Free digital content has broken the revenue mechanisms for many media production companies. Nothing is fixed, and increasingly it appears as though few paths are exactly alike.
How are people making money with digital media? These five examples are newly emergent models of revenue generation being pursued by organizations.
1) The New Inquiry: Making a first step
A growing politics and literature blog produced by alienated Ivy League graduates and made famous by a NYT Style Section article, has just announced a new emailed PDF subscription model. The cost is $2/month, with funds accepted via Amazon Payments.
The New Inquiry will also be accepting donations pending IRS approval of their status as a 501(c)3 non-profit group.
2) Hacker News Monthly: Convenience & a different form factor
Hacker News is a crowd-produced news aggregator for programmers and entrepreneurs, hosted by the startup incubator Y Combinator.
Hacker News Monthly, is a print and digital subscription option of the highest rated pieces in Hacker News. It is produced by netizensmedia and benefits financially from the content but has no association with Y Combinator.
The first three issues were offered for free, and are still available for download.
- Single issues are available for download in PDF, MOBI, and EPUB formats at $3.
- Print copies, made available via the HP Mag Cloud service, are $9.
- A 12 month digital subscription costs $29/year, and includes access to all previous issues.
- A 12 month print subscription includes all digital access, and is $88/year plus shipping.
By allowing consumption of their publication through multiple formats, they'll have further reach, especially in a community that embraces this sort of flexibility.
3) Nectar Ads: A specialized ad network for specialized content sites
Nectar Ads is an online advertising network that specializes in the visual arts, and works almost exclusively with New York City based open-access art blogs, such as Hyperallergic, Colossal, Art Fag City, Two Coats of Paint, and Rhizome, which is affiliated with the New Museum.
Working with these blogs, Nectar has a acquired a "Highly Targeted & Influential Audience" that it connects to "Well Vetted and Curated Sponsors." That is to say, not every advertiser is welcomed, in order to preserve the credibility of the participating publications.
4) Vice: A magazine upstart, growing into an international digital youth lifestyle channel
Vice, which started as a punk magazine in Toronto, is perhaps the biggest smash hit out of all the new digital media models. Marketing & Communications conglomerate WPP invested in Vice "to further develop our content capabilities, particularly in new media and amongst the youth consumer segments. Vice has been extremely successful in developing and repositioning major brands in these areas." Vice has since aggressively and successfully scaled out its televisual work, building a platform that fully takes advantage of the potentials of digital media.
So far, the company Vice appears to have worked with most closely is Intel, with whom it maintains an ongoing media property, The Creators Project, and throws events with tastemakers internationally.
Their ad-supported magazine is free, and reportedly disappears from hip skater and clothier shelves within minutes.
Limited information is available on the specifics of Vice's income, but revenue in 2011 was more than $100 million. Projections for this year are doubled, with 20%+ margins, making the company worth an estimated $1 billion.
5) The New York Times: A massively scaled, mature operation struggling to adapt to a paradigm shift in media consumption
The NYT offers free, unfettered digital access for all print subscribers. The cost of getting a print copy delivered is regionally adjusted, but New York City residents are charged $6.05/week for a 7-day subscription.
For non-print subscribers:
- Access for up to 20 articles a month is free. In order to not discourage social sharing or SEO, visits from social media sites and search engines are not counted towards this total.
- Unlimited desktop browsing + smartphone app is $15/month.
- Unlimited desktop access + tablet is $20/month
- Unlimited access across all devices and "share it with a family member" is $35/month.
The introductory rate, for all levels of subscription, is $.99 for the first four weeks.
Cleverly, when the NYT first launched their pay wall, certain users - qualifying paradigms undefined, but probably the heaviest users who shared most frequently - were given a year of free service, a giveaway sponsored by Lincoln. When their trial was expiring, these users were emailed the $.99 deal, after which their credit cards were autobilled for the full payment amount monthly.
The NYT is also available on the Amazon Kindle
- As a $19.98 subscription
- Or a $.99 single issue
Is any one of these models going to "prevail" over the others?
This analyst thinks not.
It's entirely possible that a fresh, politically engaged publication can grow to be wildly successful by nurturing a devoted and paying reader base. It's almost certainly a better path than emulating an aging, advertising-supported "everything for everyone" model still executing the SEO strategies of yesterday. Writing that's done for the machine isn't as good as writing that's done for people.
Media companies exist to serve a community of readers, and communities, like people, are all different. No two communities, no two people's media needs are exactly alike, and there is room for many different types of solutions. Indeed, the barriers for entry are so low, there are so many emerging possibilities for revenue generation, and there are so many people ready to leap into the gap when a company scales beyond connection with it's readership, that it seems doubtful a single revenue model will ever reemerge.
For publications that do accept advertising, it is perhaps more important than ever to ensure the appropriateness of the marketing to their readership. Achieving a state of deep and meaningful rapport with consumers is one of the healthiest places for a company to be. Maintaining that state will almost always ensure a regular supply of supportive customers.
Sam Dwyer is an Analyst based in Econsultancy's New York office. He can be followed on twitter @sammydwyer!
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