By Luis Hernandez • 10/22/2015
Coming up with the right subscription website business model(s) is usually the biggest stumbling block for those wanting to get into this business.
Choosing your content focus is a business-critical decision, as the focus you choose pretty much dictates your chances of success with a subscription website. However, more serious than the focus on content for a subscription website is the business model. Not considering the subscription website business model is a major mistake some publishers make.
3 Subscription Website Business Models
Mequoda has identified three discrete models for subscription websites. They’re defined as subscription website business models by the fact that users are “pushed” content on a scheduled and regular basis via their subscription.
- Mequoda Portal Website (free content)
- Mequoda Magazine Website (premium content)
- Mequoda Newsletter Website (premium content)
We recommend that any magazine or newsletter website has a free Portal that helps attract organic website traffic and convert it into new magazine or newsletter subscribers.
Having identified these three subscription website business models, we have brief descriptions of them below. In addition, we’ll identify seven more non-subscription website business models that publishers are pairing with subscription websites.
A portal subscription website aggregates content from outside sources. Portals are intended to build and feed an audience; they are specifically designed for SEO, email marketing, list building, and lead generation.
Portal subscription websites generate value from both the users and the sponsors. Users pay—not with money (all website content is free) but with time and information. They spend time viewing web pages, emails and RSS feeds, thus creating advertising inventory that can be used to sell the publisher’s products (internal advertising) and/or sold to third party sponsors (external advertising) on a CPM (cost per thousand), CPC (cost per click) or CPA (cost per action) basis.
- Example: Mequoda Gold Members Warfare History Network, National Association of Plan Advisors and Ceramic Arts Daily are the quintessential niche portal examples. All content is free, and the portal serves, as it always does in Mequoda systems, to drive traffic and promote subscription products.
- Read more about portal subscription websites.
A magazine subscription website model is set up to sell subscriptions for a related print or digital magazine and to provide access to issues of the magazine.
A website is only a magazine website if the user can view or download an issue of a magazine—one that is linear and periodic, has pages and a regular frequency, and can be viewed in HTML, downloaded as a PDF or downloaded to a mobile device.
Many people refer to any website that carries a legacy magazine brand and magazine content as a magazine subscription website; however, if the content is not organized in a magazine format and issues cannot be viewed or downloaded, it doesn’t meet the basic criteria of being a magazine subscription website.
- Example: When it comes to mentor sites, our Mequoda niche example is I Like Crochet, where Mequoda created for its innovative publisher and longtime client, Stuart Hochwert, what we believe is the first-ever actual website magazine.
- Read more about magazine subscription websites.
A newsletter subscription website archetype is set up to build subscriptions for a related print or digital newsletter and to provide access to issues of the newsletter.
A newsletter subscription website is commerce-based, with an overall objective of increasing product sales and providing customer service to existing subscribers. The minimum information unit is an article, and the primary product sold through the website is a single issue of the newsletter. The website is organized by the newsletter’s issue date.
A newsletter subscription website generally has a free area, with content that focuses on the benefits of becoming a subscriber to the related publication, and conversion architecture where a visitor can buy a subscription. It also has a password-protected private area, where paid subscribers can view an HTML version of the current issue of the print or digital newsletter or download it in PDF format, as well as access and/or download back issues and other premium content.
Like all premium models, a newsletter website is typically paired with a portal which promotes the newsletter website. The newsletter website does not produce any free content, so the heavy lifting of SEO and social media is left up to their portal.
- Example: An excellent example of this pairing of a newsletter with a free portal is Golf Odyssey, which is the quintessential newsletter website, and Golf Vacation Insider, which is the free portal that promotes it. Once you sign up from the portal to be an “insider,” you’ll get promotions for the premium product, which lives at the newsletter site.
- Read more about newsletter subscription websites.
Non-subscription website business models worth adding on
Mequoda currently defines 10 online business model websites that we build and support for our clients. The first three are above, and the final seven website business models fall into two categories: membership and transaction. You can pair any of these with a Portal and/or a subscription website.
3 Types of Membership Websites
Membership websites are defined by the fact that users access the content on-demand, when they have a question they need answered or a learning tool they need to access. A membership subscription website archetype provides paid members with a library of information on a specific topic of interest or a cluster of topics and creates a community of individuals who share a common interest.
Membership websites are user-driven and content-based. And unlike newsletter or magazine subscription websites, whose minimum information unit (MIU) is an issue of the publication, a membership subscription website is a destination in and of itself. Its business goal is to generate revenue from user-access fees by acquiring and retaining members; it accepts little or no advertising.
- Mequoda Community Website (free access, usually)
- Mequoda Library Website (paid access)
- Mequoda Classroom Website (paid access)
A community website is a powerful networking tool that relies primarily on user-generated content.
We usually say that a good complete publishing business model includes at least one free and one paid archetype. That means that you might run a paid newsletter subscription website, but build in a community for your subscribers to engage with each other through forums.
Websites with frequent postings by users not only encourage frequent traffic, they usually generate a webpage for every topic posted, which creates thousands of website pages and drives Search Engine Optimization through the roof.
Community subscription websites are used to create a setting where people with similar interests can use the virtual world to make real connections—whether purely social relationships or specifically B2B networks. It’s the online version of meet and greet.
Members might decide to share via his or her member profile, forum posts, file uploads, links, and other data. Registration is typically required, and most communities do not require payment.
- Example: Our niche media example, Ceramic Arts Community, isn’t in the business of selling advertising or even allowing companies to set up their own pages. It is, however, chock full of content. All of that helps keep those members stopping by the host Ceramic Arts Daily portal subcription website often, where, if they venture outside the forum, they continually see promotions for the two magazine subscription websites.
- Read more about community websites.
A library website allows paid subscribers continued access to a library of content that is updated constantly with new information.
Library membership websites are the online replacement for printed reference books, print directories, catalogues, and loose-leaf binders that used to be updated quarterly or annually. For a library membership website, however, the flow of new and updated information is constant. The paid member an search or browse through the library of data to access the information or listings and find answers to questions. Library sites for consumers can cost as little as $20-$30. For B2B reference sites, the membership can cost hundreds or thousands of dollars.
The MIU of a library membership website may be an article or a book, report, document, lesson, or episode. It could be something as small as a baseball card factoid or as comprehensive as a training video. While simple sites may rely solely on HTML and PDF files, more robust sites also incorporate still photos, audio, and video into the MIU.
- Example: Business & Legal Resources offers six different B2B library websites at its portal, BLR.com. The oldest of these, HR.BLR.com, for human resources professionals, offers an exemplary mentor site for the B2B publisher. Users can search the library for a vast range of MIUs, including documents, checklists, forms, job descriptions, letters, policies, PowerPoints, surveys and more.
- Read more about library websites.
A classroom website organizes a series of courses for paid subscribers that is updated regularly.
Back in the dark days before the Internet, many publishers thrived by producing newsletter or looseleaf print training services that were typically membership based. Today, those print training newsletters have been replaced by the classroom website business model, now with the ability to not only produce their own training videos and other 21st-century materials, but to create custom portals for corporations to produce their materials and upload them.
- Example: Leadercast offers a robust premium content membership called Leadercast Now in which members can watch short videos of respected world leaders from all walks of life and business discussing strategies, techniques and principles of leadership. Members can also track videos they’ve watched, videos they plan to watch, and their own progress at executing a range of hands-on exercises to reinforce learning in a personal dashboard called the Activity Manager.
- Read more about classroom websites.
4 Types of Transaction Websites
Transaction websites are built with the primary intent for the user to buy a product or an event ticket (paid for by the user), or to look something up in a directory (listings paid for by the advertiser).
- Mequoda Lead Generation Website
- Mequoda Directory Website
- Mequoda Event Website
- Mequoda Retail Website
A lead generation website’s main function is to gather contact information, usually an email address, from a visitor in exchange for giving them something for free.
It’s a business model that’s almost entirely made possible by the Internet, and it works like a dream. In the days before the World Wide Web, lead generation meant finding potential customers in person, or getting them to return a postcard from a print product, to get a freebie. That was fine, but with email being more practical and far quicker, this is a website business model that’s taking off.
Like many website business models, the lead generation site can be paired with a free portal subcription website. But in all cases, the content is always completely free to the user, the only cost being the email address.
Once an individual has done business with you by accepting your freebie, you’re entitled to put that person on your email list for marketing purposes until he or she tells you otherwise.
- Example: At Mequoda Gold Member website Investing News Network, companies give away detailed financial reports called “investing kits,” while asking if they’d like to sign up for related news from their partners. Free content surrounds the offers for these kits to give the site plenty of user value.
- Read more about lead generation websites.
A directory website sells premium listings to businesses, while offering the directory to browse by users for free.
When you have a robust directory, users can flock to your site for information that’s more specific and relevant to their needs than any Google search could deliver. As the icing on the cake, Google loves a good directory: When it’s properly tagged and optimized, it will always appear near the top in Google search rankings because Google also knows its content is valuable to its users.
Listings in a directory can be either free or, for those who want more real estate and sell copy, premium (paid). A truly robust directory can even be 100% premium; once you have enough listings to be the only game in town, you can dispense with the free listings. In either case, the more listings you have, the more credibility you have with your users and with Google. When it comes to the directory website business model, size definitely matters.
- Example: Mequoda’s niche example of a directory website is MetroParent‘s business directory. MetroParent publishes a free print magazine which is also available as a magazine subscription website. For an added bonus for businesses who purchase listings, we created a directory plug-in to their Haven system so the editorial staff can automatically drop in the top 10 premium listings for any category into a related article, where they reside at the end of the article, adding value for the reader. Directory listings also appear at the bottom of each category page.
- Read more about directory websites.
An event website’s sole purpose is to provide users with details about an event and sell tickets.
The appeal of hearing, seeing and speaking with actual people and touching real-life objects has never gone away, and thus the event business is not only surviving, but thriving in an otherwise digital era.
The Internet still plays a role, however: Now an event publisher can promote and sell tickets to an event in living color on a website. And a very successful website business model it can be, even for publishers who only added events to their legacy offerings in the Internet era.
Unlike subscription-based business models, Mequoda event website business models are retail websites that are purely transactional, and must be paired with a content-rich portal subscription website to attract traffic.
Alternately, an event website may pay for website traffic using third party media such as display networks, text ad networks and other publishers’ email newsletters and websites.
- Example: Our longtime client and fellow Boston-based organization, the Program on Negotiation at Harvard Law School, is an excellent mentor site for anyone launching a niche media event site. After adding a portal subscription website, PON’s revenues have grown by more than 63%, its programs are filled to capacity and they’ve added new programs as well. Meanwhile, the cost of marketing via direct mail was 32% of the budget; today their total marketing spend is a mere 7%, with all event tickets now generated from their own Mequoda portal subscription website and their email list.
- Read more about event websites.
A retail website is built to sell a catalog of multi-platform products.
The interesting thing about the retail website business model is this: The largest online retailer in the world started out as a bookstore.
For those of you old enough to remember, Amazon has not always been the unchallenged retail king of the Internet, selling everything from air conditioners to Ziploc bags. What we now think of as the most futuristic, virtual retail company of all time got its start using the Internet to sell good old-fashioned print books.
- Example: Amazon, of course, needs practically no introduction, it’s the world’s largest online retailer by revenue.
- Read more about retail websites.
A Repeating Pattern
When you charge a fee to access the content within a subscription, membership, or transaction website, the site needs to provide specific and immediate benefits to your subscribers. Are you planning on building a subscription website? You can schedule a 30-minute needs analysis call with our CEO and Lead Consultant Don Nicholas to discuss the plans.
Editor’s note: This article has been updated many times from its original publication date in 2006 as new business models emerge.
Posted in Subscription Website Publishing