SUMMARY: Even if you love Garfield or Doonesbury, would you pay for a
subscription to see it when it is available at no cost on loads of sites all over the Web? uclick figured out a way to get people to pay happily. Find out how.
When the online content syndication market tanked three years ago, uclick, the net's largest distributor of comics and puzzles, began looking for alternate revenue streams.
No one thought subscriptions were worth testing.
COO Chris Pizey explains, "We thought, 'Oh my god, nobody's going to pay.' Then the ad market started to sink too, and we thought, 'What the hell.'"
uclick aggregates some pretty impressive brand names, such as Doonesbury and Garfield. However, if uclick slammed a you-must- pay barrier down on the content, it would always be available at no cost on lots of other Web sites.
How do you get people to pay for something they can get at no cost with a few mouse clicks?
"We had pretty low expectations," Pizey admits.
Because their expectations were so low, uclick started in December 2001 with a low-profile test. Instead of trying to sell famous name cartoons immediately, they focused on the puzzle end of the business.
"The gut feeling was it was more saleable as a subscription offering. It had a lot of good offline counterparts, there are a number of puzzle magazines and print newsletters," says Pizey.
Realizing that puzzle content is fairly evergreen, uclick began by creating a vast archived library of past items that had run on the syndicated network. It included more than 7,000 crosswords, card games, jigsaws, jumbles, etc. from more than 70 sources.
Then they gave it a brand name to appeal to the true puzzle fanatic, "The Puzzle Society".
The puzzle fan demographic is mostly 35+ and highly educated, so uclick tested a slightly higher-than-average annual pricing model for a consumer site, of $29.95 per year/$3.95 month-to-month.
Along with access to the site, subscribers would also get a quarterly PDF newsletter (they are sent an announcement via email and must click through to download the PDF). Pizey hoped this would keep site loyalty high by serving as a reminder of the great content it contained.
Because expectations were so low, uclick kept marketing costs minimal. They sent an announcement to members of their house list from a no-cost Web site they had been running for years.
Then Pizey began lobbying all Web sites uclick syndicated puzzles to in order to get them to market the subscription offer as well.
"Most people have pretty good puzzle traffic and they don't want to lose it. So we said, why not just market the paid product to your free users and convert a small percent of the real enthusiasts?"
Each site would continue to get the new puzzles at their regular price that their visitors could view at no cost. However, in addition, they could generate revenues by offering their puzzle-page visitors a co-branded subscription to the Society.
Partner sites could even sell ads on the subscription site pageviews their visitors generated, as long as the ads were not too interruptive (no Flash, no audio, no pops, etc.).
After watching Puzzle Society results for six months last year, the uclick team decided to go ahead and build a subscription offering for their comics archives as well.
"We have to come up a strategy for comics that was very different from puzzles," says Pizey. The ability to play around in a past comics library just was not hugely appealing to most consumers.
"We've been serving comics on the Web for years, so we knew in the past the ways to make money from comics online was to force visitors to take more clicks to get to them, because you wanted them to see ads. You get in the way of them reading their favorite comic a bit. They hate that!"
uclick's new subscription site, My Comics Page, was designed and promoted as a service. They were not selling the content itself so much as they were selling really easy access to it.
"The subscription is based on the ability to build your comics page the way you want it, in the order you want it, not the way a newspaper editor designed it. You can view your page online or we'll email it to you."
After reviewing expected server costs, uclick set pricing as low as they possibly could, at $9.95 per year, to compensate for the fact that it is so easy to get the content at no cost elsewhere.
At that price, it was not worth doing a month-to-month offer, so instead uclick tested an upsell: Offering a printed copy of a Calvin & Hobbes collection book published by a sister company for an additional $5.00 to "cover shipping and handling." (The book alone sells for $12.95 in stores.)
Fulfillment is decidedly low-tech for now. "Every Tuesday everybody here stuffs books into envelopes and prints off labels and sends them out."
Marketing the service was easier than the Puzzle Society because uclick already had a couple of million unique visitors per month to its original no-cost comics site at ucomics.com. They kept the no-cost site going, but added promotions for My Comics Page, and reduced the amount of no-cost content to just 30-days of archives.
uComics also had a permission email list of about 600,000 names. These were visitors who had requested that up to 10 different comics of their choice be emailed to them daily at no cost.
Pizey made a radical change for this, while sending email is pretty cheap, it is not cheap enough. He had alerts sent to the list over a six-week period telling everyone they would lose their service unless they re-subscribed to their choice of just one single comic per day at no cost, or an unlimited number of comics from the paid service.
"We weren't scared to purge email addresses. It was making so little money. It was a fair gamble."
My Comics Page launched in September 2002. Pizey had a few affiliates marketing offers as well, but decided not to ramp up co-marketing partners until he saw how well the site did.
More than 10,000 people switched to the paid My Comics Page offer immediately in September, and more join daily. The combined total of paids from both projects is now "a little over 25,000," says Pizey. Not too shabby for test project that even he had little faith in initially.
Encouraged by these results, they have invested in a new back-end system to manage paid accounts. They are revamping both sites this summer to increase conversions; and, they are proactively reaching out to a wide variety of marketing partners.
Subscriptions are currently about 30% of uclick's total revenues. Pizey expects that percent to grow rapidly because syndication revenues are still not remotely a high growth area.
- The average newspaper partner converts 1-2% of unique puzzle page visitors to buyers. However, Pizey notes that they could do better if they focused some marketing effort on it.
"It's frustrating. The problem is most of these sites are not good promoters. There's a lot of room for improvement. We really have to hold hands. One of the best sites is The Daily News because they're such a promotion machine."
- 60-70% of Puzzle Society members log in daily to play (an astonishingly high figure which bodes well for renewals).
- However, just 25% log in to read the PDF Quarterly even though it's very well written.
- After price testing, Pizey lowered the Society's price to $19.95 per year, but left the $3.95 month-to-month where it was.
- 25% take the month-to-month option, and the average lifetime of a month-to-month is about five months. Pizey is now working on tactics to convert more of these to annuals once they start.
- Roughly a quarter of My Comics Page subscribers take the higher $14.95 option for the book plus membership. Next Pizey is going to test offering a choice of books.
- About 700-800 people per day still sign up for the no-cost single comic email offer at ucomics.com. Of these, Pizey ultimately converts a stunningly high 7% to paid memberships, proving that paid offers to newbies can convert better than offers to your old list.
- Of the 600,000 no-cost email subscribers who were emailed that "register again or lose your service" note over six weeks late last summer, 450,000 returned to the site to join again.
- Online publicity works wonders. One mention on SlashDot about My Comics Page when the service added Bloom County wound up starting a big discussion thread. "We picked up a couple of thousand subscribers just from that."
In the end, why should the online publishing world get excited about a paid subscription test that is generated under half a million in sales?
Pizey answers, "This is not an overnight thing. It's going to take several years to build a revenue stream that probably anyone would pay attention to. That's just the nature of subscriptions. They take a while to build those numbers. But, the whole thing is an annuity. And the income bump that first year of renewals is really nice." http://www.upuzzles.com http://www.mycomicspage.com http://www.ucomics.com
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