Rodale Finds Ways To Make Them Pay

By Steve Smith

What content will people pay for online? Maybe the secret involves an offline connection. "Almost every product we have is sold usually with an offline component," says Rodale executive vp/customer marketing Gregg Michaelson. For example, Men's Health editor-in-chief David Zinczenko's Eat This, Not That is not only a premium Web service but also a multi-title book series. And Prevention editor-in-chief Liz Vaccariello's Flat Belly Diet! (see page 5), also multi-titled, appears online and in videos.

When Michaelson ponders the question du jour of Internet publishing--What will people pay for?--he comes at it from a different direction. "We don't just think about the online product but a suite of products. Consumers don't just want an online offer." The model allows him to sell customers on a franchise and a concept they can access in multiple ways: conventional book, journal, videos, calorie counters, cookbooks, etc.

Michaelson knows a little about premium content, since Rodale bellied up to that model in 2005 with NBC's The Biggest Loser, and he now runs eight paid programs that attract hundreds of thousands of subscribers. He tells us that 30% of overall digital revenue in 2008 came from subscription services. In a model such as the Men's Health Personal Trainer, users pay $45 for three months. For the Eat This, Not That franchise, users have access to a database of food information for $19.95 a year.

While Rodale is a leader in making people pay online, Michaelson remains a big believer in the power of free to upsell. The Belly-Off program has a free eight-week component of static content that then tries to upsell the paid product. "We get conversions in the 25% range from free to paid," he says.

So which content really works in the paid model? Think less about content and more about service. "It does have to be great content that isn't available elsewhere for free," says Michaelson. Online fitness programs are a dime a dozen, but offering community, interactivity, and a host of downloadables and applications, podcasts, etc., is what communicates added value that is "totally engaging. I believe the best [analogy] is that you can go to a gym and try different machines and think you are on a program, or you can invest in a personal trainer. By investing, you assume the trainer knows more than you do, and you will show up because you are paying."

And paid users show up and stay, says Michaelson, with typically a nine-month longevity in a program. "They are craving content."

Ultimately, publishers have to do more than twisting arms, lowering sub walls and somehow making the futile case to readers that what they have been getting free for the past ten years now is worth their coin. "I personally don't believe putting a wall in front of a magazine site is the answer," says Michaelson. "It requires a robust interactive experience."

Experience is the operative word, and perhaps 360 is the important number. We used to say in the Internet biz that people will pay online only for content that makes them healthy or wealthy or isn't available anywhere else, but perhaps we defined the challenge too narrowly. Instead, we should be looking at how digital media is one piece of an experience that is always with the user. Books, magazines, and even DVDs can offer a surround sound product experience that is easier to buy into than simple online "access" to specialized information. Add in mobile, downloadable podcasts, social networks, live events, and higher levels of personalization, and the question, How do you make them pay for online content? seems downright unimaginative.

Steve Smith (POPEYESMITH@COMCAST.NET) is digital media editor for min/min's b2b/MINONLINE.COM. He posts regularly on The Minsider blog and directs the min Webinars. Smith also co-chairs the annual min Day Summit and as ceo of Roving Eyeball Inc., consults for a number of publishers in the digital space.