Let’s talk about paid content, and look beyond the discussions around paywalls and micropayments. I want to explore one example of an online brand creating multiple digital revenue streams, and consider lessons in this for media companies – especially B2B media companies.
How a Blogger Earns Six Figures a Year
One blog I follow is – of course – a blog about blogging, called ProBlogger.net. It is run by Darren Rowse, a really nice guy from Australia, who sort of fell into this whole thing several years back, and has since become the guru of blogging. This week, he launched a community forum called "Problogger.community." And, he charged for it!
For $1.95 per month, you gain access to the forum where you can learn and collaborate with other members.
Some details on the program:
- $1.95 per month for "entry level" access. This is an introductory price, locked in for life.
- He will be adding on additional levels in the future.
- Why is he charging?
- He wants to pay forum moderators.
- A private community keeps out many spammers.
- He doesn’t want a massive community of hundreds of thousands, but rather, a more intimate and intentional group, who can get to know each other and collaborate.
Darren says that people asked him to do this for years. It wasn’t until he did an experiment and saw the value that was created that he made it real.
The site has not been live a week yet, and he has about 1,000 members. So that’s $2,000 immediately after launch. Let’s consider some scenarios for how this can scale:
- The $1.95 price is an introductory price, Darren will be raising the price sometime in the future. Even if he raises the price to only $2.95 per month, he now increased revenue by 50%
- This is the size of Problogger’s existing community from his free services:
- Monthly Traffic to Problogger.net – 531,804 unique visitors viewing 866,093 pages
- RSS Subscribers – 123,000
- Newsletter Subscribers – 29,890 (across a number of different lists)
- Twitter Followers – 76,273 followers
- ProBlogger on Facebook – 15,242 fans
- ProBlogger Job Boards – around 2000 RSS subscribers
Now, let’s make a random assumption that the newsletter subscribers are those who might be most engaged because they have taken the step to share their email address with Darren. And of this group of 30,000 interested people, let’s assume that only the top 10% are true hardcore bloggers, willing to pay a couple of bucks a month to participate in a forum.
Figuring that half of these people (1,500) get the introductory rate, and half get a "normal" rate of $2.95 (again, an assumption), then that means Darren gets $7,350 in revenue each month from this forum, with a stable roster of 3,000 members.
I don’t think any of these estimates are wildly hopeful, and we are talking about $88,200 dollars in revenue a year, on top of his other efforts with Problogger. Not only that, but he has stated that there will be additional premium paid content products coming out in the future.
Even if Darren can only hold onto 3,000 members at any given time, if those who jumped in at launch later cycle out of the system and all future members pay $2.95 per month, he still sees a 17% growth in revenue without any growth in user base.
But this is not the only way Darren is monetizing Problogger. Here are some other revenue streams:
- Print book (based on blog content he had already created)
- eBook (based on free blog posts session.)
- Advertising on the Problogger.net blog
- Affiliate programs
- Job Board
Not only that, Darren has quite a few other businesses and communities going:
- Digital Photography School
- Co-founder and shareholder of B5 Media blog network
- Plus other ventures to launch later in the year.
Darren is famously a "six-figure blogger," pulling in more than $100,000 per year through blogging, although, he doesn’t show me his paychecks. I think he has actually earned a few hundred thousand dollars in some years, but I’m really not sure. Either way, not bad for a man who owns his own business and doesn’t need to leave the house each day.
What’s more – Darren is actively building communities that are focused on HELPING people realize their goals and passions. This is very rewarding work, and he does it with a grace that is rather uncommon.
There are other examples of bloggers creating paid programs, such as Blog Mastermind, a course that opens its doors to a select number of members a few times each year, and not only takes members through a regimented program, but offers tools for its members to connect with each other for collaboration and business ventures. Here is a review of the course, with more details. They tend to charge about $75 a month, for a 6 month course. If they can get 200 people to sign up and stick through all 6 months, that comes out to $90,000.
Lessons for B2B Brands
So what lessons can a B2B publisher & media company take away from all this? Here’s a few:
- Diversify Your Digital Revenue Streams
Online ad revenue is a great thing, but this is B2B media – vibrant industries of experts who need professional knowledge and services. There are many opportunities to diversity digital revenue streams with things such as webcasts, eBooks, virtual events, forums, training & education courses, research services and more.
- Focus Not Just on Information, But Transactions
Merely informing an audience is not enough, a media brand needs to have a profound affect on the businesses in their market. Focus on products that are more transactional – that create revenue opportunities or partnerships within your audience – that have a direct influence on their business success.
- Build Expectations & Behavior Patters with Your Audience around Paid Content
You don’t have to bet the bank when considering paid content models. Start with one small (but valuable) effort that doesn’t have to create a huge profit stream. Part of what you are doing here is establishing behavior patterns and expectations with your audience that it’s okay to pay for highly valuable content. You don’t have to put up a huge paywall, you can just ask for a few dollars for one very specific piece of content.
- Test Ideas First
I love the absurdity of the expression "ready, fire, aim." We are lucky to have such a wealth of audience data and market research at our fingertips. Run small experiments that don’t require payment, and then comb through its performance metrics. Did it attract the attention you hoped it would? Did the delivery system work efficiently? Did your audience find the product incredibly valuable?
- If You Build it They Won’t Come
You must fully commit to nurturing new products. Darren created this forum after people had asked for it for years. He only launched it when he knew he could make a clear personal commitment to spending a lot of time interacting with people in this community, and after he hired moderators to do the same. Products like this need a lot of attention.
- Create a Low Barrier for Entry
It will be hard to gain traction if you are working on a new business model that your audience is unfamiliar with, whose value is unproven, and then you assign a high price tag to it. Look at the success of iTunes or the Apple App Store – they made it incredibly easy and cheap to try it out – in with some cases free content, and in most others, a price tag of 99 cents.
- Promise High Value that Solves Problems
Make a clear discernment between content that is "nice to have," and content that truly solves problems for your audience. They will likely only pay for the latter, as many news operations are now learning.
- Build a Platform
Consider how your digital products create a platform, database or community that you can leverage again and again. This way, you are establishing another customer touchpoint, and are armed with the knowledge that these are the people who made a clear choice to share information or pay for content. Always be conscious to serve their needs, not exploit that relationship.
- Segment Your Audience
Don’t think of your audience as one massive entity. It consists of a variety of roles, needs, and levels. You can offer products that are targeted to one segment of your audience, and allows greater trust to be built among participants who have so much in common. Niches are what B2B is all about!
Overall, consider how you can create a digital product offering with various levels of participation, from free, cheap to expensive products and solutions.