Community Monetization by Flexible Subscription

In Community Monetization: Name Your Own Subscription, blogger Scott Burkett describes the reasonably successful monetization of a community using a “name your own subscription price” approach. Members paid what they could afford or wanted to pay, even nothing at all. This community had failed to generate enough advertising revenue to break even, and the flexible subscription price more than covered the gap.

Ultimately, the subscripton model evolved into
a more structured system, with defined (and publicly identified) levels of membership and fixed subscription terms. Extrapolating from some of the stats in the post, it appears that only a percent or two of the active membership began paying, but even at that participation level the additional income was significant.

Burkett asserts that advertising in general, and Google’s Adsense in particular, won’t make a community profitable. I know community operators who do quite well with ads, although most agree that click rates are much lower than for static content pages.

I think one of the keys to the success of the flexible subscription program described in the post was structuring it much like a traditional subscription program. Compared to a weak “Donate” button that would probably be used by a fraction of one percent, presenting signups with various paid options, as well as an unpaid one, no doubt increased the percentage of paid members. In addition, publicly showing the member level adds a bit of pressure for those individuals who don’t want to appear cheap to their peers. (On the downside, making the contribution level public might prove embarrassing to members unable to pay and could be a disincentive to participation in the community.)

Interestingly, there didn’t seem to be a basket of benefits associated with paid memberships in Burkett’s community. When the monetization topic is discussed in the Community Building and Social Networks forum at WebmasterWorld, community operators often describe some of the things they do to reward paid members: private forums or other private site areas, larger message storage, bigger avatars, etc. (The WebmasterWorld community itself has a very active forum available only to supporting members.) It would seem likely that strategic benefits associated with paid memberships would further enhance the signup rate.

In todays world, where targeted traffic is once again in demand, monetization of communities may be getting easier. It’s good to think beyond ads, though - memberships may not only provide revenue, but stickiness and loyalty as well.

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