• The Indie label Stones Throw just launched a subscription service by which members would get ever song/album they released delivered to their Inbox
• Hitch.me lets singles date by ‘hitching’ into their LinkedIn profile. The site has only three questions: two about finance and one about what type of car you drive (which, as a native New Yorker, I found to be a curious litmus test of net worth).
• Rhapsody just acquired Napster International in order to compete with Spotify.
• Meredith Corp just bought AllRecipes.com from Reader’s Digest.

On the other side of the equation, a number of sites are experiencing growing pains:

• Gods & Heroes is dropping its subscription service in favor of a flat $9.99 fee.
• Netflix is keeping its subscription service but phasing out its DVD rentals, moving more to a SaaS model with streaming movies.
• AOL, the original online subscription service, seems to be going down the rabbit hole with their resistance to subscription services and rapid growth of the Huffington Post abroad.
• Slader.com, a new service to help kids with math homework, downgraded from a promising subscription model to free!

Of course, there’s no one algorithm to success. But recently, Lynda Weinman of Lynda.com fame went on Big Think to give her opinion on the matter. We just love how she emphasizes getting to know the daily workings rather pondering abstract business models. Perhaps that’s why Paywall Times readers are finding success in the subscription industry?

For example, last Friday Private Media Group launched a new softcore membership website Glamazones.com; and, this week lesbian content specialists Girlfriends Films noted for 2011 due in part to “the massive success of our membership site, we exceeded our own expectations.”

Aside from compelling content, what marketing tactic is responsible for this success? Adult sites rely far more heavily on affiliate marketing deals than any other membership site sector we’re aware of. Plus, in the adult world directly competing sites are highly likely to be each other’s affiliates. One common tactic, using overlays and exit pops to promote a competitor’s site to all traffic that bounces off your own site without converting to your own membership offer. This is an idea that could work well for mainstream sites as well… but we don’t know anyone who’s yet to try it.

• E-media was the fastest growing revenue stream last year (cited by 68 percent of larger publishers and 52 percent of smaller publishers).  This is where you need to put your money. If don’t already have a subscription site, learn how to run a membership site effectively. Repurpose your content into mobile apps; yes, there is a market for b-to-b apps. Keep an eye out for what’s next in the online space.
• 35 percent of larger publishers plan to launch an online publication compared to 20 percent who expect to launch a new print magazine in 2011. Meanwhile, 27 percent of smaller b-to-b publishers plan to launch online, while just 13 percent are planning a magazine startup. A third of publishers are  launching an online startup this year. These days it is usually cheaper and less risky to launch online. My greatest fear in seeing these numbers is that another company might launch my idea before I do. Get out there and do it now and don’t use money as an excuse. Our recent Case Study on NeedATopic proved that a membership site can be launched in less than a week for less than $1,000.
• Larger publishers said the events part of their business was their second-fastest growing revenue stream. No matter the size of your business, if you’re not doing events, you’re leaving business on the table. Start small if you have to with a half-day or full-day conference near your headquarters. Learn from the experience and grow. Don’t forget virtual events like trade shows and education.
• The majority of both larger and smaller publishers  say they expect a double-digit increase in revenues this year. Business is back. Ask yourself, where can you find double digit increases in your revenue streams?

Founder Harry Schuhmacher grows profits by launching paid sister newsletters which he markets to his current customer and prospect base. For example, he launched a very successful paid newsletter just for the craft beer industry.

Key: He picked the topic by watching which Beer Business Daily headlines about niche topics generated the most interest. (News about the fast-growing craft beer segment is in high demand by the newsletter’s subscribers from the beer distribution industry.)

While he continued to cover large craft breweries in Beer Business Daily, the new publication went much deeper and expanded coverage to thousands of smaller craft breweries, so readers had to buy a second subscription if they were passionate about the topic. So his customer-base is overlapping — but the content is not.

(If you’d like the entire Case Study, including details on how the company turned free email opt-ins into paying subscribers, here’s the link.)

Paywall Times’ #1 lesson learned:

President Steve Lampert revealed his team uses a range of marketing and pricing tactics to stay on top … but his most critical weapon is narrow positioning.

Seems like most competitors try to grow by broadening the range of matchmaking they offer. They’ll help you find anyone from a pet sitter to an elder care-giver.

After a decade in the paywall business, Steve Lampert says he’s learned to do the exact opposite. Keep razor sharp focus on serving just one specific pain point. Then, when you want to grow profits, create additional products or services that match that focus completely – without broadening it.

(If you’d like the entire Case Study, including which specific additional revenue streams are helping Lampert’s profits despite competitive price decreases, here’s the link.)

That’s one of the big takeaways from this week’s Subscription Site Insider Case Study, which offers a behind-the-scenes look at how the stock-photo site Fotolia launched an entirely new subscription-based service called PhotoXpress aimed at a different target audience.

PhotoXpress was created initially as a free image site to generate prospects for Fotolia’s high-end, corporate subscriptions. But the team quickly saw an opportunity to make the site a subscription service in and of itself, which offers lower-priced plans for small businesses and nonprofits.

Instead of trying to shoehorn smaller businesses into Fotolia subscriptions, which offer a range of features and subscription terms geared to high-end, heavy users of stock images, the team designed the new PhotoXpress site as a much simpler, lower-cost version of the parent site.

While much of the content available on the two sites is the same, PhotoXpress simplified the pricing and licensing agreements to better suit the needs of the typical small-business subscriber. They also designed the site to be easier to use than the somewhat complex image search and selection tools available on Fotolia.

Even better, they’re still using PhotoXpress as a lead-gen channel for the parent site. They monitor subscribers’ usage to find prospects for upsell offers to the parent-brand’s higher-end subscriptions.

So before reaching out to a new target audience, think carefully about whether one site can meet the needs of existing subscribers and the new demographic – or whether it makes more sense to design separate sites tailored specifically to each
audience’s specifications.

I’m in the midst of designing a new homepage for Subscription Site Insider’s main site and just like always, finalizing a wireframe is  AGONIZING.  I want to put everything plus the kitchen sink on there, and I want it all above the fold!  Which is stupid because clutter confuses instead of converting, and the tiny type you’d need to shove more content in a small space is completely unreadable.

How do other membership site and subscription site publishers decide on homepage design?  The above chart is from SubscriptionSiteInsider’s Benchmark data study last summer when we reviewed 550 paid content sites with subscription business models.    We noticed that most sites’ homepages fell fairly neatly into one of three categories.

#1.  Content-Focused:  This category included nearly all sites from traditional newspapers, magazines and newsletter publishers as well as many Membergate-powered sites.    Their home pages were primarily filled with headlines and teasers for different articles behind the paywall.   It’s all about selling the steak instead of the sizzle, which is not to say it doesn’t work for them.

#2. Longform letter: Often these sites tend to be about making money (on the Internet or by stock investing) or about body building.  The homepage scrolls down FOREVER.  If you printed it out, often it would be 10 or more pages of paper.  There are calls to action every half-foot or so, and graphics such as testimonials and guarantees to catch your eye so it’s not just one endless stream of same-colored text.  But it’s mostly text.  The offer can be for a trial, but often it’s a hard offer pitching directly for the subscription.

#3. Promotional/conversion-focused homepages:  Nearly every dating site homepage is this way, as are most games and virtual worlds.  My favorite example though is Netflix.  Usually these pages fit it all in one screen.  No or little scrolling.  Aside from a tiny member log-in link in the upper right corner, the page is designed more like a marketing billboard (albiet interactive) than a content site.    There’s one headline and it’s focused on the membership offer.   And there’s a conversion button or form, usually for a trial.  Copy is brief, maybe a few bullet points.

Would a dating site do better if it broke ranks and mimicked a content site layout? What about vice versa?  Can you imagine a newspaper site with just a promotional homepage and no article headlines at all?  There’s almost no data.  Very few sites break rank with the site design of their peers.  I’d love to see more test data on this.

In the meantime, we base our design on specific research-based rules and hope for the best.

The timing made me laugh because I just got off a webinar where question #2 was “what niches do you think are best to launch new subscription sites in?” For some reason, when I was on the spot I didn’t say “health”, although actually it’s been a category that’s been bugging me for awhile.

Health advisory subscription content for consumers was a HUGE category in the offline subscription world in the 1980s and 1990s. But that boom hasn’t translated online yet, in part, I think, because pharma ad dollars are falling off trees. Frankly, though, most ad-based health sites are so focused on delivering pageviews and clicks to advertisers that the quality of health info sites has suffered greatly. Most, even the famous names, look and feel a bit spammy. Not useful. And, certainly not written in a language that people without medical degrees can appreciate.

So, yes. Along with a few other categories I named today, I would say branded health advisory products are well worth researching for possible launches. Name brand doctors and institutions tend to work the best (Dr Weil’s team was testing paid content back at the turn of this century you know.) Often you need an ancillary revenue stream to do the best with these… consumers may pay $9 month or $39-99 year for health advice. In the past, health advisory letters often supplemented revenues by selling their own branded lines of supplements and vitamins.

According to this new data from SubscriptionSiteInsider.com’s own annual survey of subscription and membership site executives, the industry is looking at expansion for 2010.   302 publishers and other executives responded to these questions — a record for industry studies.   They included b2b content sites as well as subscription sites selling content access to consumers. All of the executives were actively involved in a paid content subscription site (we surveyed other online and offline publishers separately.)

Some analysis:<ul>

<li> Although mobile publishing is hot in the media, these executives are apparently far more interested in expanding in the platform they know is proven to work for them — subscription sites.</li>

<li> Experienced site publishers are interested in developing sites based on offline brands… but not so much that they’ll go out and look for the deals aggressively.  This is an opportunity for offline brands, ranging from branded instruction books and TV shows, to celebrities worthy of membership-based online fan clubs, to reach out to publishers who already know what they’re doing in the space.  We’ll definitely be covering the hows of this type of deal in 2010.</li>

<li> Folks are also interested in acquisitions, but again mainly in a passive manner.  I actually suspect this is because there are very few information sources currently for subscription site acquisitions… we’ll be launching an M&A center fairly soon to fill that gap, so contact me if you want to be listed as  a buyer, seller or advisor!

<li> Although execs are not that interested in trying to turn free content into a paid site (a tactic that has worked well in the past and we’re building the Case Study Library to prove it), I suspect paid ebook properties will provoke a different answer.

<li> Launches, launches, launches.  Well, your first site is always the hardest.  Once you’ve got the tech, content, and marketing nuts cracked to your satisfaction, why not cookie cutter your systems and processes out over additional sites?  It’s a very normal business model for offline subscription newsletter publishers.   So I expect to see a lot more of that too, with typical site publishers owning multiple titles.

What’s your take?  Let me know below….

However, so far 34% of the customers for our new Subscription & Membership Site Benchmark are international.  It’s a clean split between Canadians and Europeans.  What does that mean for the site launch horizon?  Murdoch’s just as famous (or possibly more) elsewhere than he is in the US, and he’s been bombasting a lot this year about subscriptions.  Plus the Guardian bought paidContent.org a couple of years back.   Not to mention the fact that SubHub.com – one of the do-it-yourself subscription site platforms — is based in the UK.  (Strangely, the programmers for SubHub’s most direct competitor, US-headquartered Membergate, are also UK nationals.)   And there’s – old but presumably somewhat good-  data showing that Europeans using online dating sites view 44% more pages (that’s 310 pages each per month) than their American counterparts do.  Lastly, Europeans are far more accustomed to using their phones for paid mobile apps (for example, in Belgrade you pay for city parking with your cell phone, not change in a meter), so the likelyhood paid content on phone will be profitable easier and faster in Europe is , well, very likely.

We’ll be tracking launches on the main part of the site when it’s launched in January 2010… so there’s something to look forward to.  I guess I’ll place a personal bet now that European and Canadian sites will be, oh, let’s say 34% just for the heck of it.