April 26th, 2022
Building a successful subscription-based media business is extremely hard to do as a young company.
I cannot name one successful community that is less than a few years old that makes millions per year.
The successful ones are built over many years and/or have some X-factor (huge distribution channel, insane word of mouth, huge market trend).
For example, the New York Times has a huge subscription business. But it’s built on an excellent brand and decades of publishing and another solid business model of ads. They built a subscription to diversify their revenue, and they had millions of traffic and brand loyalty that got them millions of subscribers.
It’s extremely hard to build a media company and paywall everything right out of the gate and expect it to work because it worked for the New York Times. You might be able to do it with VC money, but I can’t think of many media brands that bootstrapped it.
I think this is what a lot of people get wrong, including me. At Starter Story, our membership is stagnating. It’s not really growing or dying.
I’ve realized subscriptions are not a truly scalable business model for a young media company. As a mature company, it’s a great way to capture money from your loyal users. but we (Starter Story) are not a mature company yet. We are too early in the life cycle.
So that’s why we are turning our focus back to the ad model this year.
If we can continue to grow content, traffic, and our newsletter, we can sell more ads and land more sponsors. That is actually a scalable business model, so I’ve been doubling down on that as of late.
Plus, you see the latest Netflix news? They lost 200k subscribers. Netflix is probably the most popular subscription in the world. If Netflix loses subscribers, I think every other subscription based business is going to lose subscribers over the next few months. Get ready for it.
I’ll keep you updated on this blog about how that’s going. I hope you like these kinds of updates?