We read about it all the time, how newspapers are consolidating and going out of business and the few with pockets deep enough to hang on – are all struggling with how to compete in a world which no longer expects to pay for a subscription, to access the news.

In the past, it made sense to readers to pay a nominal fee to have something as visceral and as versatile as real wood-pulpy newspapers, delivered to their door. After all, even if you did not like the news that was printed – you still would have something to wrap your fish in, not to mention the delightful delivery boy who trudged through the rain and snow, even on Saturday and Sunday mornings, who was worth paying for a job well done!

However, when moving online these same traditional newspapers have trouble charging people to look at their website.

Often when news services have tried to collect money (by setting up payment gates to their informational services), it usually resulted in a backlash, wherein loyal readers would jump ship, to seek out alternative sources to get their “online” news fix.

In almost all cases when a news service attempted to collect subscriptions fees for online news, they not only failed to collect the toll they hoped to get, but also lost readership, market share, and advertising revenue in the attempt.

Even the biggest names in news rarely provide an “exclusive product or story” which is worth paying them exclusively to receive. In fact, often the major news networks do nothing more than the average blogger does.

Take for instance the case of major networks simply crediting the Twitter account of Mr. Janis Krums and his re-tweets for their “up to the second” reporting throughout the saga of US Airway’s Flight 1549 crash landing on the Hudson river, back in Jan 2009, and during the following rescue.  In this instance, it made more sense to shut off the news and go right to the source, which was Twitter!

Therefore, for the reasons I have pointed out thus far, (and a few more) it is clear that making money in the news business, just isn’t in flat rate subscriptions.

Well then…Where is the money?

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Today we’re going to discuss the “freemium” model, and how it’s almost a requirement for a successful website. If you’re selling anything online, whether it’s ebooks, digital products or anything of that sort, then the freemium membership system we discuss below can deliver those products in the most effective and profitable way.

Business Success Means Avoiding Churn and Increasing Revenue Per Customer.

To be a business success, you’ll need to avoid customer churn (or “turnover”). If you get 100 new members, but 99 of them quit after 30 days, it’ll be hard for your business to survive. In a membership context, it’s the period of time someone will keep paying their membership fees. So while it’s vitally important to constantly acquire new customers, it’s just as important to maximize the revenue of each customer you already have. So what we’re talking about is the backend, and the marketing funnel you have in place.

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