back when I first joined, we needed to open up the funnel, but the DNA of the organization was ‘we sell everything so we can’t give it away.’ But we didn’t have a pulse on the web.” Years later HBR is flourishing online both at its site, which boasts 5 million visitors a month, and through its 6 million social media fans and followers. This year’s new website design was accompanied by a redesigned freemium model. Now anonymous users can access five free articles a month, and if they register—making them a more highly addressable audience—they can access up to 15. HBR has also opened up the site content and toolset to those registered users for July and August, which has already doubled the daily average of people registering.

Then the process of getting to know these recently registered people to subscribe begins in earnest. And that, as Macht and McConville will affirm, is not just about conversion, it’s about an ongoing conversation.

Revenue

Interview with Robbie Kellman Baxter—author of The Membership Economy

July 20, 2015 DCN

A decade ago, DCN’s Editorial Director, Michelle Manafy, wrote an article about American Express’s campaigns around membership and how they used the concept of “membership” to create a clear value proposition. Having coined the business term “Membership Economy,” Robbie Kellman Baxter found a kindred spirit in Michelle. And, during a recent conversation, the two covered a broad range of topics, some of which we hope will be useful to the members of our community. Here are a few highlights from that discussion:

Please define “the membership economy” and describe how it differs from the sorts of subscription models used by the media for decades:

The Membership Economy is a massive new trend that is transforming virtually every major business sector, including media. It’s about access over ownership, relationships over transactions and community with multidirectional communication as more important than one-way push communication.

Subscriptions are a pricing decision; Membership is about the mindset of the organization.

Describe “the forever transaction” and “lifetime customer”:

In the Membership Economy, the transaction is the starting line, not the finish line, and it’s a forever transaction. What we mean by this is that at the moment a customer conducts the initial transaction with an organization, their plan is to stay forever, or at least until that organization no longer provides the promised value or that value is no longer needed. Organizations often focus on lifetime customer value, but they should be focusing on lifetime value to the customer, instead of just the lifetime value of the customer.

The question is, what is your promise to your customers? If they are looking to you as a source of news, for example, the promise is much bigger than “a daily newspaper”. It could be access to an event featuring a foreign correspondent, or a bundle for arts lovers that includes a subscription to Spotify, or the ability to share thoughts about specific trending topics with fellow readers. The idea is to focus on the mission as more important than the products.

With the “commoditization” of media, how can the concept of membership offer new insights/ models that media companies can apply to stand out, attract and retain customers?

In Membership businesses, specific products and services often become commoditized over time. Organizations need to expect this to happen and be prepared to continue to evolve to keep ahead. What can be protected today is tomorrow’s commodity. For example, professional associations have long provided directories as a key value. Today, LinkedIn makes nearly all professional directories commodities. Newspapers used to have access to the very expensive and relatively rare channel for distribution—printing presses and delivery guys. Now, with the internet, distribution is no longer the differentiator it once was. Organizations need to constantly re-evalute how to provide differentiated value to their members that can’t be accessed elsewhere.

For example, Pandora offers a unique experience for music discovery and enjoyment, but also invests in building a community among members, through its live town halls, logo-swag and culture committed to personalized responses to outreach by any member.

Where does “free” fit into the membership economy?

Not every organization should provide free stuff, but every organization should consider how free fits into their business model. Free can include both free trials, which are generally a “complete taste” of the offering for a finite period of time, as well as freemium, which is a free subscription, usually to a limited experience.

There are three reasons that free can make sense for an organization:

When free drives awareness and trial (typically what media companies do—such as the New York Times’ free articles before hitting paywall)
When there’s a network effect, meaning that each new free member drives value for each existing paying member (such as LinkedIn)
When a viral effect, meaning free members become channels for new paying members (such as the situation in the early days of Hotmail, when free email users sent emails to people who later became paying subscribers)

There are some cases where none of these benefits accrue, so free isn’t always good, but it’s always worth considering.

Could you provide a couple of examples of “membership” strategies from other industries that could be applied to today’s digital media industry:

Expanding benefits to include access to unique events—Caesar’s Entertainment often invites their most profitable members to meet Celine Dion, Elton John and other stars as they prepare for their nightly shows.
Using segmentation and persona generation to identify pockets of customers that are pushing the envelope of their usage and willingness to pay, to inspire new offerings and subscription categories. For example, American Express continues to release different types of cards. All cards promise to “have your back” but after many years of moving upmarket, from green to gold to platinum to black, they are now introducing debit cards targeting the underbanked community.
Investing in building high value relationships among key members of the audience—relationships can never be commoditized. For example, “Million Dollar™ Consultant” Alan Weiss provides his subscribers with access to an online community in which members share stories and advice with one another. While this community is free to members, it serves an important function for Alan, keeping a large group of former clients active and engaged in his community, and willing to listen to new offers and promotions.

As with any industry, it is important to be aware of what your peers (or competition) are doing, but it is also important to keep an eye on what others are doing and how it can be applied to your business. Once, memberships were only for clubs or organizations like Digital Content Next, right? Today, the concept of membership can be applied to any number of industries or offerings to create genuine value to customers and profitable experiences across the board.

Robbie Kellman Baxter created the business term “Membership Economy” and recently published the book The Membership Economy: Find Your Superusers, Master the Forever Transaction and Build Recurring Revenue.

Baxter is the founder of Peninsula Strategies LLC, a strategy consulting firm. The Peninsula Strategies website is www.peninsulastrategies.com. Her clients have included large organizations like Netflix, SurveyMonkey and Yahoo!, as well as smaller venture-backed startups. Over the course of her career, Robbie has worked in or consulted to clients in more than twenty industries.

Before starting Peninsula Strategies in 2001, Robbie served as a New York City Urban Fellow, a consultant at Booz Allen & Hamilton, and a Silicon Valley product marketer. She has an AB from Harvard College and an MBA from the Stanford Graduate School of Business.

Innovation | Revenue

Passion Play: Lifetime Launches Movie Classics Subscription Service

July 10, 2015 Michelle Manafy, Editorial Director – DCN

Boasting classics like Sexting in Suburbia, Flowers in the Attic, and Mother May I Sleep With Danger, it is an understatement to say that Lifetime has a passionate fan base. With an increasing number of networks experimenting with standalone digital services, A+E has deliberately taken a different route with the debut of its Lifetime Movie Club subscription video service—one that aims for the heart of their ardent audience.

“We view the Lifetime Movie Club as complementary to our Lifetime channel,” says Evan Silverman, SVP of Digital Media at A+E Networks. While the network has no plans to disrupt its existing relationships with television providers and distributors, Silverman points out that “A+E Networks has been very aggressive in delivering on a lot of different platforms,” which include iOS and Android apps, Apple TV, Roku and Amazon Fire. The network takes pride “in finding new ways to deliver our long form content to audiences.”

With its latest digital move—their first direct-to-consumer subscription service—A+E will offer subscribers access to a rotating library of Lifetime movies without commercial interruptions for $3.99 a month. The app features more than 30 movies about four new titles cycled in on a weekly basis. Silverman says that the decision to cap the number of movies enables A+E to maintain its flexibility in using its library in other environments. In fact, the Lifetime Movie Club idea arose as a way to leverage the depths of the Lifetime movie library.

But that was definitely not the only reason. “When we were thinking about what subscription product to launch we wanted to find a library of content that had a passionate audience,” Silverman says. And the Lifetime audience fit the bill. He describes them as a truly devoted group of fans who will be willing to pay to watch the classics they love. And given that the monthly price is about that of buying a single movie through iTunes, Silverman believes that Lifetime’s loyal fans will ante up for access.

A+E plans to continue to explore a range of models to distribute its content including a recent move to become part of the Dish Sling TV offering and exploration of other subscription products with its networks. “We’re open to models that make financial sense and serve our viewers well,” says Silverman. And while we may see similar offerings that “leverage library content to super-serve fans,” the additions to its digital offerings are intended to complement and round out the company’s range of offerings. “We’re not trying to blow up the television industry.”

Perspectives | Revenue

Inside DCN’s Next Conversation: Revenue Diversification

April 15, 2015 DCN

Revenue diversification is the final topic in the three-part series taken from our invite-only dinner The Next Conversation—an event we hosted inside the Digiday Publishers Summit in Vail, CO on March 26th. It’s a topic we think and talk a lot about with our members—from podcasting to events to eCommerce and subscriptions – digital content companies are well aware that advertising won’t fully pay for the great content of the future. And one clear take-away is that all forays into new streams of revenue must align with and complement one’s brand. Context matters.

Some highlights:

“You have to diverse your portfolio in terms of revenue. Whether it’s through subscription, events…you cannot have 70% of your revenue coming from advertising and only 30% of your revenue coming from elsewhere. It has to be more balanced”

—Steve Suthiana, Global Head, Digital and Media Operations, Mansueto Ventures

“You’re really looking for a path that allows your users to demonstrate loyalty and that grows your revenue separate and apart from ad dollars”

—Paul Marcum, Head of Global Digital Video, Bloomberg

“I think what Vice has done really well is bring equity back to the brand.”

—Lindsay Nelson, VP, Vox Creative, Vox Media

“Content is king.”

—Brian Danza, CTO, Daily Caller

Innovation | Revenue

Free to Innovate: Experimentation in Fee-based Media Models

February 20, 2014 Michelle Manafy, Editorial Director – DCN

For a time, free looked like the only option for the media business. The model seemed to be a veritable free-for-all. Because, despite digital content consumers’ insatiable appetite, models that made this all-you-can-eat buffet profitable—or at least as profitable as offline legacy models—remained elusive. The upside of the rise of free was that market pressure caused many media businesses to experiment with monetization methods and, in many cases, they have diversified their revenue streams, strategies, and organizational structure which makes them more resilient in the long term.

Yet contrary to the seemingly overwhelming tide of free, many media organizations sustain subscription-based models. In fact, according to research conducted late last year, 95% of OPA members have an ongoing subscription based strategy. And these strategies are far from stagnant.

Subscription Model Starting Point
While its longstanding subscription business makes it one of the industry’s paid content poster children, the Financial Times continuously pursues the development of new offerings that maintain customer affinity and feed the bottom line. When considering a new premium offering, FT.com managing director Rob Grimshaw suggests that you first focus on “what is unique or different about your product. Then he says, “take advantage of the flexibility that the web environment offers. You don’t have to put up a gigantic blank door on the site that says ‘pay to enter.’ The web offers many ways to do these things: You can build sampling in, you can use freemium models.”

Though Michael Crosby, COO of The Deal says that a subscription based initiative “is no different than any business idea,” he suggests examining the market and look for a problem that exists. Then ask “Can we provide insight or analysis the fills that gap?”

Sarah McConville, Harvard Business Review Group VP and HBR Press publisher, also approaches the development of subscription offerings from distinct value propositions. However she says “we always start with audience. For whom are we developing this? What job are they hiring Harvard Business Review to do?”

Innovation and Experimentation
As Grimshaw points out, digital media provide an opportunity for a great deal of flexibility and experimentation with pricing, offerings and customer experience. At FT.com, they not only view subscription models as a revenue stream, they are a means to better understand, serve and retain customers. “Subscriptions create a direct relationship with your audience,” he says. “You learn so much about them including demographics, onsite behavior and other information that can be very powerful from a marketing and advertising point of view.”

One insight that he has put to work for FT.com was that “engagement is absolutely critical to the success of subscription models.” This engagement imperative was a driving force between the company’s Fast FT product, which provides a continuous stream of “intelligent first-response to the news.” While the creation of a near-real time news culture marked a shift for the FT, Grimshaw says it has paid off with those visiting Fast FT spending ten or more minutes on the site.

HBR has also made a significant change in approach over the past year by offering “All Access” as its primary offer to subscribers. Readers can access their Harvard Business Review subscription in print, online, and via your iPad, and access to the current issue as well as the online archive of 50+ years of HBR articles. McConville says “we were really pleased to see that, in a time when many media brands are cutting subscription price and offering more content for free as a way of maintaining circulation levels, with “All Access” we’ve been able to add more subscribers, and increase the price with this subscription. Harvard Business Review’s 1H13 AAM Publisher’s Statement was the highest paid circulation level in HBR’s history at 260K. “

At The Deal, Crosby says they focus on helping readers come up with “ideas for their next deal through our editorial insight.” Realizing that these readers will then want to figure out how they might have a connection with someone who will help them make that next deal, The Deal launched a subscription offering called “Connections” that does just that.

Subscription Success Strategy
To create a content product that pays, Crosby says you must have an “obsessive focus on the user experience” Understanding how it fits in with their daily workflow is the starting point that will ensure that a user “needs to have your service.”

One piece of advice McConville says it is essential to align the editorial and commercial stakeholders in a shared understanding of how offerings serve subscribers. However she also suggests “bringing in the skeptics, listen and take them seriously.”

Grimshaw agrees that much can be learned from peers and your own team. However, he suggests that one of the best ways to foster innovation in subscription content offerings is to “look outside of the boundaries of the publishing industry.” He suggests looking at the retail industry, gaming, and others pioneering the space to find inspiration for the next generation of subscription innovation.

You Might Also be Interested In:

Q&A with Rob Grimshaw, Managing Director, FT.com on Subscription Model Success

Q&A with Michael Crosby, Chief Operating Officer, The Deal on Subscription Model Success

Q&A with Sarah McConville, VP of Marketing, HBR & Publisher HBR Press on Subscription Models

Innovation | Revenue

Q&A with Sarah McConville, VP of Marketing, HBR & Publisher HBR Press on Subscription Models

February 3, 2014 Michelle Manafy, Editorial Director – DCN

This Q&A is part of OPA’s “Three on Three” series where we ask three industry executives the same three questions on a topic to uncover actionable insights… If you want to learn more, keep an eye out on our site for more interviews. Today’s Three on Three is with Sarah McConville, the Vice President of Marketing for Harvard Business Review Group and Publisher of Harvard Business Review Press.

Q: When conceiving of a subscription-based model, initiative or product, where should you begin strategically?

A: At Harvard Business Review, we always start with the audience. Whether it’s a strategic initiative, a new product concept or our overall subscription model, we ask the questions: For whom are we developing this? What job are they hiring Harvard Business Review to do? What’s the context in which they will be using this offering? What are we bringing to it that is of distinctive value for the audience? What can we give them that is far and away better than they could get anywhere else?

And, just as importantly, we work to ensure that all parts of our business – editorial, marketing, advertising, product development – are in sync when beginning a new strategic effort or offering.

In the past year we’ve been following the framework of a book we recently published calledPlaying to Win. It’s been an incredibly helpful focusing mechanism at all levels of our business.Playing to Winputs you through the paces of asking: What is our winning aspiration? What does winning, not just competing, look like? Where will we play? Specifically, which segments, which markets, which channels, which products? How will we win? So that we get at what our strategic advantage is in achieving our winning aspiration, what capabilities must be in place? How must we be prepared as an organization and as individuals to achieve our aspiration? And finally, what management systems are required? In other words, how are we going to support our behaviors and track our progress? It’s helped us to align and cascade our efforts from an HBR group-level down to individual units and teams.

Q: Please describe one of your subscription-based initiatives and the way in which you feel it is particularly innovative.

A: In the past year we’ve made a significant change to our subscription model by offering “All Access” as our primary offer to subscribers. “All Access” is just that: You can access your Harvard Business Review subscription in print, online, and via your iPad, and you have access to the current issue as well as our online archive of 50+ years of HBR articles. We made the move to “All Access” after hearing from subscribers that this offer represented a greater value for them than just print or print and website alone. And I have to say that we were really pleased to see that, in a time when many media brands are cutting subscription price and offering more content for free as a way of maintaining circulation levels, with “All Access” we’ve been able to add more subscribers, and increase the price with this subscription. Harvard Business Review’s 1H13 AAM Publisher’s Statement was the highest paid circulation level in HBR’s history at 260K.

Based on the success of “All Access” we’re in the process of engaging with our audience to explore other ways of adding value to a Harvard Business Review subscription at a premium level so that we can build on our success to deliver an even better experience for our readers in the future.

Q: What advice would you give in terms of approaching subscription models creatively? Are there any best practices, processes, tips or resources that you would suggest?

A: I think it’s important to listen closely to your subscribers and to understand their most important needs today, but also have an eye on the future and a sense of how you think you can grow your business. Finding this balance of today and tomorrow is critically important. Engage in ongoing audience research, follow best practices from other media brands, but have a strong point of view about what you think makes your offering unique and what you can capitalize on to deliver more value.

When considering new models or offerings, work hard to align the editorial and commercial stakeholders in a shared understanding of how you’re serving subscribers and what you want to deliver to them. But also bring in the skeptics, listen, take them seriously. They will help you gain a different perspective on what you’re trying to do and push you to think more rigorously about the solution you want to offer and the audience segments and channels in which you want to play.

Work to create value for everyone – subscribers and customers, the editorial team and contributors, advertisers, employees. It’s important that everyone involved is contributing and feels they are being well served by the outcome.

Continually check your assumptions. What is true today is sure to change in the future. Evolving your subscription model is an ongoing practice that requires you to constantly test, try new things, learn from the feedback, refine − and sometimes, take a step in a new direction. Innovation is a dynamic process.

Sarah McConville is the Vice President of Marketing for Harvard Business Review Group and Publisher of Harvard Business Review Press. In her role as Publisher, McConville leads the commercial aspects of Harvard Business Review Press, including strategic partnerships, marketing and communications, licensing, and global sales. With Harvard Business Review Group’s executive team led by Group Publisher Joshua Macht and Editor-in-Chief Adi Ignatius, McConville is helping to shape the transformation of Harvard Business Review into a multi-platform digital media brand.

Note: This Q&A is part of OPA’s “Three on Three” series where we ask three industry executives the same three questions on a topic to uncover actionable insights.

Also in this series:

Q&A with Rob Grimshaw, Managing Director, FT.com on Subscription Model Success

Q&A with Michael Crosby, Chief Operating Officer, The Deal on Subscription Model Success