Consumers Union Vice President and Editorial Director Kevin McKean shares his thoughts on paid content
Consumer Reports, like other multiplatform publishers, creates content once and repurposes it endlessly. A brand that takes no advertising, their business relies on selling that content in every channel they distribute in. The most intriguing channel for us is their successful paid subscription website: ConsumerReports.org.
The pricing model is as follows: print subscribers get a discount for the web subscription and web subscribers get a discount for a print subscription. McKean says the majority of subscribers on both sides are paying full price, meaning there’s only a small percentage of subscribers who take both offers. Why? Because the audiences are truly different. Magazine readers subscribe for mastery, while online users subscribe primarily for research. The print magazine has 4 million subscribers and the website holds steady at 3.2 million paid subscribers.
While a paid website has been a perfect strategy for them, one big lesson learned over the years is that they can’t just be a closed community. They must do more to bring free visitors in, as free visitors account for most sales, more than the visitors they drive through paid search. Score one for using free content to sell paid content! The truth is though, that free visitors convert at one tenth what the paid search visitors convert at, but paid search is “killing them” in terms of cost, so they’ll be less reliant on it going forward.
Download a FREE copy of 7 Ways to Monetize your Portal Audience, and discover how today's top publishers are generating revenue through memberships, events, clubs, sponsorships, and more.
McKean shared several lessons on paid content, which he enforced are just “his opinion”:
1. You can use news to drive your brand, but you can’t necessarily use it to drive a subscription model. One way Consumer Reports has taken advantage of newsworthy items is to post a story into a popular period, distribute it via social networks, watch their traffic spike and then get some portion of that traffic to covert to paid content.
2. Watch for channel preference. After years of trying, Consumer Reports can only sell dual subs (print and online) to less than 1 customer in 5. His suggestion: sell by channel, not by info. For example, if you go into mobile, don’t give it away to existing subscribers.
3. Repurposing content isn’t cheap. People assume it’s easy to move information from medium to medium, but it’s not. Each medium deserves its own attention and effort to ensure the content fits the experience of the medium accordingly.
4. Don’t bet the farm on selling “micro” content. He finds lots of publishers attracted to the iTunes model. He recognizes that you certainly can do one-off sales and be profitable, but the challenge is in having to sell the content over and over again. He’s more of a believer in subscriptions, as the subscription model takes advantage of the real economics of the web. Cost to fulfill is basically zero.
5. Social media is incredibly important. When they did a story on the iPhone 4 antennas not working, it took off virally in such a profound way, which they didn’t expect but were, of course, thrilled about.
6. Be open to new business models. McKean is a fan of the proposed NYT strategy to charge visitors after a certain number of pageviews.
What is your opinion on McKean’s opinion? Please share in the comments below.
For more coverage of AMC 2010: