Fortune Should Be Charging More and So Should You
Also, don't over-complicate your subscription + podcasts as engagement
|Jacob Cohen Donnelly||Dec 13, 2019|| 2|
Happy Friday everyone and thanks for your comments earlier this week. Before we jump into the issue, consider sharing and subscribing!
This topic is an important one for me because it’s something I am currently working on here at A Media Operator. I’ll announce in more detail in the future, but I am going to introduce a paid subscription to this newsletter.
When I think about that, there are two primary factors that have to be taken into consideration.
The first is what you are all going to get. How do I ensure that I am providing value to readers? I believe value will come with my writing, a community and other ideas that I am working with. My theory is that I am doing a good job here.
The second is what you are going to pay for that. How much should I charge for the value that I am providing? This is harder. When individuals are subscribing, it’s hard to know how each individual values what they’re consuming.
Enter this tweet by Sam Parr, CEO of The Hustle:
Sam’s been working on his company’s subscription product, Trends by The Hustle, for about half a year now. For $299, you get access to a community of entrepreneurs and can learn quite a bit about various businesses.
Sam took his own advice and locked the entire site down behind the paywall and used strong sales copy to get the potential subscriber to convert. In my opinion, he just didn’t charge enough—I’ve seen inferior products sell for more and have a lot of people convert.
But what Sam was referring to was the recent news that Fortune was introducing a paywall. In a Digiday article about this, it was described as the following:
The first tier, priced at $49.99 annually or $5 per month, will give readers full digital access. The second tier, for $11 per month, will also include the print magazine as well as quarterly investment guides and early previews of Fortune’s list franchises. And the highest tier, at $199 per year or $22 per month, adds in access to the premium section of a new video hub filled with exclusive interviews with executives, business insights and instructional content, as well as a weekly research newsletter and a series of monthly conference calls hosted by CEO Alan Murray or reporters with specific subject matter expertise.
I believe Fortune is making a variety of mistakes here that are worth talking about.
Types of Products & Price
By introducing three tiers, I believe it will ultimately over-complicate the process. If you’ve ever subscribed to a newsletter here on Substack or on Trends by Hustle, it’s an incredibly straight forward process. Here’s what you get and here’s how much it costs.
Fortune, on the other hand, wants to offer options to users. It then needs to try and explain the various components of the more expensive plans. This over-complicates the sale.
Fortune is a more complicated business, though, than a newsletter here on Substack. Because they have a magazine, there is a standard practice to charge more for the print version than the digital only version.
I can’t help but wonder if they could try it a different way. Instead of charging $5 for digital and then $11 for print + digital, they could just charge $11 for a subscription to Fortune and then give users the option not to receive the print version.
Admittedly, I haven’t worked in print media before, but if the only difference in value between print & digital is the medium on which it’s consumed, there could be an interesting experiment to try.
That top tier product is actually really interesting. With additional research, monthly conference calls with the CEO and journalists and the dedicated video hub, you’ve got a high-value product targeted to executives and entrepreneurs. I would double the price on this because of the exclusivity. Research warrants a much higher price and with a brand like Fortune, I imagine they could charge at least $399.
Paywall seems weak
My other problem is that Fortune is introducing a very porous paywall and then hoping people will sign up.
According to the Digiday article:
It won’t be a hard paywall though. While there isn’t going to be a distinct split between how much content is behind the paywall versus free, the company said that all features and long-form journalism will be paywalled, as it is more expensive to produce. Additionally, stories that are popular for the site, like conference coverage, will be paywalled, but the edit staff has the ability to pick and choose articles they feel would drive readers to the paywall.
This is the exact opposite way to think about what you charge for and is a very internal way of looking at things.
Fortune is effectively saying, “because this content cost us a lot of money to make, you should pay for it.” But that’s not how you determine user value. The conversation needs to be, “what content is going to help our audience succeed at their goals?” That could be any content type.
One option would be to look at what TechCrunch did with its Extra Crunch product. Danny Crichton, former executive editor of Extra Crunch, said this:
With all those constraints and rules in mind, what we ended up centering Extra Crunch on was solving the problems facing founders in building their startups. That included how to raise venture capital, recruit talent, grow, pay themselves, work with PR agencies, and much, much more. I was previously a VC, and so I essentially channeled all the questions my founders would ask me into articles that solved those problems. Since launch in February, we’ve published about 600 articles on these topics.
Perhaps Fortune should be thinking about its content through two lenses.
Content that gets a lot of traffic, but is relatively low value from a subscriber perspective.
Content that helps a specific subset of the audience achieve their goals.
That second part is worth paying for. I would rather see Fortune figure out what types of content it creates that serve that purpose and then hard gate that.
This is the classic copywriting discussion that it’s not product features, but benefits that sell. A feature is that you’ll get to read long-form journalism. A benefit is that you’ll make more informed business decisions that will help you grow.
I know what I am willing to pay for.
Podcasts as an engagement tool
Changing topic a little…
In my last issue, I said the following about podcasts:
Have you been thinking about rolling out a subscription, but you’re not sure if you’ve got something that is 10x better than everyone else?
Now you do. If you have a small, but loyal audience, this is where you can make your podcast part of the subscription.
This is especially true if you’re very niche. It’s unlikely you’ll reach the scale necessary to earn much from advertising, but maybe it’s that special something that will keep your audience subscribed.
It appears that The Athletic is finding success with this exact strategy.
The World Association of Newspapers and News Publishers did a Q&A with Paul Fichtenbaum, Chief Content Officer at The Athletic. In that discussion, a little tidbit jumped out:
The Athletic has launched 140 podcasts since April (a number that’s likely to keep growing), and found that people who engage with at least one podcast during the free seven-day trial period are significantly more likely to sign up for a year-long subscription.
This makes sense. I’m a Tottenham Hotspur fan and The Athletic has a podcast called “The View from The Lane.” I can imagine a new Spurs fan signing up for the service would be more inclined to stick around to listen to it because it’s engaging.
Although we don’t know what percentage sign up, this lends itself to the overall strategy of using your audio initiatives as a way to get people to sign up and stay engaged.
Thanks for reading! If you have thoughts, be sure to hit reply. I would appreciate you sharing this with friends and colleagues that are working on building media businesses. And if you’re new here, be sure to subscribe. Thanks again and have a great weekend!