Each subscription website business model we write about has a distinct combination of characteristics
When Mequoda writes about subscription website business models, we always include a chart that outlines eight different characteristics of the different models. As far as we know, we’re the only ones writing at length about publishers’ website architecture, much less going into so much precise detail.
But we believe that understanding the distinctions between each online revenue model are critical to the success of any publisher, and since we’re in the business of providing guidance to those publishers and building their website systems, we need that kind of precision. After all, website architecture is critical not just because it makes it easy for users to navigate their way to your premium products, but it also helps deliver new customers even while you sleep … as long as you’ve chosen your website business model carefully.
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The chart looks like this, and each subscription website characteristic is measured against one another:
| Who Pays | MIU | Frequency | % UGC | Authors | Browse/Search | Homepage | Video | |
| Portal | Sponsor | Post | High | Moderate | Many | Search | Varies | Sometimes |
| Magazine | Varies | Article | Low | Low | Many | Browse | What’s new | Sometimes |
| Newsletter | User | Article | Low | Low | Few | Browse | What’s new | Sometimes |
The niche publishers we serve don’t have as many resources to support them as mass media publishers do, so they can’t afford to make mistakes, choose the wrong business model or muddle different models together as so many of those big players do every day. We know that the most profitable websites are those that have been carefully planned for maximizing organic audience development and monetizing your members, not just those that look pretty and are plastered with random content.
So in order to help us define the different online revenue models, we’ve identified those eight characteristics that we believe define each model. Unsurprisingly, those characteristics have changed over the years as website business models have evolved; among other things, we added new ones as their importance became apparent to us, such as this year’s addition of video, which is becoming more prevalent now than it was when we first started following these different models over 10 years ago.
The purpose of identifying these characteristics – and formally studying information architecture, as our Don Nicholas and CTO Aimee Graeber have – is to know which functions of a website work well with one another, and, of course, to know which ones don’t.
For example, if you decide to create a magazine website, whose purpose is to allow subscribers to access issues of the magazine, you wouldn’t want your website taxonomy to force subscribers to search for content, because magazine readers are accustomed to browsing their magazines. They don’t want to have to guess what you’ve published and search for it! Bad website design is a recipe for failure.
And as you may have noticed, each of our three subscription website online revenue models has a unique combination of these characteristics. One or two of them share some features with each other, but none share all of them. And as I said, combining some of them makes for very bad business indeed.
In short, these characteristics can either define your business and help you make money, or they can sabotage your best efforts. Here are the characteristics we believe are critical to each online business model, and how they work together to create profitable publishing websites.
The eight characteristics that define Mequoda’s website business models
| Who Pays | MIU | Frequency | % UGC | Authors | Browse/Search | Homepage | Video | |
| Portal | Sponsor | Post | High | Moderate | Many | Search | Varies | Sometimes |
| Magazine | Varies | Article | Low | Low | Many | Browse | What’s new | Sometimes |
| Newsletter | User | Article | Low | Low | Few | Browse | What’s new | Sometimes |
Who pays
The first characteristic we look at in defining a website is who pays for the content. That is almost always either the users, such as subscribers at magazine and newsletter websites, or sponsors, that is, advertisers, who support content for the free use of a portal’s visitors, seeking the views those users represent.
Of course you may know that all Mequoda systems include a free portal in combination with another model, and some of our clients don’t sell advertising to third parties, but we consider those portals to be supported by the publisher as the sponsor, in the interest of organic audience development.
Minimum information unit
At Mequoda, we talk a lot about your minimum information unit, or MIU. Its importance in content marketing is undeniable: It’s the piece of content you can use as a magazine article, book chapter, the portal post that Mequoda clients optimize to drive website traffic and even the free e-book that our clients give away to those random visitors in exchange for an email address.
The MIU is the golden egg of a publisher’s business, and it must be delivered to consumers in a way that’s simple, functional and convenient for users – and one that drives revenues and satisfies the publisher’s business goals. That’s why it’s one of the most distinguishing characteristics we review when defining a website business model.
The MIU is the basic determiner of your online revenue model. They’re different for all the models except the magazine and newsletter models, whose MIUs are articles. Of course, if you have more than one type of MIU, you can build a website for each. An example of this is Harvard University Law School’s Program on Negotiation, which has both a newsletter, event and retail website, because the program publishes a newsletter, hosts numerous events and sells books and training materials.
Frequency
This characteristic tells us how often a publisher posts new content on the website. Magazine and newsletter websites are both low on this scale. This schedule is dictated by their status as subscription websites, where users expect content to be pushed to them on a regular basis. Portals are also subscription websites, but because their function is to drive traffic with optimized content, they must have a high frequency of publication. This also serves, when used as a companion to any of the other models, to keep users engaged.
User-generated content
User-generated content is an indicator of user engagement on those sites where it’s desirable and encouraged. That starts with the portal, where Google judges content quality not only by optimization, but also by the number of comments. UCG at a portal is usually of moderate volume, though the higher you can get it, the more Google will love you.
By contrast, users don’t provide much content on magazine or newsletter sites, where the content is generally behind the paywall, reader comments and high Google ranks are less important, and subscribers are paying for the publisher’s content, not less valuable user-generated content.
Authors
Another area where we see discernible differences between these online revenue models is the number of authors. Due to the nature of the newsletter form of journalism – long-form, in-depth and expert – it is the only difference between the magazine site and the newsletter site. Magazines rely on many authors, while newsletters are written by only a few, or even one. If a publication were to morph from few authors to many, with lots of short articles, it may become a magazine site. We don’t necessarily recommend this, given the much higher subscription prices readers are willing to pay for the in-depth expertise of a newsletter author!
Browse/search
As I mentioned above, if you set up your website with the wrong navigation, the results could be ugly. Of course all sites should have a search function, but if your users expect to browse, as they do their print magazines and newsletters, you’ll want to make it easy and intuitive for them to do so. At a portal, on the other hand, users expect to search for topics of interest, so give them a navigation bar with the information they need to find it.
Homepage
Once again, getting this one wrong could be fatal. While all Mequoda sites rely on portals to first attract new users, very often after that users will return to the homepage of the site to start a new session. And if you’re a magazine or newsletter website, they had better see a heavy focus on what’s new, because that’s what they’re there for.
Video
Our newest characterization is one that, for the moment, is in flux. All of the online revenue models in our universe may or may not offer video content at the moment; eventually they may all offer it, rendering the video category moot.
We’ve changed, added to and deleted characterizations over the years as website information architecture has evolved, so we’re always open to other opinions. If you have another view, or a specific example of a website that challenges or confirms our characterizations, please tell us in the comments below.
