Arianna Huffington, founder of The Huffington Post, came out this week with an unusual pronouncement – unusual in that it seems out of kilter with her own business, and the generally accepted wisdom surrounding paid content online. In a conference speech she said:

“We absolutely never imagine doing subscriptions. My belief is that unless you’re selling porn, and especially weird porn, I would not go the subscription route.”

The blogosphere has picked up on Adrianna’s suggestion that the only subscriptions worth selling are for porn sites – I’d love to know what porn she considers ‘weird’.

There’s something of a debate it seems online at present, sparked by the downturn in business of many newspapers, many of whom are struggling financially in a difficult advertising sales market. Of course newspapers rely on advertising, both through the classifieds (once known as ‘rivers of gold’) and display ads. And that advertising is drying up as companies around the world batten down the hatches during the global economic downturn.

I’m enjoying the debate as it rages around the net. Some see this as the end of newspapers. Some believe newspapers can parlay their content to a paid subscription. Others disagree, often violently.

It all takes me back to when we were starting Arts Hub, our paid subscription business, back in 2000. Virtually every ‘expert’ told us we were completely mad, that noone would pay for online content. We totally ignored them. And we’re glad we did, because we survived and almost all of the naysayers are now nowhere to be seen. Their path to riches did not pan out, ours did.

I’ve always said we modelled our subscriptions on the porn business – when we launched in 2000 the majority of subscriptions WERE porn – I think they pretty much invented online credit card transactions, and especially 30 day credit card trials. Along with recurring subs, multi-level memberships etc. All of which we tried to learn from and use in our own (non) porn businesses. Although Fiona did accuse me of doing way too much market research… But it’s easy to see why porn works so well as a subscription – targeted, niched content (think of the infinite multitude of sexual foibles, each their own niche) delivered direct to users when they want.

There’s some good analysis springing from the debate. Although I’d prefer some clarity around just what everyone’s debating. I reckon there are three separate products we’re talking about, yet in general the pundits are simply lumping them together under the paid content banner.

Traditional Newspapers

This one is a no-brainer. As I point out to all and sundry, newspapers have had their day. Their model was fabulous for decades, but the inevitable business cycle has finally curved against them. The weakness in their model has been exposed by the global economic conditions, remove their pillar of advertising revenue and it turns out they are extraordinarily vulnerable. Digital online media hasn’t killed newspapers – newspapers killed newspapers. Like the music industry they spent the 1990s blinkered to the changing world around them. Unlike the music industry, who are endeavouring to defend their archaic business model through aggressive litigation – mostly by suing teenagers for ‘illegally’ downloading Cold Play songs – newspapers are dying with a barely a whimper. Oh there’s a bit of talk about them ‘going paid’ online, but the end is nigh. Don’t get me wrong, there will still be newspapers, but there will be far fewer.

Subscription Content

This is how we made our big money. It’s about delivering content under a paid subscription model, it’s also often described as a membership. Our particular area of interest was jobs and news in the arts and entertainment industry. Subscription content is niched by definition, it’s about delivering content specific to an audience, in the format and context they want, at a time they want. There are numerous examples of successful subscription content businesses online, from industry gossip to stockmarket information. Some of these businesses have been around for many years, our Arts Hub business is still going strong nearly 10 years later, as are contemporaries like crikey.com.au.

Bloggers

I reckon this is the brave new world frontier. Up until now bloggers have almost exclusively earnt a living through advertising, and some via affiliate commissions. But that’s changing. For example the terrifically popular GigaOm has announced a plan to charge $97 a year for premium content.

The rise of blogs over the past five years has seen new celebrities created. People like Darren Rowse at ProBlogger and Perez Hilton and his eponymous perezhilton.com represent completely different ends of the blogging spectrum – one a down to earth practical blog about blogging, the other a purveyor of often slanderous Hollywood A-D List gossip, yet both reach incredible numbers of people, and consequently have terrific advertising potential – and in a way broader than just whacking a bunch of Google Ads on their sites. Their strong connection to their audience, teamed with analytical tools that can distinctively characterize and segment their audience, yields strong opportunities for sponsorships, partnerships and commissions.

And now, as with GigaOm, we’re seeing some prominent bloggers seek to capitalize on the strong audience by creating a subscription product. Not everyone will subscribe, that’s a given, but even a small core of subscribers, with these sites’ scale, represents good revenue opportunity.

I rather like ProBlogger’s almost reverse subscription – the 31 Day Blogging Challenge was free, a kind of subscription-like daily content hit revolving around becoming a better blogger. It was excellent content, and some 13,000 subscribed, for free. And now Darren’s launched a workbook for sale at $19.95. What’s the bet 1,000 of the 13,000 buy the workbook. A great day’s work, and I have no problem with Darren enjoying the fruits of his labour. He works hard and deserves to be rewarded.

Maybe Adrianna was just having an off day, or, as I pointed out in a comment on a blog post, maybe it was one of those off the cuff and ill-conceived comments that slip out of everyone’s mouths from time to time.

Because when it comes to paid subscription content and memberships, porn did show us the way.