Those of you that follow this blog know that in the past, premium membership sales were a huge earner for us. Between 2007 and 2008 premium membership sales alone amounted to over $90,000. Several months alone premium membership sales generated upwards of $10k.
But in order to successfully generate long-term (lasting) income with premium content sales you must have content that a customer/member is willing to pay for. Generally this means content that cannot be found anywhere else and is of real value. If you can’t provide that high-quality content, you’re basically ripping people off, and/or reduced to tricking them into purchasing your ‘premium’ content which is not good for business and opens a whole other can-of-worms to deal with (refunds, complaints, etc).
For a long time GrownUpGeek.com had that certain type of content that could not be found anywhere else. Mostly this was tweaks and loopholes that allowed Myspace users to view the content of other Myspace member’s pages that were marked as ‘private’ or un-readable. But as far back as 2007 I began to realize that because one day Myspace would no-doubt make this no longer possible (ie; they would someday hire some real programmers and fix all of their gaping security holes), I would need to come up with a better long-term earnings strategy. I could not continue taking people’s money in good-faith knowing that I did not (or soon would not) have anything of value to give in return. Also, seeing the amount of ‘copy cat’ sites popping up faster than SwineFlu cases as well as the amount of “stolen” information copied and pasted from our site to other sites made it even more clear that this just was not going to work in the long-term.
At the end of 2008 after seeing premium content sales steadily drop, after constant problems with PayPal and GoogleCheckout, after growing tired of customers that were unable to read the agreement they were agreeing-to when purchasing a premium membership or just outright lying for refunds, after getting sick of other websites copying & pasting our premium content (a nice way to say ‘stealing’), or worse making sad (and sometimes humorously lame) attempts at copying/ripping-off the entire site (if imitation is the sincerest form of flattery then we must be doing good!), and seeing the amount of new good, premium content steadily drop, I came to the conclusion that for long-term success we had to focus on FREE advertiser supported content. After realizing these truths, we stopped accepting premium memberships, stopped focusing on our ‘premium’ forum content and started focusing on building content in our free/open forum areas.
Sadly, shorty after all these ‘executive decisions’ of mine, the economy tanked, along with advertiser ePC/eCPM (and overall earnings), but traffic has continued in an upward trend and finally in the last few months eCPM (earnings) are creeping back up to pre-economy-bust levels.
The future and the past are in advertiser revenue
IMHO, free, advertiser supported content is where the future is. Actually, it’s where the past is. Most websites (the vast, vast majority) generate income from advertisers, some generate income by selling products or services, and only a tiny fraction of websites actually generate income by ‘selling’ content. Television learned this decades ago – you CAN make money by giving away your content if it’s tastefully sprinkled with advertising. Sure, there will always be HBO and Showtime, but unless you can sustain a high volume of high-quality content like HBO and Showtime, ‘free’ is the way to go. With this in mind, in the last year we have gotten back to our roots and generate income the old-fashioned way: placing a limited amount of advertising on pages viewed by anonymous visitors (once someone becomes a free member, virtually no ads are displayed).
Concentrating on building good content or providing a good, free service (aka Facebook, Twitter, etc), not going overboard with the popups or ads (you’ll just piss-off people), giving visitors a reason to come back, and building traffic will generate steady income. Taking money from someone without giving true value in return cannot result in long-term success.
Update 2013: Advertising revenues have risen back up above what they were in 2007 and are often out-performing premium membership sales. As predicted not only did the premium Myspace content dry up, but so did Myspace! Even though this was a very difficult decision to make in 2009, looking back I can safely say it was the right thing to do.