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A thousandth subscribers outweigh the ad model

You do not need many paying subscribers before the subscription model outweighs the ad model. That is why an increasingly number of publications and content makers have begun to charge for their content.

Since the Internet came and changed everything people making content have had fantastic times. The advertisement business model has given us unprecedented reach by enabling us to give away content for free.   

When ads now fails to fund us the problem is not the business model. The advertising model only follow expected market dynamics of cost vs. benefit and supply and demand. The problem is that we have learned consumers to expect they can get all content for free.

When ad revenues fall we have few options but to create more page views unless we introduce new revenue streams. And we have.  "Native ads" and content marketing has seen an exponential growth but has not changed the dynamics of the business model. It is still viewer based.

The collateral damage of free content is that the average quality of content has plummeted. Everything has become about the hunt for eyeballs and consumer data, and not so much about the publisher and content. In the hunt for more eyeballs and more ad exposures, combined with almost unlimited real estate, publishers have lowered their threshold on what they publish. It is free content after all. Let the readers decide what they want to read.

This low threshold has made many content makers uncertain of their content's intrinsic value. Are the most popular content the same content people would be willing to pay for? Are they reading my blog or listening to my podcast because it is free? Would everyone leave if I put a price on my content?

The answer is of course that many would but the question should be; does it matter?

What content makers must begin to ask themselves as the advertisement model is failing them is this; is it better to have a thousand paying readers that value my content and want to support my work, or tens of thousand casual readers who find my content interesting enough but not if they have to pay for it? 

Many content makers would be surprised to find that many people actually are willing to pay for quality.  It is uplifting to see how consumers online have responded to the reintroduction of the subscription model. People are willing to pay for content and support content makers that they find give them value.

The revenue numbers

It is impossible to to say exactly what revenue you should expect from the ads you run on your website but let us say you use Google's AdSense and  have a fairly good fill rate (the percentage of ad requests that get filled by AdSense) and in-view numbers (ads shown in the visitor's browser view).

If you are doing everything right you can expect a RPM (Revenue per thousand views) of $2 to $5. This is what media companies will say is at the low end of the scale and that is where most independent publishers and self-publicists are.

Let us say you are quite successful and have 100k visitors a week and they on average read 1,5 pages. That will give you 600' page views a month and an ad revenue of $1200 to $3000 (Number of page views   :  1 000  x  RPM).

Let us compare this to what you earn with a subscription based model.

If we choose the minimum price on Publicisto ($1 per month) you will need two thousand to twelve thousand plus subscribers to get the same revenue. However a dollar a month is a very low price. Your content is probably more valuable for your core readers than that.

Let us say you set it to five dollars a month instead. At that price you only need three hundred (0.003 percent) to sixteen hundred (0.016) subscribers to get the same revenue as you had with the ad based model and a hundred thousand visitors a week.

In other words; If you believe you can charge readers $5 a month you only need a thousandth of your page visitors to outweigh the ad revenue. That should be worth considering.

You can check out what you can earn if you publish on Publicisto with the revenue calculator.

 Photo by NeONBRAND on Unsplash