Profit Potential

So how profitable can a online, 'by subscription' web site be?

It depends on three things.

1. Subscription Price - the amount you charge each subscriber to access your site
   
   
2. Number of paying subscribers - the actual number of subscribers who have paid the subscription price
   
   
3. Overhead - the total expense of running your 'by subscription' web operation.

The good news is that two of the three elements are within your control. You set the subscription price, and you control the overhead.

The only thing you can't control is the number of members you sign up. (But since you are the one who decides the topic covered in your subscription site, and since that has a huge impact on the number of subscribers you attract, you do control that element to a large degree.)

In a later article I'll discuss the relationship between choosing the right subscription site topic, setting membership fees, and the number of subscribers you are likely attract. But for the moment, let's look at the revenue relationship of member fees and number of subscribers.

The table below illustrates that subscription web sites can be profitable with even small numbers of subscribers.

As the chart clearly illustrates, you don't need thousands of members to generate healthy revenue streams - if your membership fee is a little higher.

Attracting Members

Before a subscription web site can be profitable, it must be able to attract paying members. And to do that, you must provide potential subscribers a good reason to join the site. These reasons are generally one of the following:

1. Business or career related - becoming a subscriber to the site provides benefits that are work related
   
   
2. Investment related - becoming a subscriber to the site provides benefits that are related to finance or investments
   
   
3. Hobby Related - becoming a subscriber to the site provides access to information, communication and other things related to a specific hobby
   
   
4. Education Related - becoming a subscriber to the site provides access to some kind of educational experience
   
   
5. Service Related - becoming a subscriber delivers some kind of service

There are other reasons that people join subscription web sites, but your goal is to give potential subscribers at least two, and preferably three immediate reasons to join when they first visit your site. If you can do that, and if you can price your subscription within the impulse buy comfort range of your intended audience, you have a better chance of success.

I firmly believe that success with your own 'by subscription' or 'member site', depends largely on choosing the right topic before you create the site. If you get this wrong, almost nothing can be done to correct it - except changing topics.

But if you get it right, or even close, you can do quite well. Always keep in mind, the topic of your site and the authority you bring to it, pretty much determines your subscription price, as well as who be in your target market.