Charging for content: Syndication and other models

Case Study of the Subscription Model at Variety.com

[I gave this talk at the Highway Africa 2001 conference in Grahamstown, South Africa, in September 2001. I was one of two speakers, the other person talked about syndication, which, as an aside, I think is very difficult to do simultaneously with requiring subscriptions....]

Variety was among the first of a group of newspapers that have recently switched to a full subscription model. In addition, since the day Variety.com launched in 1998, it had a partial subscription model -- it charged for some of its articles. Is Variety's model an example for the rest of the industry? Maybe not -- there's a number of a differences between this trade publication and a general interest newspaper.

SUMMARY
* ABOUT ME
* ABOUT VARIETY
* THE SUBSCRIPTION MODEL
* SUCCESS?
* FUTURE PLANS?

About Me
* First used a BBS in 1981 to dial into pirate bulletin boards
* First used email and chat in 1990 to keep in touch with my girlfriend in Canada
* When told of it, my Dad said "someone's paying for it" -- and he was right
* Went to work for the Los Angeles Times with Prodigy and then with a Web site
* Left there as Deputy Editorial Director
* Left to move to Paris, did consulting, learned photography and French
* Moved to Budapest to work for Pressflex as Vice President of Client Relations
* Pressflex offered a Web publishing system to small publishers lacking staff and skills to develop their own Web presence
* Moved back to Los Angeles become editor of the Variety Web site

About Variety
* Based in Los Angeles and New York, stringers in dozens of countries
* Covers the business of entertainment (not celebrity gossip)
* Established in 1905, covering vaudeville
* Started covering movies, radio, television, rock and roll, the VCR, the CD,
* Daily Gotham edition as well, launched in 1998

Print info
* Daily Variety has a print circulation of 65,000 (unduplicated for all publications
* Cost: Daily: $239 annual, U.S.
* Weekly: $219 - $485

About Variety.com
* Launched in 1998
* Always had paid content
* Offers news, reviews, box office numbers,
entertainment calendar, stock info, event photos,
production charts
* Archives back to 1998, some reviews back to 1914

Original plan (1998)
* Mostly ads, some subscription
* Some content free, some paid
* no Weekly articles
* Cost for print subs: $180 / year
* Cost for online only: $396 / year
or $6 / day
* Three sales people for online only

Current plan (2001)
* Even split between subscription and ads
* Nothing free on site (except classifieds, help, and email sign up)
* Cost for current print subscribers: free
* Cost for online only: $59 / year
or $2.95 / day (same as print)
* integrated sales staff with one trainer
* all articles, reviews online

What else?
* 9 more email newsletters
offered for free
* Started marketing the site
* Included clickable bylines
* Redesigned the site to improve usability

What's happened?
* Before (end of 2000, Q1 2001):
130,000 uniques / month
2 million page views / month
* After (Q3 2001):
225,000 uniques per month
2.2 million page views and growing

* Before: 1,500 subscribers
50% also print subs / 50% online only
* After: 12,000 subscribers
75% active print / 25% online

* Before: 24,000 email subscribers
120,000 emails a week
* After: 100,000 subscribers
255,000 emails a week
(Note: we added 8 more email publications)

Ad revenue
* Is up over last year
* Is 75% of our total revenue

Benefits of Full Subscription
* Clear message to readers: "All our content has value"
* Closer ties to the newsroom (they pay attention to something worth paying for, to something with paying customers)
* Helps to clarify and distill your audience
* Allows you to offer better service to your customers (you can identify and personalize more easily)
* Is easier to maintain and produce for than a split-tiered site (of course, all free is easiest)

What Can You Charge For?
* Original content
* Credible content (not random user discussion, but possibly insiders/expert)
* Valuable content (that which is used to make financial decisions)
* Timely content (that which you have first, or which you can deliver to the reader in an efficient and unique presentation)
* Your brand, your history and the trust you have built up with existing clients -- they will pay if you ask them to

Other Notes
* Requires online order taking and customer service
* Requires an integrated print and online database (which you MUST have anyway to offer reasonable customer service)
* Requires unique content -- if they can get it (easily) elsewhere, they will
* Requires some, but not much, protection against people sharing a password around - it'll happen, just make it more annoying to do
* Requires much more security against granting access to people's personal data

Future?
* Watching wireless
* Personalization in small steps, where appropriate
* Possible syndication of Variety data content (not articles, other data collections)
* Building out classifieds (it's never been a Variety focus)
* Possible press release service
* Acting as a Web publisher -- sharing resources and building services for our advertisers, much as the print paper builds ads for certain advertisers, completely separate from editorial

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