Pay-to-Play: Hidden Treasures

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BREAKING NEWS & VIEWS

Pay-to-Play: Hidden Treasures
Monday, July 20, 2009
Steve Smith

Finding ways to wring some cash directly from site visitors has become the topic du jour among the digerati this season. Much of the discussion revolves around platitudes and generalizations. The dot-com precedent of free-for-all content spoiled all of us, the saying goes. Advertising just can’t support all of the content online, others argue. We will all have to learn to make do with less revenue and less in-house content production, many contend, because the "model is broken." Consumers need to be "educated" about the cost of content and "rewired" to pay up, many say.

Well, in the interests of cultivating more informed discussion, minonline has embarked on a project surrounding paid content. On July 21 we will hold our own paid webinar on the topic with experienced executives from ConsumerReports.org, Harvard Business Review, Cygnus Business Media and mobile developer Scroll Motion. They will share some of the lessons they have learned about maximizing direct revenue from online visitors.

Earlier this month we featured five paid models we thought were worth watching from Rodale, Meredith and Time Inc.

And today we start compiling a more comprehensive list of paid content examples that may not have popped onto publishers’ radar as they contemplate their own pay-to-play experiments. We plan to build this list over time so readers have a fresh catalog of paid branded media online they can consult. If we are going to argue the case for or against paid content online, then let’s start by speaking from examples of the model.

Please contact us with other instances of paid content as we build this list in the coming weeks and months.

Fantasy Sports
According to estimates from the Fantasy Sports Trade Association, more than 27 million Americans play in fantasy sports leagues with an annual revenue of between $800 and $1 billion, which is higher than recent estimates of 2008 video ad revenue. According to MarketWatch, Yahoo is the leading source of fantasy sports, and it demonstrates that paid content pays back in ways other than direct fees. By identifying the users most willing to pay, and their specific tastes, the portal is serving behaviorally targeted ads to the player’s team home pages, which can be enormously effective. The Sporting News offers multiple contests across sports for fees based on the number of teams you start. ESPN counters with a number of free games. All of the major sports news providers profit from fantasy sports mania by creating content (sometimes for sale) around the passion. Fantasy gamers will not only pay to play, they will pay for content that helps them play.

Investor’s Business Daily
More than just financial news, Investors.com is the online presence for IBD and as much a series of investment tools and training as it is straight information. Users pay $189 a year to access stock ratings and research tools as well as analysis throughout the day. It is based on the stock picking system and philosophy of company founder William O’Neill. The Web site works on a hybrid model that feeds ads into the paid areas. According to the company, it consistently sells out ad inventory, as advertisers often find that their ads are most effective among users who are well-targeted by paid models.

Newsmax Newsletters
While conservative news magazine and site Newsmax is a successful right-leaning information source in its own right, it is also a front end for a database that makes even more revenue from selling print and email newsletters on finance and health. CEO Chris Ruddy tells us that last year $5 million in revenue came from the weekly magazine while $20 million came from online sources, including fee-based email newsletters. Apparently his conservative base of 2 million opted into news alerts and 300,000 who subscribed to e-letters have a passion for finance and health. He funnels them into subscription offers. Newsletters like “Financial Intelligence Report” and “The Blaylock Wellness Report” have about 50,000 subs each. Lesson learned. Sometimes the front end that attracts the initial audience is different from the back end of content that sells to that base.

ESPN the Magazine/ ESPN Insider
The contents of ESPN Magazine recently went behind the subscription wall of ESPN Insider ($6.95/month), which includes highly detailed columns and reports on teams aimed at the hard-core fan and fantasy game player. A magazine subscription is now included in the package. It is also offered as a bundle ($10.83/month) with Major League Baseball’s MLB.TV Premium service, which streams all regular season games. Creative bundling and tying the online offer in to a tangible print asset seems to be part of the strategy here.

U.S. News Weekly
When U.S. News went off of its long-standing weekly print schedule, the model moved to a digital version that now sells for $24.95 a year. The digital versions boasts embedded video and podcasts as well as the usual collection of breaking news and columns. A teaser offer of $3.95 for three issues is also part of the model.

New York Times Premium Crosswords
This is one of the quiet giants of paid content. The $39.95 a year subscription gives puzzle fans access to 5,000 puzzles as well as an interactive version of the day’s puzzle. This is one of the smartest examples of designing paid content around a passion. Puzzlers love to play against the clock and to solve with friends, so this site lets you do both. You can print puzzles easily, save uncompleted puzzles for later and even challenge others to solve a classic puzzle. It is like crack for a puzzle junkie. The added value is so obvious and addresses so directly the desires of the target audience that the price seems negligible.

Playboy Video/CyberClubs
A whopping $39.86 a month will buy you all the visuals a person can handle via Playboy’s video-on-demand service. Essentially, the site gives you immediate access to the catalog of Playboy DVDs. Once a contender among the most popular paid content brands online, the $29.95 a month CyberClub site gives you total access to the digital Playboy vault of nude photos and video shoots. Playboy also runs two other vertical clubs around its Special Editions aimed at specific erotic tastes as well as a club of amateur images and videos. Playboy won’t disclose membership numbers.

USAToday Mobile Games
The USAToday brand has gone aggressively into mobile content sales by spinning its crosswords ($4.99) and word game Txtpert ($.99) into iPhone games. Its Sudoku game for partner uClick takes a commonplace game and wraps around it added value such as hints, archives and smart design. Like the Times crossword, these items recognize that many brands have specific pieces of content that engage readers passionately and may engage their wallets as well.

Car and Driver Slideshow and iPhone Wallpaper App
$4.99 per month on Verizon phones and a $1.99 one-time charge on the iPhone App. Both apps from the HFMUS brand are leveraging the passionate user’s love of cars and the magazine’s talent for creating compelling imagery around that passion. The Verizon slideshow lets users paw through scores of models. The same is true of the iPhone app except users can turn any of them easily into wallpapers for the phone background. Cars are updated regularly, so part of the value is the ongoing freshness of the material.

Viv Mag
The digital magazine from Zinio has become a showpiece for the multimedia capabilities of the Zinio platform of downloadable and Web-based magazine experiences. The women’s service book is large and lush, with a lot of animation and embedded video, both in the editorial and in some of the ads. Membership of $36 includes the digital zine and access to an online community of peer and expert advice.

Keep the ideas and the references to paid content coming. We are looking beyond the usualy suspects of iTunes and WSJ.com. Where are media brands finding packages that map well enough with just the right audience to merit direct payment? Look for updates here in coming days and weeks.

If you have breaking news to share please contact Steve Smith at ssmith@accessintel.com

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COMMENTS

I think the model with the greatest potential is http://www.paycheckr.com.

Posted by Susan on Monday, July 20, 2009 @ 09:43 PM

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