You may well be familiar with the publishing term “rivers of gold” referring to the cash cow that has, up until recently, been print classified and/or directory business models.
Essentially these businesses lived up to this phrase by having a monopoly or at least majority market share of those fast turnaround, low production level advertisements that advertisers were prepared to pay good money for due to their publishers unparalleled reach and subsequent success rates.
Think Yellow Pages, Fairfax, News Corporation and any other publisher of local newspapers.
Never has the term “cash cow” been more appropriate as publishing moguls and corporations cashed in on their massive market position and reach.
But with new technology comes new methods of disseminating information and far lower barriers to entry than ever before.
Blink and you’ll miss your new competitors
All of Seek, carsales.com.au, Realestate.com.au, iTunes and even Google have managed to gain invaluable early mover benfits by taking advantage of the fear and sloth of their old media incumbents.
These shrewd operators have had the likes of previously untouchable Rupert Murdoch pulling their hair out trying to work out how to replicate their formerly unassailable business models in an online world.
Could it be that this is one medium that Rupert has been too slow or old-fashioned to fully understand?
But with threat comes opportunity. And that opportunity may be more suited to you as a specialised small business operator than a multi-media corporation.
Over the next three Internet Secrets blogs I’m going to examine these new “rivers of gold” and try to uncover some opportunities for Australian small businesses.
In this part 1 we look at subscription revenue
In the old world, about the only way to earn passive income streams from your expertise was by being prominent enough to write a successful book or appear on a infotainment television program or documentary.
Once again the web has changed all that.
Low barriers to entry now mean that with only a modest budget, you can self-publish and advertising online and in the process earn new streams of hitherto impossible passive income.
While much valuable online content is given away as a ‘loss leader’ so as to attract prospect into buying a product or service, or selling accompanying advertising, there are many instances of customers paying good money to access premium content.
Porn and music – the pioneers
One of the non-pornography pioneers of this approach was 70s pop performer / producer whiz Todd Rundgren – best known in Australia for producing the massive Bat out of Hell album for Meatloaf. Or was it Meatloaf that was massive?
As far back as the mid-90s, Rundgren was of the opinion that many musicians could bypass the traditional record company model by offering their work via a subscriber based website. This work included his vast catalogue of music and video made available by special “jukebox” applications, unreleased recordings, exclusive chats, master classes, live webcasts and much more.
While the service was probably way before its time and Rundgren went back to making music instead of building websites, his legacy is that he was among the first to prove that you didn’t need a corporate marketing and distribution company to make good money from subscriptions.
Before you can say “but I can’t play a note” and I’m not even much chop at karaoke, you may well have more in common with Rundgren than you suspect.
The point is, no matter what the exact form of the material is, it is simply “content”. Valuable audio-visual, community and other material that people are prepared to pay for.
And if you or your business work in a specialised field where expertise is at a premium you may well find yourself with a potential subscriber revenue stream.
So what can I offer?
There’s no doubt that the more written, recorded or created content you have, the more you have to offer prospective subscribers.
But with some imagination you may well be able to come up with a package of benefits people are prepared to pay for.
To address the broad need for ongoing online help and information, I have been planning my own subscriber package for some time.
Here are some of the benefits in the pipeline:
Monthly teleconference: Every month I hook up with the client (by Skype if long distance) for half an hour to examine the success of their website and eMarketing tactics. An online agenda is kept and maintained to ensure all actions are adhered to.
Webinars: Once a month we will provide a webinar featuring a guest interviewee – someone who has had success online, or is an expert in their chosen field or who has a new technology or service.
Resource centre: A stockpile of articles (mine and others), links, video, audio and other material of value to subscribers.
Discounts: Discounts to events or to products like books, DVDs and other subscriptions.
Regular support tickets: Many online issues can be resolved within 10 minutes, so subscribers get an email or phone help voucher for this purpose.
These are just a few ideas but with some thought you may well be able to come up with a range of others that are pertinent to your business.
What should I charge?
To ensure you can cater for different budget levels (and hence maximise sales), you can create different packages containing combinations of these benefits.
Rather that create cost barriers that prevent prospects joining, it’s best to package your subscriptions into bite size monthly or even weekly payments. Unlike large subscription fees, these can be small enough for the subscriber to hardly notice they are being withdrawn.
To enable this your bank can provide a special direct debit authorisation form that subscribers can complete to debit your chosen account.
The market will soon tell you what they are prepared to pay for your expertise. And given that is not set in stone you can experiment with the price points, value-add and so on.
What do I need to do it?
This is actually the exciting part.
Declining technology costs mean that a subscriber-capable website are now within reach of the smallest business.
Once you have the content, all your website needs are the following capabilities:
Content Management System: To keep content fresh and regular, you will need to add your own written or audiovisual content to the website in all of its forms (PDF, video file, podcast, etc).
Extranet: To ensure your high value content is kept away from non-paying eyes and fingers, you will need an extranet or password protected area. Good extranets allow you to provide different levels of access for different individuals or groups, which enables your standard, super, premium offerings.
Email marketing system: It’s important to keep in touch with your subscribers in a personal way and a good email marketing system will enable this.
Secure shopping cart: In case you do want to offer once-off subscriptions or even sell short-term subscriptions to webinars and so on, you will need a secure shopping cart.
These are the fundamentals, but depending on your offering you might also need webinar capabilities, forum and comment widgets and so on.
Up until relatively recently most of these capabilities were beyond most small businesses but these days can be attained on a “software as a service” basis for less than $100 a month – a small investment given the income streams they can provide.
And if you need help with the more strategic and planning components, you may need to enlist the help of an online marketing or business consultant.
Either way, it’s worth exploring subscriptions to see if there are ways you can create the passive income streams we all yearn for.
Got any other ideas that can make up a subscriber pack? Let’s hear them below.
Next week: your “mailing” list
For more Internet Secrets, click here.
Craig Reardon is a leading eBusiness educator and founder and director of independent web services firm The E Team which provide the gamut of ‘pre-built’ website solutions, technologies and services to SMEs in Melbourne and beyond.
Smart Company is the leading online publication in Australia for free news, information and resources catering to Australia’s entrepreneurs, small and medium business owners and business managers.
