With all the speculation about paid content, we’ve been missing some hard facts about exactly what publishers are managing to charge for and the type of business models they are testing out. Recent research commissioned for the Specialist Media Show polled the views of around 200 publishers, split between consumer and b2b, and with a bias towards independent businesses with under £10m turnover, typically operating in specialist markets. They show active experimentation with a range of paid content models and pricing approaches.
Paid online content: high subscription rates in some markets
33% are already charging for online content, and of those who aren’t now 22% plan to do so within the next 2 years, while 45% have ruled it out. Of publishers who are charging, the most popular model (57%) is an annual sub, with 17% charging on a monthly basis and just 10% a one-off fee. Around 30% make an annual charge under £50; with a further 10% charging £50-£100. What is surprising though, is the high number (32%) charging £100-£999 annually, with a lucky minority (7%) charging over £1000pa – likely to be highly specialised b2b information providers. So it looks like publishers are anticipating paid online content to be a good revenue source.
Digital editions – largely a free add-on for subs, but revenues growing
Over half of all publishers (57%) offer their digital editions free. A further 12.5% bundle them free with paid print subs. A minority, 16% make a separate charge. Most of those who do charge offer a discount of up to 50% to the print edition. However, almost half of those with paid editions expect revenues to grow by over 10% in the next year, and a similar proportion expect their ad revenues to grow by over 10%.
Mobile apps – poised for rapid growth, with more paid-for models
Much activity in this field, with 22% pioneers already with apps or with launches imminent; over half having launched in the last 12 months. Another 16% plan a launch in the next year; 11% in the medium term, with just 6% saying never, and a large group (45%) still on the fence. Unsurprisingly, most activity to date is for iphone and ipad, but Android and Blackberry are very much on the agenda for future development.
The most popular business model is a free app (35%), but 15% are sponsored and 23% are paid-for on a one-off charge; while 22% opt for a subscription model. (Respondents could select multiple options). 28% had a simple replica of their magazine, while 30% had added some enhanced content, and 17% offered a specific function such as listings or gallery.
Tablets & archives seen as subs opportunities; video/audio as ad plays
Other activity is on the agenda: with 42% planning tablet/e-reader editions, 35% digitised archive and 53% online video or audio content. The preferred model for tablet editions is subscriptions (46%) with some planning one-off payments (17%), sponsorship or ad-funding (14%). Subscription is also the favoured model for archive at 41%, with 14% planning one-off charges and 17% ad-funding or sponsorship. Online video and audio is, however, expected to be an ad-funded model, with just 11% planning subscriptions and 3% one-off payments.
Show us the money
So the big subscription revenue bets for publishers appear to be online paid content and mobile/tablet apps and to a lesser extent digital archives, while digital editions and video/audio are seen as more of a sponsorship/ad opportunity.
What are your views? If you are a specialist publisher experimenting with digital media and paid content, please comment below and share your experiences, or join the Specialist Media Network on Linked-in and swap ideas with over 500 other specialist media professionals.
The full results of this research, including a split of activity between consumer and b2b publishers, and the respective activity of larger and smaller businesses, will be presented at the Specialist Media Conference on 25 May, by Prof Barrie Gunter of University of Leicester and Jim Bilton of Wessenden Marketing.
The research was commissioned by the Specialist Media Show in partnership with InPublishing, PPA, Wessenden Marketing and University of Leicester. The survey was carried out by eDigitalResearch during March 2011.
About the author: Carolyn Morgan is MD of the Specialist Media Show and runs the conference programme. She also runs Penmaen Media, providing practical strategic advice on digital media and marketing. To discuss how to develop your paid content strategy, just contact us for an inital discussion.