Consumer revenue: A primerBetter News,
In some ways, consumer revenue is the simplest and oldest business in media: readers pay you directly for your service.
Understanding it and doing it well, however, are not one and the same.
In a world of brutal competition for our readers’ attention, that simple value exchange between reader and publisher requires the publisher to relentlessly focus on the job it does for its audience. Knowing what job you need to do and for whom are the foundation for building a consumer revenue strategy, no matter what form it eventually takes. (For a fuller explanation of how to get to the audiences most important to your news organization, see Table Stake #1: Serve Targeted Audiences with Targeted Content).
This is what makes consumer revenue strategically interesting: it focuses your mind around your readers and what they need, putting your audience insights into practice in service of your organization’s greater goals.
At best, a focus on consumer revenue represents a commitment to be deeply focused on your readers, learning about them and from them continuously to improve. Done well, this will have implications from the way you report stories to the way you plan for your business over the long haul.
At a minimum, though, consumer revenue represents strategic diversification away from the bulk of publisher revenue today: advertising. In a world where digital ad revenue is increasingly dominated by platforms like Facebook and Google, a direct link to readers is a strategic necessity — but not a silver bullet. (Read more about revenue diversification in Table Stakes #5).
Practically speaking, consumer revenue can take many forms, namely: subscriptions, membership and donations. And while these three types of consumer revenue serve unique audience needs/interests, the discipline required to execute each is very similar. (There are many other ways to directly monetize audiences such as e-commerce, affiliate fees, paid events, and more).
But effectively delivering consumer revenue is incredibly complex: It requires skills and capabilities that aren’t always found in traditional news enterprises such as digital testing and optimization; understanding and calibrating the “funnel” from reader to customer (see Table Stakes Chapter 4 for more on this); obsessing over user experience; and analyzing and interpreting complex data sets.
Consumer revenue strategies of any type set the expectation that your content, product or service has value. In this section of Better News, explore how you can make good on that expectation.