Subscription Attrition

Some thoughts on subscriptions, stability, money, and scalability of the problem.

I’ve been running this site as a “member” supported site since July of 2012. That’s what I call my subscription based, paywall model, a member-site. I’ve tried a lot of different methods to what I charge for, over the years, so I know a thing or two about subscriptions. I’m not selling software, but the consumer mindset on most any recurring payment is similar across the aisles. I’m sure Amazon could tell you some amazing stories about people being unwilling to use ‘Subscribe and Save’, but we are going to have to wait awhile for that TED talk.

When I first started thinking about subscriptions, I had to try and guess at how many people would actually pay for something they previously got for free. I had no clue how to start this guess — there’s basically no good method. Page views and unique visitors seemed like a bad place to look, as did followers on social media. So instead I went to RSS subscribers. I figured they were among the more interested and loyal people. I had about 12,000 RSS subscribers at the time.

So I then figured I would get somewhere between 5-10% of them to convert. Hey, that math worked out nicely and I felt pretty good about it — mostly because that seemed like great money. The reality? 2.5% or fewer conversion, but only after a year. It hurt. And even though I still allowed people to read everything, mind you with a delay, all my other analytic numbers tanked (50% drop overnight). Turns out, people really get upset when you throw up a paywall and ask them to pay you recurring money.

It felt like, by moving to subscriptions, I had killed the thing I loved.

Tons of people were pissed. I received daily emails about how arrogant this change was. “You might think you are the Wall Street Journal, but you aren’t.” Yeah, fun times.

And, no matter what I did, (adjusting the delay on the paywall, or getting huge recognition for an article on other sites) nothing changed the amount of members I had. I stayed just under 300 members for years. It never wavered in any meaningful way. On one hand this was great, because now I didn’t need to worry about anything — the site had stability. I could take breaks without fretting, and I never had to worry about chasing more members.

And then I stopped caring about analytics, I saw them as the thing affecting what I write about them most, so I dropped them. I knew that no matter what I wrote, my revenue wouldn’t change, so why not write only what I wanted to write? And I also stopped hearing people complain, and those who did complain had little effect on me — why do I care, my revenue is stable, thanks for your complaint but you don’t know me. I had found what must be my true audience for the site, these few hundred awesome people there to support my crazy endeavors to find “the best” things.

But all of this lead me to think that I should focus more on my members. I had been trying to walk this line of “fairness” — the idea that everyone should get to read my words, whether or not they pay. And that idea was holding back my site, because I was effectively asking people to pay for their impatience, or to support me out of the goodness of their heart. The value proposition was shitty. It wasn’t fair, so much as it was equal, and people don’t seem to think that’s a good deal. I can’t blame them either.

So when I decided to commit to my members, to give them something they could not otherwise get, on a regularly basis (weekly iPad Productivity Reports, videos, Best page) I made a stronger value proposition. And people took note, and again some were pissed, but whatever.

I doubled the subscribers, all the while eliminating most of the complaints and questions. Even if people complain, who cares? Those who don’t pay get more out of this site, as more members means a larger budget to buy, test, and review items — which is the core of the site. They also don’t have to wait, there’s just some things they don’t get to see.

Five years of running this site as subscription based, has taught me three things:

  • It’s stable as fuck.
  • Either people will pay, or they won’t, but keep your focus on those who are paying.
  • You’ll make less money in the short term, but manage the cash less too.

This is why I don’t look at analytics. It’s why I write only about shit I want to write about. Why I turn down 90% of the review items, and instead spend my own money on “more interesting” things to review. My only focus on the site is writing what I want to write. That seems to work well.

Not Scalable

The one thing I beat the drum about, any time I get to talk about my subscription model to other bloggers looking to do something similar: it’s not scalable. I don’t mean that this site can’t handle a lot of members — we should totally find out though — but I mean that the web in general cannot handle a ton of subscription based sites.

This site is $4/mo or $40/year — how many sites could you afford to pay for before you simply cannot justify it? It’s the magazine problem all over again — sure there was a lot of great magazines in the late 90s, but you could only subscribe to so many because $19/29 a year really adds up quick. Even if websites like mine were $1 a month, there’s still a ceiling on how many sites most people can pay for. Don’t equate this shit to coffee either, because there’s both a limit on how much money you can spend on coffee and how much coffee you can actually drink in a day.

The reality is, I made the move in 2012 so I would be there before anyone else. So that if you subscribed to my site and others followed, you would have to choose not between my site and another, but you’d have to choose giving up my site for another. That choice weighs ever so slightly in my favor — but luckily other publishers have figured out how to scrape by on advertising. At least for now.

We simply cannot have every site be member supported before we burn out that member pool. Likewise, all current advertising models are broken. I’ve long felt that the most viable way to make money on a website is affiliate links, they seem like the biggest win-win — however they don’t pay well. Even on a site like this, where I am writing about a lot of shit with affiliate links, I only make between $200-400 a month on affiliate links. It’s not stable, or sustainable — rarely does it even pay for the expenses of this site a month.

I don’t know the way forward, but I do know that subscriptions aren’t added to make more money — often you lose more money in the short term, with the payoff being stability in cash flow. So the next time you see something move to a subscription based model, know that they just turned away money, in favor of trying to stay in business for a lot longer to do what they love.

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