Bootstrap: The Modular Subscription

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This week, I have been thinking about business models. Specifically, how to construct a subscription model that works for today’s digital media customers and works for today’s media businesses.

The truth is that subscriptions have been discussed as a “cutting-edge” business model in publishing for at least the past 4 years. And, yet, there is little discussion about the evolution of the subscription. Focus tends to be on forcing traditional book product into a model similar to that of the magazine world.

However, there is a major flaw from the standpoint of a media company in adopting the one (or variations of one) size model: customers typically do not want everything you give them. Increasingly, subscriptions are customizable, a more modular approach to the subscription, that allows customers to purchase and access only those things that they are interested in purchasing.

There are a few “traditional” subscriptions that have worked and continue to work, McSweeney’s being one of them. Here, if you like McSweeney’s content, you will most like enjoy the majority of what they send you. But, this model is built on the premise that their audience is specific, narrow, and very well-defined. And that works.

But, what do you do when your audience is diverse? What of the larger market and increasing customer demand for only relevant product and content?

In these cases, it is inevitable that the subscription itself evolve into a new model that we’ve not yet employed in the publishing world. For my own purposes, I am going to call this the modular subscription.

What do I mean by this? Well, it’s simple: let people subscribe to only what they want. Do not force customers to pay for something they don’t want or need.

You know how when you call to set up your internet, and they sell you phone and cable for a “reduced” price? Well, that is the cable companies forcing their customer to pay for services they do not want/need. I know exactly zero friends who have and use a land line anymore as their main channel of communication. Most people I know don’t even have a land line. Or they have one because “it was cheaper to purchase all three then just internet or internet and cable.”

This is the opposite of what is good. And the opposite of what we’re trying to accomplish with Holocene. The modular subscription that we are detailing now, is one where users are not punished for knowing what they want. They are not “offered a deal” that actually makes their purchase less useful. And they are not needlessly charged for content and/or services that they have no intention of using.

Our goal is to let our customers be adults, let them choose what they want and feel comfortable purchasing from us, and still retaining them as customers.

An example that I personally have looked at, am a subscriber to, and talk about often is ClubW. I’ll let you explore their subscription on your own, but basically they are a wine of the month club offering customers a subscription that is flexible (within their basic guidelines). Want to take a month off? Sure. No questions. Want to order more? Sure, no change in plan, each additional item is the same price. Want to change your plan to suit your needs better? Absolutely, change it whenever you want, to whatever meets your current needs.

To me, this is the way to go about offering a subscription model that works for customers and businesses, and offers the most superior user experience. And this is where we are taking cues from around the internet in terms of devising a usable, current, smart modular subscription model for the microzine.

Ultimately, business models must interact with customers. As producers of digital products, we are required to make sure our products are usable; by which I mean every aspect of our products. UX/UI considerations are not the whole story. Being a d2c digital media company necessarily implies that every single aspect of our companies and products from which the possibility of a customer interaction is present must make sense for our customers.

As the startup life is never boring, I am off to Portland this weekend and part of next week to work with Corey and Kim on nailing designs and business models and jambalaya, I’m told. I am sure I will have much to report back next week.

In the meantime, as a buyer of digital media, what would you want in a subscription?

Image: Silhouette of the head, brain, … via Shutterstock.

Brett Sandusky

About Brett Sandusky

Brett Sandusky is the founder of bdigitl Media Labs, a consultancy providing UX and product development services to companies launching new ventures. He is also a co-founder and Director of Product Development of The Holocene, a digital publishing platform for the DIY and make space. You can find Brett on Twitter @bsandusky.

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7 thoughts on “Bootstrap: The Modular Subscription

  1. “However, there is a major flaw from the standpoint of a media company in adopting the one (or variations of one) size model: customers typically do not want everything you give them.”

    Well, this is how a subscription works: Customers pay a flat fee and can get everything. However, they won’t, and this is how the companies, be it cable providers, publishers, or theaters, make their money. If you want a la carte, you can pay for every single item, and that would be more expensive per item. However, having the low price of a subscription, and then itemize it based on the subscription price does not work. For instance, everybody has 500 cable channels and watches only 20. But if everybody would only pay 20 channels, the cable company would still have the same expenses because it still provides 500, hence the price for the 20 would be the same than for the 500.

    This would be like going to an all-you-can-eat-brunch where you are paying $10 for, potentially, the whole buffet, and then ask the restaurant to mark it down to $1 because you only ate a small percentage.

    • These are all great points, but there could be a middle ground, no?

      As a thought experiment, say that you pay $100 a month for cable. What if the cable co. offered a $90 subscription where instead of getting 500 channels you got your top 100 as measured by your set-top box. It could be a nice way for cable companies to give their customers some agency while also marketing flexibility.

      Brett’s post might describe a utopian vision that, as you describe, destroys the model. But maybe it’s instructive in leading us to new models that could work.

      Just a thought.

  2. I think that the current cost per hour of entertainment for ebooks is too low for a subscription model to work. It works for Netflix because the cost of buying the individual shows or movies you would watch would be fairly expensive relative to the time you would get from it. On Amazon Instant, you can buy movies for around $10, so it works out to $5/hour on average. Most ebooks run around $8 and provide at least 6 hours of reading, reducing the cost to $1.33/hour. For an $8, Netflix-style subscription, a reader would have to read a lot more books to get the same value out of not owning their entertainment.

    • I’m not confident that people make book- and magazine-purchasing decisions with a cost-per-hour mindset. It’s an interesting way to look at the question of pricing, but I don’t think hours-spent-reading is the only (or even dominant) factor in decision-making.

      At The Holocene, we’re focusing exclusively on content related to do-it-yourself skills, so let’s look a little more closely at that genre.

      A how-to focused print magazine might have 20 patterns in it, and a reader might buy an issue at a newsstand if they find one or two patterns they’d like to make. It might still be a bargain, since magazines are priced so inexpensively (in general), but to flip things around – think of the expense the publisher undertakes to publish so much content that might not even be read or used. (The same goes for a book.)

      We don’t have to contend with the constraints involved with print publishing, so we don’t have to fill 96 or more pages in order to have a viable product.

      So we can put even more choice into the hands of our readers, which means that the we’ll gain tremendous insight into what they want. And a reader who gets what they want is likely to see value in the publication that gives it to them.

      There’s tremendous variability in the pricing of how-to information right now. A book might cost $21, an issue of a magazine might cost $7, and an individual pattern designer might sell one pattern as a PDF for $7. Makers by all of these products.

      In designing our microzine with a very clear editorial vision, bundling complimentary content into relatively small chunks, and giving our readers the option to both subscribe and to have some choice, we’re hoping to establish a very mutually beneficial relationship between us as publisher and them, as readers.

      (Cable television would have it easy if the cable company were creating all the content they deliver – they’re not, and that’s part of why cable subscriptions are a complicated nightmare. We’re going to be publishing our own content, so we’ll be able to package it however works best, and we’ll be able to experiment to discover what “best” looks like.)

  3. Also in romance, Sourcebooks’ Discover a New Love subscription lets members choose one from among several e-books each month. Subscribers don’t have to buy anything in a given month, and they’re offered additional titles at a members-only discount. The monthly credits don’t expire, but they can only be applied to books that were offered during the person’s subscription term (i.e., you can’t sit on a credit for six months, let your sub lapse, and then get a newly released book).

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