Of that1.5 million, recent reports indicate that 100,000 are digital-only subscriptions, garnering approximately $12.7 million in online dollars for the 169-year-old publication. In addition, The Economist has 15,000 Kindle and Nook subscribers, which accounts for a conservative estimate of $1.8 million in revenues. That’s a total of $14.5 million in online subscription revenues alone!

But getting back to that savvy marketing. An off-the-record source informed me that The Economist has made a conscientious effort in its branding to be THE publication of cosmopolitan intellectuals, and indeed, it’s hard to find a smart world-traveler or business exec who’s willing to talk trash about The Economist. Thus, aspiring smart people feel almost compelled to buy a subscription. It’s tribe marketing at its best.

The Economist has also been savvy enough to capitalize on “lean-back” devices like the Kindle, Nook, and iPad, which are more friendly platforms for their long-form content. They not only know their market, but their medium. While some readers may be asking for mobile (which they provide), the majority are going to be grateful to be able to read lengthy articles at their leisure on a lean-back device.

But what about the flip side — paywalled aggregators?

There haven’t been many to choose from, but a year and a half ago, The New York Times Co., The Washington Post Co., and Gannett invested $4 million each in Ongo, an online news aggregator with a paywall.

But Ongo had a confusing subscription offering, with a basic service that included “selected” content. Subscribers then had to pay more for individual publications, priced at different rates. In addition, much of the content was available free on the Web through other sites or metered paywalls. And so now, sadly, Ongo is shutting down.

Ongo’s strength may have been that subscribers could access their content from  multiple devices — desktop, tablet, mobile — and have an ad-free reading experience. As Ongo founder Alex Kazim said in an interview with paidContent last year: “We realized that users won’t pay for content — however, they will pay for a better user experience.”

Even though we disagree with the first half of Kazim’s statement (and have ample evidence to the contrary), there’s wisdom in the latter part of his statement for all of us. Failure makes for great lessons. In Ongo’s case, the technology was well-suited to reader behavior. It’s just that the marketing and pricing were off and couldn’t course correct in time to satisfy Ongo’s ‘Big Newspaper’ investors.

As some of you may know, online education sites like Lynda.com and ArtistWorks.com are some of the hottest paid content niches out there. So competition from universities willing to provide educational content free of charge may give subscription site professionals reason to pause.

On the one hand, this could be a repetition of the “original sin” committed by newspapers, who made their content available free online and with no plans to monetize. They cannibalized the revenues in their own industry and are now struggling to smack together a way to monetize their work.

On the other hand, when Google came out with its free Google Website Optimizer, companies creating testing software were nervous. Yet, according to our sister site, WhichTestWon.com, free testing software introduced more people to the industry and led to an uptick in testing over a 24 month period. Turns out, thousands of marketers got their start with the free Google product, and then felt comfortable enough to “upgrade” to a paid software that better fit their needs.

So in this case, perhaps Havard and MIT will help more education consumers feel it’s “normal” to take online courses, and thus open the market for the rest of us. Niche online education folks may not be celebrating yet, but they may want to put the champagne on ice.

Recent reports of BostonGlobe.com’s free trial offer (April 24 – May 6) allowed me to take a closer looks at the company’s conversion and revenues. It turns out that Beantown’s flagship news outlet has only been able to convert 18,000 readers into paying subscribers since instituting a paywall last September. With 6.2 million unique visitors in 2011, that puts the site’s conversion rate at about 0.3%.

That also means that the site can be expected to garner about $3 million in subscription revenues this year. Compare that to The New York Times with 450,000 paid subscriptions and a conservative estimate of $77 million in subscription revenues, and you can see why the powers-that-be at the Globe are willing to buck best practices by offering a free trial without requiring a credit card number (we strongly recommend against this).

Some have speculated that the low conversion rate may be because the Globe has failed to articulate the benefit of its online platform, other than the site’s ability to adapt to any mobile device. It may also be because the Globe doesn’t have the national (and international) appeal of the New York Times. Plus, putting free content on Boston.com and having a more stringent paywall on BostonGlobe.com (there’s no metered access like the Times), makes it a difficult sell with no foot-in-the-door offer. And lastly, the Globe has chosen to make online access free to its print subscribers. While this may be an enticing tactic for some papers, valuing online content separately and pricing it similar to print has allowed other legacy print publications to garner more profits during this period of trial-and-error in the digital publishing industry.

1. The paid content business is a $15 billion a year industry — Anne Holland, Subscription Site Insider
2. “Faked” overlays can convert more than traditional landing pages — Mike Manning, LoopNet
3. Come up with a demographic and psychographic profile of your “average” customer and, when in doubt, ask what he/she would want and respond to any new initiatives — James Taylor, ArtistWorks
4. An attitude of “Everything is new again” will help you survive a shrinking/changing market — Torry Burdick, Mortgage Success Source
5. When your site relies on member engagement, increase it by not only providing them with concrete tips on how to best use your service, but send those tips via postal mail — Mitch Davis, ExpertClick
6. If you’re using Google for your PPC campaign, ask them for access to their Beta programs, like Google Dynamic Search Ads or Google Communication Ad Extensions — David Herscott, NetX
7. Test! — Justin Rondeau, WhichTestWon.com
8. Marketing is not about getting people to buy, but rather, getting people to buy now — Bill Baird, Baird Digital
9. If you’re running both print and online subscriptions, renew your subscribers the same way they came in — Helen Hoart, Harvard Health Newsletters
10. It’s easier to sell “content and data” than “news” (even though they’re often the same thing) — Brain Hunt, The Recorder
11. Kindle has 80% of the eBook market, so start there — Fred Gleeck
12. Don’t use a flip camera when creating videos. Do use the less expensive cameras that are used to create B-roll — Brenda Power, ChoiceLiteracy
13. Subscription revenues can be 3 times the revenue lost by CPM drop when going to a metered access model — Alisa Cromer, Local Media Insider
14. When onboarding, offer subscribers a welcome video, a congratulations and thank-you email, an email with suggested first steps, and notification about how they can get help/support (but not all on the same day) — Noah Fleming
15. Events are hard, but worth it — Andrew Krauss, Inventor’s Alliance

Look for more tips and advice over the coming week, here on Paywall Times and on our sister site, Subscription Site Insider.

A year ago, the DC-based political site created a unique “Pro” subscription plan catering to Hill staffers, lobbyists, and others who need policy news on their BlackBerry — now. Politico Pro offers subscribers up-to-the-minute updates on four major policy areas: technology, energy, health care, and transportation. And while the site mysteriously doesn’t offer a price (just a number to call if you’re interested), Neiman reported that an individual plan is priced at $3,295 a year and $8,000 for a site license for five people (the plan forbids forwarding or sharing emails and updates).

While Politico has not released the number of paying subscribers who have signed up for the plan, they say it’s been highly lucrative. And it’s definitely an interesting model to watch — create general news for the masses and make it available for free, but charge the readers whose careers are dependent on getting your information first and fast a high premium. Often the difference between getting an update via Politico Pro and seeing the story on the site is a matter of minutes (16 for one story in particular), but for the adrenaline-filled arena of national politics, that can make all the difference.

Of course, an endeavor like this takes staffing power, and Politico has 45 of their 150 editorial staff members dedicated solely to Pro. With renewal rates “overwhelmingly” surpassing the market-based predictions of 85 to 90 percent, it’s definitely a model to watch and keep in mind for similar breaking news organizations that have an innate niche in their audience.

James Taylor of ArtistWorks

Our Spring Summit for Subscription Sites is starting tomorrow. And we’re super excited to have James Taylor, VP of Global Business Development for ArtistWorks, give his inside tips for scaling up your subscription-based business.

Why be content with one subscription site when you can have dozens? With 30 ArtistWorks sub-sites, James is an expert at sniffing out profitable niches. His open-kimono style presentation will let you see what software they use to manage subscription billing for so many different sites. Plus, you’ll learn how to create a winning sales team and build super-brands and sub-brands.

The conference is starting at 8am tomorrow (Tuesday, April 24th) and the super-cool SPUR center (I’m currently camped out in the light-filled lobby, listening to Justin Rondeau, Editor of our sister site, WhichTestWon.com, give a great workshop on A/B testing). If you’re in the San Francisco area and looking to increase your revenues and grow your subscription business, you should definitely come. Just pop on by tomorrow morning at 654 Mission Street and buy a discounted ticket on the spot!

Those subscribers translate to approximately $192 million in subscription revenues, which is only a partial amount of gross revenues given that the site boasts a robust advertising revenue stream. After expenses, the company claims to have netted $420,000 in total revenues.

These are impressive numbers for the site, which seems to be competing in recent months with YouTube (there was even some speculation that Google — YouTube’s parent company — was looking to buy Hulu). Both sites are seeking to augment their original programming, with Hulu stating it wants to be the first true Internet-based premium television network. Yet Hulu seems more poised for success given its partnership with professional content producers (i.e., its owners NBCUniversal/Comcast, Fox/News Corp., and ABC/Disney). In fact, the site is already pitching advertisers for its upcoming crop of original shows.

The Times recently decided to revamp its health blog “Well,” making it look more like an independent website than a Times blog (see pre and post design samples below). The new design clearly reflects editorial and marketing changes, such as giving non-timely stories more prominence, forcing heavily commented stories to a sidebar called “Well Community,” pushing tools, quizzes and recipes up higher, and allowing readers to peruse the site by subtopic (Body, Mind, Food, Fitness, and so on).

Well is also getting more writers, another move that subtly differentiates a publication from a blog. And the navigation bar and other visual cues found on the rest of NYTimes.com are mostly missing.

The branding of micro-sites is a smart move by the Times, especially since Well has not only seasonal stories, but content that’s sure to get consistent search engine traffic (such as an article on what works when trying to lose weight). But the design also lets the site stay current with news-cycle content and timely articles.

One catch in all this smart marketing might be tying Well to the Times’ metered paywall. Fans of an independent microsite may not see any worth in buying a subscription to an entire new agency if they don’t really view the other content. But I suspect that this re-branding move is a precursor to the Gray Lady rolling out micro-subscriptions. And as we all know, niche subscriptions are better revenue models online.

The original Well blog (left) and the newly designed micro-site.

Inspired by the growing proliferation of paywall sites, SaaS providers are responding to their call for more malleable billing software. For example, Vindicia just announced that it has added “usage” billing to its billing software CashBox. The software already lets sites receive recurring revenues, but this new addition will allow them to process one-time charges, as well license-based, variable usage, highest-tier usage and flat-fee pricing.

While it’s best to try to upsell site visitors into a subscription, one-time and usage billing also allow subscription sites to capture email addresses of more commitment-phobic visitors while also adding to your bottom line. Pay-per-use billing is also a good idea for any subscription sites that are data mining–often researchers need a specific data set for a one-time project. And while these charges won’t keep your cash flow in the black, it will provide you with a list of qualified leads that may be interested in purchasing a subscription at a later date (or spreading word-of-mouth advertising on your behalf).

My point? Focus on subscriptions but don’t throw away the low-hanging fruit.