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Ad Revenue vs. Subscription Revenue

Should an online subscription paper switch over?

5:07 pm on Mar 16, 2006 (gmt 0)

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I'm working with a high-traffic online newspaper. They feature a leading article for free, but force a subscription to access the rest of the paper's content.

They need more money.

Apart from monetizing the free landing page, I'm inclined to suggest they stop selling subscriptions altogether, and start implementing adsense and other affiliates. (Currently their advertising sucks).

One problem: they'd have to give up their existing subscriber clients, which would mean a hard drop in revenue in the short term.

Would the ad revenue make it worthwhile? Of course, it's hard to say without knowing all the details, so what I'm asking for is anyone's thoughts or past experience with switching over from the subscription model to the advertising model.

Thanks for your help!

7:44 pm on Mar 16, 2006 (gmt 0)

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A quick thought:

It would highly depend on how vital the information is that this publication carries to its readers. If the readers are professionals and this publication is a must-read in the profession, a strong case can probably be made for subscription only.

If we're talking about fluff reading by Joe and Jane consumer, well, that's not likely to be so successful as subscription.

As for Adsense, the more highly niched and specific the articles, the better Adsense might do. The deeper the content also, the better.

Do you have any metrics at all that help you make a business case for this? For example, if you can say that the free story is read by 50 times as many people as subscription stories, well, that might mean there's a huge appetite for the free stuff that is untapped. If it's only a three-fold difference, seems to me that it's probably a no-brainer to keep it subscription-only.

The more information you can muster, the better.

4:09 am on Mar 18, 2006 (gmt 0)

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joined:Jan 22, 2005
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Thanks for the advice :) Very logical, and helpful. I'll look up all that info and shape the proposal accordingly.

One question: supposing the stats show a 50-fold readership of the teaser - indicating that it might be wise to get rid of the subscription - then what's the safest way to do this?

I think I might like to start by just opening up a few additional pages, putting ads on them, and seeing what happens. Right away, I can think of two problems:

  • risks upsetting the subscribers
  • might not be an accurate predictor of how things would be with full free access

    Are there any other foreseeable problems?

    And any solutions?

    One other thing: it's a plain ol' online newspaper. Anyone know what kind of success newspaper sites have been having with adsense? I think tech, electronics reviews and finance would fit right in, but what about a regular, political front page article. Any hope for adsense there? Any real life experience?



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