When political blogger Andrew Sullivan announced this morning that he’s leaving The Daily Beast and launching an independent company called Dish Publishing, the most provocative bit of news was his intended business model. He doesn’t plan to run any ads, and instead to support the company entirely through subscription revenue.
“It’s been a pretty amazing day,” Sullivan told me. Six hours after he first made his announcement and put out his call for sign ups, he said. “We’re well into the six figures.” He described the system as a “leaky meter,” where readers can hit the “read on” button a limited number of times per month before they have to pay; it’s leaky in that readers can follow links from other sites without adding to the meter. A subscription costs at least $19.99 per year, but readers can pay as much as they want, and Sullivan estimated that about a third of the initial subscribers are paying more than the minimum.
As for why he’s taking such a dramatic stand against ads, Sullivan said that he’s watched the media industry over the past decade and found that the pursuit of ad revenue has led not just to blatant “whoring” for pageviews (for example “slideshows of topless celebrities”), but also exerted a more “subtly corrupting” influence by leading to the creation of special issues and the like, which he said are basically “gussied-up vehicles for advertising.”
“Both those avenues seem kind of desperate,” Sullivan said. “You find yourself trying to create pageviews that don’t really have any editorial basis.”
With this approach, on the other hand, Sullivan said he’s solely responsible to readers, and if he succeeds, it will be because he offered content that readers believed was worth supporting: “It really does leave it in the hands of the reader. We’re not going to get bailed out by [IAC/Daily Beast owner] Barry Diller or Credit Suisse or some ad network. They know that the readers are all we’ve got.”
Asked whether this approach can be replicated by other, less well-known bloggers, he said, “Well, we don’t know if it’s even going to work for us yet, so let’s not get ahead of ourselves.” After all, low six-figure revenue isn’t enough to sustain even a year of the Dish. At the same time, he said that smaller blogs that are “just one person blogging out of a room” will have lower costs.
“If you get rid of all the overhead … I think it is scalable with a smaller blog,” he said. “I don’t see why not.”
Sullivan plans to re-launch the blog and introduce the meter on February 1, using technology from a startup called Tinypass. Last fall, he said he talked to a number of different metering companies, but he found Tinypass most compatible with his vision.
Tinypass COO David Restrepo suggested that one reason Sullivan chose his company was its flexibility. Sullivan is one of the most high-profile bloggers to use the Tinypass service, Restrepo said (another big name is movie director Larry Clark), but the company didn’t have to build any custom products to support his needs — it’s designed to support a broad spectrum of paywall/meter/donation models.
Restrepo said that Sullivan is one of Tinypass’ first big customers in the U.S. Most of its business (the company said last fall that it’s working with more than 250 publishers) has been international thus far.
“It’s a big world, and in many countries the online advertising model even lags the advertising model for independent content in the United States,” he said.
Restrepo also predicted we’ll see more and more blogs asking for reader payments in the coming year (which, to be clear, doesn’t necessarily mean they’ll take the no-advertising approach that Sullivan is espousing).
“We’re at the end of people saying, ‘Will people pay for content online?’” Restrepo said. “That’s history. We’ve reached the beginning of asking, ‘What exact model works for the sector or the business that I’m in?”
Update: Sullivan writes, “Basically, we’ve gotten a third of a million dollars in 24 hours, with close to 12,000 paid subscribers (at last count). On average, readers paid almost $8 more than we asked for.”
Tinypass is e-commerce software for digital content. Simply put, we take the kind of technology behind The New York Times paywall and the iTunes store and make it available to everybody. Using our service sites of any size can directly charge for content in a variety of ways – pay per view, subscriptions, downloads, single purchases, etc. – while providing a great user experience.