Jeremy Swinfen Green, former Marketing Director

Most online publishers know that for a website to be commercially successful, it needs to embrace as many revenue streams as possible. For most media sites advertising is the dominant revenue provider. But that doesn't mean that the other revenue streams can be ignored.

Especially as ad spend in the UK currently seems set for a dip. Early 2008, the IPA reported a bigger dip in advertising revenues in the last quarter of 2007 than they had seen for 2 years. And while online may buck the trend, an advertising recession is scarcely good news for online publishers.

Is subscription the answer?

So what of other revenue streams? Subscription revenues are in trouble too. In September 2007 the New York Times announced that it was scrapping its subscription-based TimesSelect service.

One of the few other big players maintaining a substantial subscription offer is the Wall Street Journal. The jury (or rather Rupert Murdoch) is out on how long that will last: the argument is that they would make to 15 million users on a free site than they currently make from subscription with 1 million users.

It just seems too difficult for mainstream media owners like newspapers to entice people to pay for information that they can probably get free elsewhere.

Help from e-commerce

Where else can online media owners make money? The third main revenue stream is generally reckoned to be e-commerce, whether that is direct sales or affiliate deals with third parties. That at least is a revenue stream that appears to be growing without any obstacles.

However the opportunities for media owners to become major retailers are limited and the reality is that e-commerce is unlikely ever to be a major contributor to online media businesses.

The 4th way

Which leaves us with the fourth revenue stream, "pay-to-participate". If people are reluctant to pay to read content, are they more likely to pay to interact with it?

The answer seems to be "yes". For instance online dating services saw massive revenue growth in the early years of this decade and are still growing at 30% year on year; this industry provides significant revenue streams for media owners. And the same is true of many other types of pay-to-participate content - psychic readings lines, bingo, pay to enter competitions, online games, and the like.

Paying for a unique experience

Why are these services rsuccessful? When someone is charging for information like news, it is fairly easy to find an alternative free source. And people are reluctant to pay for comment and opinion. But they will pay for a unique set of experiences - the opportunity to date a particular type of person, to speak to a psychic they trust, to play a game they have been recommended, to access a personalised fitness plan...

Not only that, they will pay significant amount of money - perhaps GBP10 a month for an online fitness regime, GBP15 for a conversation with a psychic, GBP20 for a month's subscription to a dating site. They do so in large numbers; millions of people in the UK pay for these services - a very substantial revenue potential that many media owners are currently ignoring or merely experimenting with.

Uplifting ad revenues

And media owners shouldn't ignore the fact that millions of people regularly accessing dozens of pages add up to a lot of advertising dollars in addition to the pay-to-participate revenues.

Given the pressures of squeezed margins, increasing competition and reducing consumer confidence, online pay-to-participate could just be the get-out clause media owners are looking for.