Posted by: Matt Shanahan Increasing ARPU with a paywall is a strategy being pursued by an increasing number of publishers, however different paywalls have different revenue dynamics. What and how to charge have big implications. Specifically, a mandatory vs. an opt-in paywall have very different revenue dynamics and risks. Let’s look at the math. Assume a publisher has identified a monetizable value proposition (see methdology) and a fan base of 10,000 with an average daily consumption of 10 page views. Further, let’s assume the publisher averages $10 RPM. Under these assumptions, the ARPU of a fan is $36.40 (i.e., 10 page views/day X 7 days/week X 52 weeks/year X $10 RPM ÷ 1000). The revenue of the fan base is $364,000. Now [...]
About Matt ShanahanMatthew Shanahan brings Scout Analytics nearly 25 years of experience in the business transformation. His specialties include business model innovation and new market development.
Posted by: Matt Shanahan Increasingly, Scout Analytics is performing paywall analysis for publishers – specifically paywall opportunity analysis. The trick pursuing a paywall (audience-based revenue) strategy is to find a unique value proposition (see previous post), a monetization opportunity. Unique value propositions allow publishers to create revenue streams beyond advertising, but rarely does one value proposition apply to the audience as a whole. Consequently, a paywall strategy also relies on packaging that value proposition and targeting the right segment. Paywall opportunity analysis is critical as it helps the publisher move away from debates on philosophical merits to actual identification of value positions and targets using the existing data from their audience. At a high level, the analysis has 4 simple [...]
Posted by: Matt Shanahan The ARPU equation has two sources of revenue: the advertiser and the audience. A lot is known and discussed about what advertisers want (e.g., quality, targeting, re-targeting, etc.), but there is a dearth of conversation around value propositions for the audience. What conversation does exist focuses mainly on convenience and ubiquity of access to media and information rather than the value of its consumption. To expand ARPU beyond advertiser revenue, a publisher has to create a differentiated value proposition of consumption for audience members. Surprisingly, few publishers have a good grasp on their differentiated value proposition, and even fewer have the data to prove it. The publishers with which we work normally discover some of their [...]
Posted by: Matt Shanahan Drive-bys can be a majority or a minority of the audience depending on the publisher’s attitude towards SEO, social networking, and other traffic driving techniques. Understanding the weight and priority of drive-by ARPU versus ARPU of other audience segments can provide insight into a publishers strategy. So this post looks at the ARPU equation for drive-bys. For most media publishers, the audience can be broken up into four segments: fans, regulars, occasionals, and drive-bys. The qualification of an audience member into one of the four groups is based on an engagement metric that can vary between publishers but is usually time on site. The Scout Analytics definition for drive-by is that the individual’s time on site is not predictable during a [...]