If there’s one thing a down economy can teach publishers, it’s to not rely solely on revenue from subscriptions or ad sales. Now, as the economy has strengthened, publishers are turning to new revenue streams to lessen potential impacts of another downward swing and prepare for the possibilities of decreasing ad sales and subscription numbers. What are some of the options they are exploring to diversify their revenue streams?
- Consumer products — Some publishers are adding consumer product sales to their organizations’ revenue streams. For example, Time Inc. launched a subscription service for pet products. Other publishers sell products such as hats, t-shirts, and mugs branded with their logos.
- Reward programs — Time has also implemented a rewards program. Called People Perks, the program costs $60 per year and offers deals at more than 1,000 retailers and service providers.
- Memberships — Other publishers are offering membership programs that provide access to premium content, enhanced features, discounts, and other benefits for an annual fee. Better Homes and Gardens publisher Meredith Corp. launched its first membership site, BH&G Insider, to provide an experience beyond regular website and print products. In another membership program, Meredith partnered with Direct Wines Inc. to form the Better Homes & Gardens Wine Club. Members receive quarterly wine shipments along with suggested food pairings and wine tasting notes.
Publishers are also diversifying their income opportunities through online courses, coaching, data products, as well as online and in-person events. Others are partnering with merchandisers as sales affiliates, hosting links to merchandise in their content, and receiving commissions when readers purchase.
Hurdles and successes
What problems are publishers running into when branching into product sales? One challenge is that selling products online is different than advertising and subscription sales. Some publishers are even finding it worthwhile to hire eCommerce experts to compete with other online outlets. Those who embrace online merchandising as more than just selling t-shirts and bookmarks on the side are finding success by leveraging their audience relationships to sell related items. For example, one producer of more than 35 magazines and websites, Dennis Publishing, noted that more than 33% of its 2016 revenue was from digital — but only half of that was related to eCommerce. The income came from the publisher’s portfolio of automotive websites and, after acquiring online car dealer BuyaCar, the publisher integrated car sales into its business model. Car sales now bring in 16% of company revenue.
In this digital age, publishers often think adding new revenue streams means launching a few websites and providing digital editions of some titles. But diversification is so much more. Merchandising everything from coffee cups to cars is proving to be lucrative for some. Publishers need to be on the lookout for additional revenue streams. Today’s entrepreneurial environment proves that new revenue streams are there for those who seek them out.
Contact your Sheridan representative or visit our contact page to ask how we can help you streamline your publishing processes, reduce costs, and keep up with changes in print and publishing strategies.