Wow, that's a 99% reduction in their hosting costs!

Nothing to be sneezed at. Better to make a small profit than a large loss, I say.

Posted by: Eric Scheid on October 9, 2002 03:42 AM

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I think one of the problems here is that the sites which introduce charging lose sight of the fact that their visitors could quite easily go elsewhere, and that elsewhere might be free. You really have to have very strong brand loyalty to induce visitors to subscribe when there are other sources of the same information, and it doesn't surprise me that only 1% of their regular users are that loyal. Off hand, I can only think of one site I'd be prepared to subscribe to, and that's the Guardian website. Even then, I'd want access to all their subsidiary sites and I'd want advertising removed.

Having said that, it surprises me that only 1% of FT.com's users have subscribed. This is the bible of the upper reaches of British industry, and the site provides access to all sorts of business intelligence which many of the FT's readers would presumably find essential to their day-to-day existence. It's specialised enough that I would expect a much higher conversion rate.

Posted by: Alan Fisher on October 9, 2002 06:01 AM

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Great article.

I think "loyalty" is one of the ingredients. I also think the material needs to be something that's either very hard to find or, in fact, unique. Another ingredient would be the usability of the site, but that probably factors a bit lower in the mix.

I haven't seen anything regarding long-term renewal rates, have any of you? Unlike print, someone (somewhere) should be able to track site usage and compare *that* to renewal patterns. That would be most interesting.

Posted by: boysen on October 9, 2002 10:12 AM

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I, too, was surprised to see the conversion rate was so low, and yes, it does stand to reason that attrition is high because there is free competition out there. Unfortunately, one can't even compare it to consumerreports.org, which has unique content, because it started out as a subscription model in the firstplace.

The loyalty question is a good one... The denominator is simply monthly unique visitors, but how many of the monthly visitors were repeat visitors anyway? As of a year ago, Nielsen NetRatings wasn't offering that metric without asking for a custom analyis, so I don't know if anyone really had a good grasp of that.

We could be faced with a lot of butterfly traffic on our sites, and if true we should lower our expectations of what we might be able to convert.

But all that being said, yes, even if it's only 1%, it's better to have the money than not. And I also think it's better to have your efforts seen and read by those who really care about it. As Samuel Johnson observed, "what we read with inclination makes a much stronger impression."

Posted by: Frank on October 9, 2002 11:03 AM

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I didn't quite understand why this author was so down on subscriptions. Why is 1% a "woeful" rate? Compared to what, the past 100 years of web publishing? Maybe 1% is, and will always be, the average conversion rate in this industry.

For me as a Salon subscriber, subscribing was a choice. I could either "pay" by viewing annoying popup ads, or I could pay with cash and avoid ads (and get access to the extra articles and MP3's, etc). Sure, the other 99% of people would rather view the ads and not pay cash, but Salon gets revenue either way. What's the problem with that system, and why is it somehow Salon's fault?

Posted by: Jim Mammy on October 9, 2002 03:22 PM

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