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March 27, 2013

How to Monetize Your Content in 2014

What will the future of content monetization look like? Are we forever stuck with an ad-based, privacy-encroaching business model (ala Facebook)? Does the failure of NewsCorp’s “The Daily” mean fee-based content is dead? What is the trend and how can you profit? These are the questions I want to answer in this article.

I’ve been thinking about content monetization a LOT lately. Not because I’m weird, but because that’s what the company I work for (WishList Products) does… at least in my eyes.

Right now, we call ourselves a membership site plugin, but let’s be real… our software does a lot more than pure membership site functionality.

To me, a “pure” membership site is one with a recurring fee that publishes ongoing content. WishList Insider is a membership site.

And, this is what WishList Member was originally built around… and something it does VERY well. But, it’s not all it does.

For example, WishList Member lets you set up products that can be purchased with a one-time fee… e.g. I charge a one-time fee of $19.99 for lifetime access to my PHP5 Decoded Program at LearnPHP.co.

Nothing about that says “membership site”… not in “pure” terms.

Or, how about the Pay-Per-Post functionality in WishList Member? Paying a one-time fee for access to a single post. Again, nothing about that says “membership site” to me.

What it DOES say (read: scream) to me is: “Content Monetization”.

All of these things, including a pure membership site, are ways of monetizing content.

But, who cares? It’s just semantics, right?

I don’t think so. You see, the web is in a state of trying to figure out content monetization right now. The traditional media models that worked in print, radio, TV, etc… don’t work as well online. And, frankly, I think the current model is broken.

Think I’m kidding? Consider that News Corp spent 10s of millions of dollars testing a new method of Content Monetization (news, in this case).

They created the first iPad only subscription-based news service called “The Daily”.

And, after a couple years of losing 30M annually, they finally shut it down.

Now, why would such a large news and content company spend that much money testing a new model if the current ones were working great?

Remember, NewsCorp is the company that owns massive news and entertainment companies like HarperCollins, the New York Post, the Wall Street Journal, GQ, Vogue, all the FOX variations, and more. And, they are the world’s second largest “media” group in terms of revenue.

So, again, why would they risk millions of dollars testing a new content monetization model?

I think it’s because they see the writing on the wall. As I said before, I think the most popular content monetization model is broken and unsustainable over the long-term.

What is that model and why is it broken?

It’s the advertising model. You get a bunch of people to visit the pages on your website and advertisers pay you to run their ads on those pages.

Most big websites charge per impression (pageview) not per click… so, the more people you get to visitor your site the more money you make.

Seems perfect in theory.

You can focus on writing high quality content on a regular basis which your readers love… and you continually build your traffic over time and allow advertisers to gain exposure with your audience which they love… and you make a steady income without having to “sell” anything… which you love.

Win-win-win. Everybody’s happy.

Except it never works that way in reality. Instead what happens is you become beholden to your “sponsors” (people paying you to advertise on your site)… and all they care about is exposure. They want pageviews.

You want to keep your sponsors happy and keep the money coming in so you start to focus more on how to generate pageviews… and you quickly realize it doesn’t matter if people actually read your content… only that they VIEW it.

You get paid for the impression whether someone actually reads your article (views your video) or not. And, this has dire consequences.

You end up spending more time writing the headline for your article than you do the article itself.

You could care less about the accuracy of your article as long as it is something that will generate controversy… and thus pageviews.

In the end… instead of peddling wholesome fruits and veggies to your readers… you sell them crack… and could care less how the rest of the world is affected as long as you get yours.

You don’t need to look far to see this actually happening. Look at any of the major news sources out there and you’ll see it’s all about drama.

You’ll see cleverly crafted headlines designed to generate the most dramatic response… coupled with articles that have little to no substance or, in many cases, completely refute the article’s headline.

It’s a “click-culture” designed to get clicks… not inform readers. And, it’s driven by the business model that’s used to monetize that content.

But again, who cares?

There’s a moral argument to be made here, but that’s not MY argument. Mine isn’t that you should care because it’s wrong and we need to do something about it (although, we DO)… my argument is that it’s NOT sustainable. It’s going to fall apart.

Why?

To use our analogy… if you feed an addict enough crack, they’ll eventually die or clean themselves up.

People will (and already have) figure out what’s going on and there will be backlash. Need proof?

Easy. Just ask the next 10 people you meet what their opinion of the news media in the U.S. is. Unless you’re at some sort of conference for journalists, you’re going to get negative reviews from the majority of those 10. In many cases, “passionately” negative.

As it stands now, most people don’t read the news from a particular news site (CNN, HuffPo, Washington Post, Wall Street Journal, FOX, etc) because they LOVE that news source and believe it’s honest, informative journalism… they do it because the headline is so enticing they can’t resist clicking through.

This is going to change.

We’ve already seen the rise of alternative media on the web… media that focuses more on real journalism and honest reporting.

This is part of the backlash that’s happening. And, it’s going to continue. And, it’s going to mean big trouble for the big media conglomerates that don’t adapt.

And, THAT is why NewsCorp spent so much time and money testing a new business model. Because, they see the writing on the wall.

Now, you might say… “But, The Daily failed. Doesn’t that give credence to the idea that the current model is the only workable one?”

In a word… NO!

Just because someone executes poorly on an idea doesn’t make the idea bad. It means the way it was implemented is bad.

While The Daily was losing millions of dollars/month… there were thousands (probably hundreds of thousands) of smaller publishers making tens of thousands (in some cases hundreds of thousands) of dollars per month… those same months.

And, for me, this is where things start to get more difficult.

Because, I see WishList Member and technology like it as a potential solution to a much broader problem.

The web, as a whole, is trying to figure out content monetization… meanwhile, we have tens of thousands of customers who already have it figured out and are making money hand over fist SERVING their members.

And, they’re doing it with more than just the traditional “membership site” model of content monetization.

Yet, I agree with people like Gary Vaynerchuk who believe content is more and more becoming a commodity… meaning the days of selling $2,000 online courses are coming to an end.

So, on one hand, we have big media corporations “selling” garbage content for pennies/click… and, on the other, we have smaller, well-known individuals and companies selling higher quality content for 1000s of dollars.

I think we end up somewhere in the middle.

And, it’s where I think software like WishList Member has a tremendous opportunity for growth. I think, right now, we see ourselves as “membership site” software and our feature-set reflects that. The way we make decisions reflects that.

We’re doing what we’ve been taught to do. Focusing on a specific niche and serving THAT niche. Not trying to be everything to everybody.

Yet, our customers tend to push us outside of that specific role (which is why we even have one-time fee and pay-per-post capabilities)… because our customers aren’t just building membership sites… they’re monetizing content… and they need the tools to do it.

So, what does a company like ours do?

There’s a Grand Canyon-size difference between seeing yourself as a “Membership Site Plugin” and a “Content Monetization” platform… a lot of which I talked about in an earlier post about platforms vs plugins.

And, the thing is… we’ve seen this before.

This is exactly the kind of disruption we saw in the music industry when Napster hit the scene.

And, it completely revolutionized how consumers saw themselves consuming music. Apple with iTunes was the first to really capitalize on this change and we saw how well that worked for them.

Who will be the first to really capitalize on the change happening with informational content? I don’t know, but I hope it’s us.

(photo by bookgrl)

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