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Is there a large market for super expensive media subscriptions?
When building a news subscription product, one of the most important decisions you can make is how to price it. Do you aim low with the hope that you can sell it to a mass market? Or do you jack up the price with the knowledge that your core audience is relatively price insensitive?
To see this dynamic in action, look no further than The Washington Post and Wall Street Journal. With my Amazon Prime subscription I get WashPo for something like $4 a month. The WSJ costs me $35 a month, or $400 a year. At those price points, the WSJ can generate 1/8th the subscriptions as WashPo and still collect the same amount of revenue, and it’s confident it can charge that much because of its business journalism bonafides. In fact, a huge portion of WSJ subscribers get their accounts through their jobs and might not even know how much a subscription costs.
But there’s a third category of subscription product, one that costs its customers well into the four or even five figures each year. These services almost always rely entirely on enterprise sales; in other words, if your company isn’t willing to pay for it, then there’s little chance you’re handing over your personal credit card.
The Bloomberg Terminal is probably the best example of this. Bloomberg LP generates billions of dollars annually simply because nearly every serious Wall Street trader pays $20,000+ a year to gain access to real-time market data and news. Politico Pro has also found success in this category, charging five figures for ultra-niche policy information to businesses that interact heavily with the federal government and its myriad agencies.
But how large is the market for these super expensive subscription products, especially as more and more publishers launch their own? Fortune is the latest to throw its hat into the ring, launching a $2,500 a year “learning platform” that’s geared toward senior executives who might otherwise attend one of its annual conferences.
To start, there will be an online library of repurposed recorded conference content and a weekly newsletter. And a few weeks into October, virtual meet-ups, participatory events and “sprints,” or condensed lessons of important topics, will kick off as well.
It’s “a scalable platform for providing the lessons that we give at our conferences to a much broader group of executives,” said Fortune CEO Alan Murray, adding that CEOs who attended conferences reported to Murray’s team that the information presented would benefit emerging leaders in their companies who weren’t at the high enough level to attend the conferences themselves.
I get the appeal of products like this; you can generate pretty sizable revenue with relatively few customers. But I remain pretty skeptical that very many publishers will be able to play in this arena before it becomes incredibly saturated. The universe of businesses that have the resources to pay for annual $2,500-per-person subscriptions is relatively small, and the sales conversion process is a lot more labor intensive.
Publishers like The Wall Street Journal and WashPo can lead with their content, meaning that the typical sales conversion takes place when a user attempts to access a piece of important information and can’t. But products that cost thousands of dollars a year usually require an actual sales force to close deals. What this means in practice is that the person who approves the purchase is different from the person actually consuming the content. This throws all the efficiencies of scale the internet affords out the window.
All of which is to say, I wish Fortune the best of luck, but I’ll need to see some cold, hard subscription numbers before declaring this product a financial success.
He helped launch a thriving news cooperative in Bristol UK
All across the world, thousands of entrepreneurs are experimenting with ways to solve the local news crisis. Some have launched local blogs. Other built town-focused networks. Still others debuted daily newsletters.
Quite a few local news startups these days are nonprofits. But Alec Saelens and a few of his colleagues decided to try out a very specific model: a media cooperative. These involve group ownership, not just among the publication’s staff, but also the local community members as well.
A few years ago, they launched The Bristol Cable, an investigative news startup that boasts on its membership page that “there are no majority shareholders or commercial investors, and we do not accept corporate advertising.” It currently has 2,100 paying members.
I interviewed Alec about why they settled on the media cooperative model, how they found their first stakeholders, and what impact that publication has had on the Bristol community.
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How YouTuber merch is getting a lot more sophisticated
I’ve written in the past about how the “Adpocalypse” -- changes to YouTube’s ad platform that drastically reduced many creators’ earnings -- forced YouTubers to become more savvy business people and diversify their revenue streams. Within a year, most creators had launched brand collaborations, subscription products, and lots of merchandise offerings.
In those early days, launching a merch line usually just meant slapping your logo onto a t-shirt and then selling it through some print-on-demand service like CafePress or Teespring. But as the merch market has become more saturated and competitive, we’ve been seeing more sophisticated product rollouts that aim for real differentiation within the market.
Logan Paul’s Maverick is a good example. It’s not just a logo applied to a bunch of products. It’s a custom-designed fashion line and community. Paul has purchased LA billboards promoting it and wove it into the fabric of his daily vlog. He invites Maverick customers on the channel and is erecting an entire community around the brand.
In a recent interview, he revealed that it generated between $30 and $40 million in just its first year.
“It was the first time I really understood the power of a creator and being able to move an audience outside of a platform. Except now — I mean, we’re all feeling this, all creators — merch is so oversaturated. It’s not the thing anymore. There a few creators, like the Nelk boys — who are having their $30, $40, $50, $60 million years, and probably MrBeast, too — but besides them, its such a hard industry to break.”
As the programmatic advertising market continues to collapse, we’re going to continue to see more product-content integration all across the media industry, from independent creators to large publishing companies. This is the world that paltry CPMs have wrought.
Want to ask me a question I can answer in this newsletter?
I have a secret Facebook group that’s only promoted to subscribers of this newsletter. I try to post exclusive commentary to it sometimes and have regular discussions with its members about the tech/media space. Go here to join. [link]
I didn't really know anything about Red Ventures, the company that just bought CNET for $500 million. This is a good overview. [link]
The new Apple bundle probably won't sell many Apple News+ subscriptions. [link]
Amazon bought Goodreads and seems to be letting it die a slow death. [link]
"When its licensing business first launched in 2017, BuzzFeed generated less than $5 million in licensing sales, the spokesperson said. In 2019, that number increased to $260 million" [link]
I was recently interviewed about my paid newsletter, and I went pretty deep on how I built it so it delivers lots of value to both my paid and non-paying subscribers. [link]
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