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Strategic analysis
What is the Best Monetization / Subscription Model?

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Written by on June 1, 2017

The most frequent question I get from my clients is "what is the best monetization/subscription model"? And it sounds like such a deceptively simple question with an equally simple answer.

The reality, of course, is very different, because there is no single answer to this. The reality of the world we live in today means that the best depends on what's best for you.

But there are some fundamental things that have changed, and that's what we are going to talk about in this article.

First, let's talk about the trends.

Free traffic vs paid traffic are now two completely separate markets

One of the most fundamental shifts is that free and paid-for content are now worlds apart. As a general rule, any content that is optimized for 'free' is also exactly the type of content that people would never pay for.

We see this all the time on Facebook. Every single day you come across hundreds of posts, and while they might get your attention and even get you to click on them, they are also exactly the type of content that you would never even consider buying a subscription for.

This has a really profound impact on the market, because it means that the advertising driven world of clicks and views is now a completely separate market from the premium paid-for market.

For instance, if you have a magazine and you are struggling to get enough traffic to grow, there is a very strong temptation to start publishing simple articles optimized for Facebook (like listicles). And while that might give you more traffic, you are also telling people that you are not worth paying for.

I have seen this on several occasions. I have seen magazines focus on getting more social traffic, only to experience a subsequent drop in subscriptions.

Just think about how crazy that is. We have so completely polarized the market of media between social crap and premium value that there is no longer a middle market.

You are either in one or the other.

This is a problem for most legacy publishers, because almost every newspaper or publication today exists somewhere in the middle. You are not truly optimized for social traffic, and you are also not valuable enough to be paid for.

You are exactly at the point where there is no longer a real market to be found.

This is an entirely new dimension of media that dramatically shifts why we consume content, and whether that content is worth paying for.

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Thomas Baekdal

Thomas Baekdal

Founder of Baekdal, author, writer, strategic consultant, and new media advocate.

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