At a time when Google, Facebook, and Amazon capture up to 70 percent of all ad dollars generated in the U.S. and newspapers across the country have shed half their journalism jobs since 2008, you may think only a masochist would make a career in ad-supported media right now. But every period of creative destruction provides a wellspring of opportunity for entrepreneurs with passion, a point of view on the world, and a capacity to embrace uncertainty. The lessons here are broad--when it comes to marketing your product, every company is in some ways a media company, and finding multiple revenue streams is essential to most healthy businesses.
To benefit anyone trying to build a content business, I've compiled a list of successful revenue models. I deliberately left out advertising models because I want to highlight what else is out there in a world where a predictable advertising business is increasingly out of reach for all but the largest platform providers.
I've worked in media for nearly 20 years. I was on the founding team at Thrillist, started Fatherly, and have invested and advised a dozen other media brands big and small. What's remarkable about this list is the sheer range of options. At the time of this writing, I've counted 25-plus different revenue streams that can support a content-focused business. Hopefully, this list serves as a primer for wherever you are in your entrepreneurial journey.
One characteristic of healthy media companies is that they can monetize each piece of content three times. For most web publishers, this means some configuration of not just advertising but also affiliate programs, licensing, and IP sales. What revenue model you choose and how to operationalize each approach is a question that you can expect to revisit every six months as your company scales and new vendors enter the market.
For the sake of readability, I've attempted to bucket each of these ideas into a category. However, as in life, nothing ever fits neatly into one bucket, so you may notice instances in which several categories may apply. Lastly, I consider this to be a working document, so if you have any feedback, please write to me, and I'll make sure to update on an on-going basis.
Broadly defined in this context as any model in which a content creator profits from driving transactional behavior rather than merely stoking an intent to buy.
- Affiliate: A marketer provides a referral fee, generally ranging from 5 to 20 percent, as a reward for direct sales attributed to the publisher. Publishers can improve their rev share with volume and work directly with a marketer, instead of through an intermediary like Skimlinks. Retailers like Amazon may also include bounties for driving traffic that ultimately lead to a sale after a period of 28 days. Example: Wirecutter
- Product marketplace: To improve your affiliate margins, media operators can assume inventory risk or develop a drop-ship relationship with a merchandise partner and fulfill only what you sell. Example: Food52
- Virtual/experiences marketplace: Like a product marketplace but with a virtual or services-based inventory. In this space, many companies begin with a glorified affiliate model of curating other provider's merchandise before uncovering the business math to make slightly customized to fully customized virtual goods or services work. Example: Atlas Obscura
- Job listings: Since media brands are nodes in larger information webs and those webs are merely connections between people, it's no wonder media companies have an edge in building talent marketplaces. The most common model is a pay-per-listing approach that taxes the job poster, sometimes with a first-one's-free incentive to demonstrate value. Example: PR News
- Clubs: The clubs model focuses on recurring revenue memberships to access discounts on products that align with a media company's audience. Rather than starting from scratch, many companies test this model by first using a white-label partner. Example: NYT Wine Club (powered by TastingRoom)
- Dating: It makes sense that if you cultivate a community of likeminded people, those people may not just want to meet but actually pay for the privilege of dating each other. This is especially the case, in the example below, if your content is focused on ideas around sex and relationships. Example: Nerve
- Custom product development: There is enough variation in this category to merit a separate post, but at a high-level, this involves working with an OEM to create a single product or multiple SKUs that serve an unmet need of your audience. Occasionally, the product becomes so successful on its own that it gets spun out into its own P&L. Example: Futurism developing the Gravity Blanket
- Merchandise: There is a story that as MTV exploded in popularity, its founder/CEO rejected his team's efforts to start developing branded T-shirts. He reasoned that while he could control MTV's image on-screen, he couldn't control the type of people who would wear his apparel in the world. When it comes to merchandise, your buyers are your billboard, and your merchandise becomes a tribal symbol linked with a cultural identity. When the brand is strong and the tribe is hungry, merchandising sales can become a significant revenue source, as in the example below. Example: Barstool
- Event-based commerce or drops: Limited inventory merchandise designed to generate buzz from novelty and scarcity. In the best of breed example below, MSCHF co-ops the conversational commerce model to create a new digital experience every two weeks, like Scream Club (a website in which you can scream with random strangers around the internet) or a physical product like the Jesus Shoes (Air Jordans blessed with holy water from the Jordan River) that creates a community of participants who all share the same tribal affiliation around Internet culture and its rapid hype cycle. Example: MSCHF
2. On-Going Subscriptions
Whether you're the NYT or an independent journalist looking to do your best Ben Thompson impression, it's a boom time for subscriptions as consumers gravitate to more niche content and innovation abounds around the "picks and axes" powering the rush to recurring revenue content businesses. Whether it's through bundling several adjacent publishers into a single subscription (e.g., the Everything bundle) or deploying a one-subscription-to-rule-them-all approach (Scroll or Apple News), the UX around subscriptions has become as easy as pushing the button on the side of your phone or by simply just looking at your phone.
- Paywall for bundled content: Represents various ways of rationalizing a subscription cost by offering original, licensed, and UGC content. Example: Medium
- Paywall for individual contributors: This is an area with the most innovation over the last five years as creators look to get paid. If Patreon is a digital tip jar, Substack is a Stratechery-in-a-box. PBJ Live enables paid live interactions, a model that Cam Girls and other elements of the online porn industry have been developing years before polite society caught on. Finally, OpenMessage enables influencers to build 1x1 relationships with their audiences disintermediated by social platforms. Example: Patreon, Substack, PBJ Live, 4Fans, Open Message
- Consumer donations: This model plays on a general altruistic mindset (save the free press!) or affinity for a brand (save Ferriss!). When deployed as a recurring payment, the mechanics are the same as a paid subscription but the donation framing, reinforced in the follow-up messaging, provides the consumer with a feeling of benevolence versus purely being party to a transaction. Example: The Guardian
- Endowment: Carryover from the non-profit world in which corporate partners, trusts, endowments, and other entities fund a content endeavor because it advances a worldview aligned with their stated mission. The endowment model is popular in political media, especially on the right, as vehicles like the Real Clear Foundation and Federalist foundation look to shape national conversation without burdening content creators with the indelicacies of running a profitable business. Example: ProPublica
Unlike subscriptions, in which the consumer pays for content, the production category refers to creators selling their content services to an enterprise customer.
- Premium: Longer form or episodic content inspired by a brand's identity or its campaign's theme. While a brand typically funds this, ownership may vary and exceptional content can yield additional revenue from licensing or other commercial applications of the intellectual property. Example: Pocket.watch
- Fact-checking for social platforms: The latest in platform largesse for publishers in which media companies, usually after receiving accreditation through Poynter's International Fact Checking Network, receive retainers and performance bonuses for providing fact checks against the tidal wave of false content permeating our feeds. Still cheaper for social platforms, no doubt, than assuming editorial responsibility while reaping the exculpatory benefits of Section 230 of the Communications Decency Act. Example: CNN
- Asynchronous pay-as-you-go: Whether it's Lance Bass singing happy birthday to your aunt or your favorite fubol star revealing he's much more charismatic on the pitch, these platforms host talent to sell their time on-demand. It's a brilliant way to capitalize on "captive content creators" in a pandemic or anyone well known enough to monetize their downtime. Example: Cameo
- Synchronous pay-as-you-go: This is the same model as above but with the added thrill of real-time interaction between creator and fan. Twitch represents one of the biggest companies in this category, facilitating connections between live-streamer and fans. Similarly, OnlyFans has quickly become a behemoth based on facilitating adult content that other social platforms prohibit, not dissimilar to Tumblr's meteoric rise a generation of media companies ago. OnlyFans also features artists and personal trainers and presents a mix of subscription and asynchronous pay-per-view content opportunities as well. SextPanther, a pay-as-you-go model for -- that's right -- explicit sexts from adult stars adheres more purely to the synchronous model. Example: Twitch
4. Selling to the Enterprise
Defined here as selling content products and services to large corporate (1,000-plus-employee) customers in which the organization is the customer, usually as part of a service-level agreement. Typical of B2B, this process involves more stakeholders and longer decision cycles offset by the promise of stable revenue and higher returns on invested effort.
- Classes/workshops: Content-as-a-service to organizations, generally as part of L&D, HR, and D&I initiatives. Popular current varieties of this type of business include content companies providing wellness information for overworked employees or mass upskilling and retraining from education publishers to a global workforce. Example: Thrive Global
- The secondment model: In this model, a media company embeds its talent in a client's physical or virtual office to create content more quickly in a dynamic news environment. This embedded talent model is different than in-housing because the employee is still a W-2 of the media company and not the client. The client's benefit is that they enjoy the talent and operational know-how of a media company's people without the cost or ramp-up period of hiring an outside agency. This model isn't technically advertising because the fee structure is generally based on people-as-a-service rather than the creative output those people produce or the media by which the output is distributed. Example: [Companies that are doing this prefer that I do not share their names]
- CMS: The commodification of publishing technology has fueled the explosion of content over the last 20 years. In those instances in which media companies have demonstrated a competitive advantage with their technology, software licensing has become a revenue growth area. Example: Washington Post's Arc
- Research: Leverage journalists' research practice for organizations looking for more in-depth market insight and business intelligence. Example: Insider Intelligence
- Data: What may start as covering a beat -- say technology investments -- can become a business intelligence product that relies on a combination of human expertise and software designed to ingest massive amounts of proprietary data. Example: CB Insights
- Corporate/bulk subscriptions: Defined here as multi-user access to content based on a contract instead of a single user's credit card. From student subscriptions for news products to corporate learning and development teams looking for content that uplifts remote workers. The corporate subscription model may also encompass third-party sponsoring subscriptions on behalf of an audience as a way to create value in exchange for attention. Example: New York Times x Lincoln
One of the more potent ways to quantify your media brand's value is by how much the market would pay to be associated with your content. While advertisers may pay for adjacency, licensing as a business model is a more wholesale judgment on the value of what you produce and the appeal of past actions, design decisions and general brand reputation over time.
- Rights: On the low end this encompasses reprints and e-prints, while the high end involves richer packages with annual payments to the original IP owner. Example: Authentic Brands
- Feeds: This generally involves content platforms paying IP owners for access to their content feeds to capture attention that can be monetized some other way, usually through advertising. This model encompasses full or partial content feeds and more prominently reflects how AVOD services generate content as an alternative to investing as heavily in original productions as an SVOD service. Example: CBS and Pluto
- Co-located content: The only distinction I would draw from feed-based licensing is that this generally refers to newer, fresher content instead of back catalogue productions. Example: Associated Press
- Credentialing: In a system of many choices, it pays to have a trusted brand navigate consumers towards your desired product. This model directly leverages your brand equity to help drive sales activity for another company. Assuming you've already made the investments to build a brand that the market cares about, this is a high margin business and easy work if you can get it. Example: US News & World Report
6. Live/Virtual Experiences
Before Covid-19, the global events industry was on pace to grow to $2.3 trillion by 2026, up from $1.1 trillion in 2018. While the pandemic will inevitably stunt that growth, virtual events are expected to grow to $774 billion by 2030, up from $78 billion, according to SF-based Grand View Research. In either case, events are a natural expression of content businesses as consumers look for community and real-time access to creators and their ideas.
- Touring: Applying the concert model in which content creators take to the road for a multi-venue tour with revenue from ticket sales, concessions, merchandise and possible IP extensions such as documentaries and specials capturing the road magic. Example: Pop-Up Magazine
- White-labeling/franchise: Offering up an experiential formula to a trained team in multiple markets -- think many teams in many markets instead of one team traveling across many markets. The franchise model works best if the product is the formula and not the unique personality of the original creator. Example: Tinkergarten
- Expo/conferences: One team, minimal markets approach to events that can service thousands of consumers at once with a programming schedule, exhibition access for vendors and ample networking opportunities. Example: AfroTech
- Paid community: A gatekeeper model in which access to the community provides just as much value as the creator's content. Paying communities are particularly relevant in B2B environments in which dues-paying members gather regularly IRL or online for learning, development, networking and crowd-sourced support opportunities. Example: The Information
Notice anything missing? Have a better example that you'd like to share? Let me know at email@example.com.