Mar 19, 2021

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The Value of Content: Subscriptions and the Passion Economy

Have we now reached the point where the average internet user accepts that good content is worth paying for?

Host Will Francis and digital marketing expert and author Clark Boyd dissect the emergence of email newsletters and subscription services, and the rise of the "passion "economy", such as the popularity of Patreon. 

Transcript below.

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The Value of Content & the Passion Economy

Will: Welcome to Ahead of the Game, a podcast brought to you by the Digital Marketing Institute. This episode is a big Q&A where we explore an area of marketing through a leading industry expert. I'm your host, Will Francis, and today, I'll be talking to Clark Boyd, a digital marketing expert and author based in London, all about the changes taking place in how we value digital media. We seem to be moving from a world where everything was free, perhaps, in hindsight, an unrealistic expectation, to one where we're becoming increasingly accustomed to paying for valuable content through paywalls, in-app purchases, micropayments, and subscriptions. But where does this leave us in digital-content-based marketing? Hopefully, Clark can help us work that out and understand landscape as it is changing today.

[00:00:51]

Clark has worked around the world. He's helped brands like Adidas and American Express shape their digital strategy. He trains digital marketers through a variety of institutions and programs, including those like Google, Cambridge University, Imperial College London, and Columbia University. Clark, hello. Welcome to back to the podcast. It's really good to see you again.

[00:01:12]

Clark: Hi, Will. Great to be here, as always. How are you?

[00:01:16]

Will: Very good, thank you. Very good. And, yeah, I can't wait to kind of get into this topic with you because I know it's something that you think about. You know, from podcasts and email newsletters through to the rise of services like Patreon and even OnlyFans, I'm seeing two trends emerging that I'd like to talk about and unpack really.

[00:01:39]

There's one where I think the average internet user is beginning to accept that good content can and indeed should cost money. And another one where, on the other side, the creators are leveraging new tools, new platforms to monetize their actually really hard work in new and different ways that work better for them and also, potentially, for the audience as well. Does that align with what you're seeing develop at the moment?

[00:02:10]

Clark: Yeah. I think we're seeing a whole change in the economy that underpins the internet itself. The whole financial fabric of how we consume media and pay for it is shifting quite a bit. And I think actually it's a little like we talk about digital transformation and we talk about how it's not just the technology, it's a mindset, it's a business model, it's, you know, everything under the sun. But there's something in that. You do need to change in the new age, the technology enables new things. If we look at the way things are online, what we're seeing is people able to connect directly with their audience in a way that before they had to go through an intermediary. You would have to write for a newspaper to reach your audience. And, if we think about how things have worked online, it's been more supposed digitization, we would call it, the newspapers have moved their content online and stuck it behind a paywall. But it hasn't been that sense of digital transformation where everything is completely different. There's a new business model, new operating model. And that's where we're seeing people able to connect with the content they want to pay a fair price for it, if that's what they agree it is, and individuals able to monetize their individual passions. Which is a key part of this, people like to call it "the passion economy." And that's really what we mean is is turning your passion into a job in a way that you could never have done before.

[00:03:38]

Will: Yeah, absolutely. I mean I'm seeing certainly on platforms like Substack where I know you publish your newsletter. Although your newsletter is currently free. Yeah, it's a bargain at $0 for life. But I'm seeing on Substack where you can pay for newsletters, I pay for a couple of newsletters there, and I'm seeing writers basically quit their jobs at, you know, quite big prestigious news organizations to basically write on Substack and work for themselves and monetize their audience completely independently. Could anyone potentially do that? Is that an option for anyone?

[00:04:22]

Clark: Yeah. So, like you say, Will, it is a question I think about quite a bit and I do have some personal experience with this, both painful and unpleasurable, I suppose, along the way. It's tricky for just anyone to do it. And the reason I think about the question so much is that the examples that we always see are people who were writing for "The New York Times," they were writing for "The Guardian," or "The Telegraph," or whoever and they had a built-in audience. And it was classic disintermediation, I suppose, they just cut out the middleman. They did some quick sums and thought, "I'm not getting paid a huge amount at this newspaper. My content gets a lot of eyeballs. What if I just take my content and get people to pay for it directly?"

[00:05:05]

Now, that still takes courage and, you know, it's great to see and it's admirable and so on, and people, obviously, like it. The tricky bit that we haven't really mastered yet is new writers starting from scratch and building their audience exclusively on a platform like Patreon, like Substack, or anything like that. So, we're still dependent a little bit on those big publications.

[00:05:29]

And you might say, "Well, it creates a new opportunity because for every writer that leaves there might be an empty chair on the editorial team. So, new people are always coming in." And that is, obviously, true, to some extent. But I think the big thing that's underpinning all of this is the economics aren't really working for the newspapers themselves, hence why people are finding it more attractive to go and work for themselves and write and get paid directly. Jobs are being cut all the time. Salaries are, if you're a high performer at a newspaper, not always gonna be in line with your specific performance as an individual, so, you'll want to leave.

[00:06:03]

So, the economic circumstances are there to create kind of the desire to go and work on your own. And that's fine if you've got a built-in audience. It's fine if you were early on twitter and you've got 100,000 followers to take with you. The big question I think facing a lot of people, and probably facing marketers and facing brands as well, is, well, how do you go from a standing start on these platforms? How do you build an audience within them? How do you get your content found? I don't think that question has been answered convincingly yet. Hopefully, I will give it a good stab today though.

[00:06:34]

Will: Yeah, I mean I suppose what I wanna get to today as well is, like I said in the intro, where does it leave digital marketers whose kind of job, at the moment, I think, if you're doing it right, is to create valuable content for the right audience? So, valuable relevant content. I think that's, essentially, a large part of your job as a digital marketer, outside of paid marketing. So, you know, I suppose where I think this might be going is, if we are tuning into high-value content that we're happy to pay for, does that mean that we're also potentially tuning out of that free content that we were happy to kind of gobble up, that low-value free content and mixed in with some ads, because that's what keeps the lights on? You know, a platform like Facebook, for instance. So, you know, is the audience gonna move away from just that low-quality free content do you think?

[00:07:33]

Clark: You would certainly imagine so. And I think there are deep-rooted reasons for that. I don't want to come across as just a dry money-obsessed cynic about these things, but the way that Facebook makes its money affects the type of content that is created on the platform. The two things can't be separated. So, you create the kind of content that gets you in front of people on Facebook. And what does Facebook want to promote? Well, it wants you to get some engagement so it can sell that on the side, and the two things are always tied. If you look at the quality of content on local-newspaper websites, and, you know, I go to a few of them sometimes to check out some local stories back at home, it's painful because you know why they're putting ads everywhere, you know why they're creating clickbait content. Publications that used to be highly reputable are now having to get involved in this race to the bottom because it is all based on these advertising revenues.

[00:08:33]

And some have shifted to subscription. I know others haven't but the idea was something like...Substack is a little more structured around this but Patreon is certainly true and allows for a lot of creativity is you are getting that direct relation with the content itself. That is what you're paying for. What we've seen is creators who were going on YouTube and they were getting millions of views and they were spending a lot of time creating this content and then they were looking at their advertising revenues and...there's a few hundred dollars in there. You know, maybe a couple of thousand, if they're lucky. You have to really make it big to make money out of that shadow economy. Now they're able to take it quite directly and ask people to pay a fair price for it, cut those middlemen out of the loop.

[00:09:15]

You do wonder where something like that ends though because now that they've moved to somewhere like Substack, Substack is taking a cut, maybe people start moving more directly through microtransactions to getting people to their websites and going straight through there and cutting out the platforms again.

[00:09:30]

But, in general, that's where I think there's a bit of a challenge here is the people that don't have that built-in audience moving to these platforms and trying to create something from scratch. It does mean that we have another way to find content that we want, and that's why we were putting up with the free stuff, you know, we were willing to put up with the ads all over the place, we would read clickbait articles because there was a nugget of truth we wanted in there. We didn't have a choice. Now that we do, I can't see why we would tolerate it.

[00:09:59]

Will: Well, it's night and day, isn't it? When you go between, yeah, free ad-supported content and content that you have to pay for is quite different. And you're right, the content that you pay for is created far more authentically, it's not created with a clickbait type intention. I suppose the interesting question then, back to digital marketing and the content creators within that, like ourselves, like myself anyway, do you think a customer would ever pay for a brand's content?

[00:10:36]

Clark: Yeah, it's a great question. I we've been thinking about this over the last week or so, whether there is an opportunity for brands to do that. And, personally, I've got to say, I don't see why not. I do immediately see why not but I think that can be overcome would be a better way of going about it. Because, if we think of brand content as we know it today, then brands put it out there because they have a sense that it sort of works. You know, people talk about, in the olden days, we said, "50% of the budget's working, I don't know which half," I think it's changed now to the sense of thinking, "97% of my budget doesn't work, and I know it doesn't." You know, it's not actually that much better really. We've got a bit more of a sense that things are working vaguely. And we put this content out, people don't like it, but it's affecting them a little bit.

[00:11:28]

That's subconscious. To make it a conscious exercise where people are saying, "I genuinely want to seek this out and want to enjoy it," it would have to be more, I suppose, editorial content. You look at things like...Lloyds Bank has just put out its startup guide and it's 250 pages of really fantastic content written by a lot of guest writers on there. And you know why they want you to read it from Lloyds, you know they're gonna get their point of view across and so on, but it's a big piece of work that's worth a little bit of investment from a potential customer to see it.

[00:12:01]

So, it has to be something that the customers consciously want. And the way that we tend to think about marketing is that subconscious element of, "You know, advertising does work. It might annoy people but the message gets through. They get to know our brand." They're not gonna pay for that. What they will pay for is something maybe a little more rational, maybe something that's a bit more entertaining that's more about collaborations with people they already like and already know. But we talk about brands being publishers and I just have never really thought that that was true in the sense of being responsible for monetizing your content and doing something with it. Yes, they're creating content, they're certainly content creators, but to be a publisher is something, I think, all together different. And it's a little bit independent quite often, you stand on your own editorial standards. And we haven't seen that.

[00:12:48]

I think there could be an opportunity for brands to be the first though to go...whether it is behind a paywall or they include it as part of a broader package or a membership package that people do get, a little bit like someone like American Express would do, but give people something quite exclusive, quite inventive, unexpected, and it'd be a good way of building a bit more loyalty behind it. But no one's done it so far.

[00:13:13]

Will: I mean it's not too dissimilar an idea from a brand magazine, you know, brands like LEGO have had a brand magazine of some sort for decades. Airbnb recently, like a few years ago, launched a brand magazine "NET-A-PORTER," the luxury fashion retailer. You know, it's that I suppose, isn't it? But the content has to be very high value? I'm not sure...I mean would you pay to see a Weetabix with some beans on it?

[00:13:41]

Clark: Personally? I'd pay not to.

[00:13:45]

Will: But that's what I'm talking about, isn't? It's that kind of fun social-media content. Obviously, that is made sort of jocular and silly and throwaway because that's all that it is and no one would ever, in their right mind, pay for that. And even a brand magazine, if it is just marketing dressed up, no one would pay for that either. But like, if you look at...I mean one of my favorite content marketers in the world has to be LEGO. And what I love is, I use it as an example a lot, it's "The LEGO Movie." Right? Imagine that, a 90-minute ad for plastic bricks that people will pay 10 quid to go and sit in front of with their whole family. You know, 10 quid each, like, so, 50 quid for a family to go and watch a 90-minute ad for plastic bricks. That's genius content marketing.

[00:14:32]

And I suppose it's that really, it's just, obviously, in a more immediate kind of digital space, but I do think that, you know, if I just look around anecdotally, my family and my friends group, people are just becoming way more used to the idea of paying for stuff they really want. And anyway, you know, if you've only got 2 or 3 hours a day to consume digital content, I don't think that changes much over time. How you spend that time changes. And, if you use more of that time consuming stuff you've paid for that's quality and worthwhile, the free stuff just becomes increasingly degraded in your eyes and loses its value and you probably become...I do think there will be a growing disinterest in it over time. That's the kind of best read I've got on it really. And sort of the bit that I guess that I get asked about a lot, and it's the missing piece, is podcasts. You know, they are free. They're totally free and they're just out in the wild mostly. But more people are starting to gate those as well, you know.

[00:15:34]

Clark: Yeah. So, there are a couple of different ways of responding to that. I mean the first part of a response is that we're starting to normalize paying for this sort of content to the extent that it wouldn't be crazy for people to pay for brand content if it is genuinely interesting. I mean "The LEGO Movie" is an extreme example, I've seen that movie about, say, 20 times now. I need to watch the second one again though, I went to see it in 4D and I didn't know what that meant until I got in there. But I was shaking around and there was water spraying...and I can't remember any of the movie I was terrified the whole time, just being shaken. Who pays to be shaken? But anyway, yeah, that's a very difficult one to match. And not everybody has LEGO's pulling power or shaking power, shall we say. But it is normalizing that we will pay for content, now it is becoming something that we would expect.

[00:16:35]

The next question is then, of course, well, where's the saturation point here? Because are we gonna start totaling up how much we're paying in subscriptions? I would loath to do it, at the moment. I'm sure, if I had a financial planner that would tell me to cut back on the subscriptions, it's getting a bit silly at this stage. And where do we stop with that, you know? If we're going to start paying for individual writers rather than paying for newspapers, then this great unbundling that we're seeing extending to brands as well who used to pay to advertise to us asking for some money for their content, that's where I just wonder if the economic model for brands is a bit different where they have more of a premium experience and it is bundled together with other aspects of the brand. Or it's used as a lost leader to get people engaged because they know that they can influence people in a way that will be important for the company a little bit later on rather than going for the short-term thrill of asking for, you know, £2 or €2 to watch this.

[00:17:37]

Will: Well, that's true. It's a marketing cost, isn't it? Creating good content and marketing costs. But I would still challenge marketers to ask themselves, "Would people pay for this?" Like, "Does this sit among the best content that your average audience member consumes? Is it that good?" Because if it isn't, you're just the kind of low-value free stuff that isn't really cutting through. And, you know, with the organic reach of social and the saturation of various channels, you're just one of a million people just chucking more free stuff into the ether, really. It doesn't cut through to an extreme extent today.

[00:18:20]

Clark: Yeah. And, in that world where...and god knows I've done it plenty of times and spent years doing it, where you have your content calendar, you're creating 10 pieces of content a week for a brand and you're putting it out there, what you're typically competing with is other brands doing the same thing. In a world where you have subscription-based content to compete with that is ad-free and that the writers are, you know, if they're doing really well at it, making a great living from and have great incentive to make the best content they can, that's your new competition for attention.

[00:18:56]

So, you are going to find it much harder to get that scarce commodity of attention that you were always looking for in the first place. Yeah, you were competing before on social media where it's flashing past and, if you make something thumb-stopping, people will look at it, and that's great, and you can say you've got an impression, maybe a click, maybe a subscription. But now you're competing with people who are paying, you know, people who are paying a fortune, in my case, anyway, to subscribe to all these people, to subscribe to all these publications. Why would I look at a brand's content alongside that if it doesn't meet those standards?

[00:19:29]

Will: Hello. A quick reminder from me that, if you're enjoying our podcast series, why not become a member of the DMI so you can enjoy loads more content from webinars and case studies to tool kits and more real-life insights from the world of digital marketing? Head to digitalmarketinginstitute.com/ahead-of-the-game, [SP] sign up for free. Now back to the podcast.

Okay. And, so, what do you think is driving this adoption of subscribing as a human behavior across the world? You know, we live in this subscription-led world where even some of the products that we buy...you know, on Amazon, if you choose a consumable product, you're incentivized to subscribe to it. We subscribe to things like beauty boxes and Dollar Shave Club, we've got all these media-streaming subscriptions. What is driving that huge kind of boom in the subscription business model?

[00:20:25]

Clark: Honest answer in terms of what is driving it to begin with is the desire of brands to have reliable monthly revenue streams. And I initially saw this shift towards subscriptions, especially watching it up close in an office in New York and just watching the boxes arrive every day for people with everything from dog toys to cat food. And there was even gym gear, you get a box of gym gear every month. And who needs new gym gear every month? But people were getting a little bit addicted to this, and I thought, "It's not really being driven by anything you want," I mean you want the novelty and so on but that'll wear off. It's brands wanting reliable revenues to come in every month.

[00:21:12]

But what we're also seeing is when, we think broadly about the topic we've been talking about is this shift towards more niche services, more niche content as well. We're seeing increased demands from people, you know, they expect...if we look at the Amazon version of this, they expect things to turn up free and they expect it to turn up quickly. And the mind quickly moves to, "What's next? What else can I have from them?" It's removing friction at every stage. So, if it's subscription, well, now I don't need to think about dishwasher tablets turning up every month, they'll just be there, and that removes some friction from my daily life. But it's the diversification that we've seen that has been very interesting as well.

[00:21:54]

So, if you look at the Amazon one it's...you could look at it as almost Amazon versus Etsy, as two different sides of this coin, where you've got the Amazon model, which is, of course, going to be about commoditized supply, your deodorant arrives every so often and you know what it is, and that's fine, but there's also a subscription world of niche content. It's around children's books and things like that that turn up every month. And they're unexpected, you don't know what you're gonna get. It's book of the month, it's gem of the month, or whatever else.

[00:22:26]

And it does actually seem to have some staying power. There were some real cynics in the industry about that as well. But it ties in with where things are. If you look at the world we've been living in for the last year and what it will leave behind, contact free things just being delivered, knowing what we're paying for things up front...it ties into the convenient lifestyle that I think we have today.

[00:22:48]

Will: It's interesting, now, isn't it? I mean I would always put that to any company really, "How can you subscriptionize some aspect of your business?" I mean Amazon's a great example, I mean there wasn't anything that was obvious really in terms of subscriptionize and Amazon, but then they just basically, on any consumable product, they have this thing where there's 15% off if you subscribe. And I was resistant to that for a long time and actually recently I just swallowed it and I said, "You know, I'm actually gonna subscribe to the face moisturizer that I buy there because I can't get it anywhere else." And every 3 months, and bang...it actually arrived the other day bang on time, I got it just right...there was something very satisfying about that. And I thought, "That's a little life hack. I don't have to worry about that now, that's just gonna be there. I'm gonna have this constant supply of it." And I get it a bit cheaper, it was already cheaper on Amazon.

[00:23:40]

And, so, I think that, you know, the challenges to any company to think about what side of your business can you subscriptionize and turn into that kind of product...because you're right, monthly recurring revenue, MRR, is like one of the big buzzwords of the tech world and the business world right now. Because it does provide that sustainability for a business and predictability. But also, in terms of content, like you say, you talked about this, you used the phrase "the great unbundling." Just explain to me what that is.

[00:24:15]

Clark: Yeah. So, it's a famous quote from Marc Andreasson, a while ago, saying that "there are only two ways to make money, bundling and unbundling." And you can look back historically and see these patterns play out. It's like all those peppy bromides, it's a bit of a simplification of reality, but we can definitely see it happening. You know, you look at newspapers being, say, bundled together, different types of content and writers and so on. And then they're unbundled, the writers move the Substack and they become individual products. And now you can even see it with groups of, say, TV groups and they spin out different parts of it and they move out to be their own product. And then they bring them back onto the big umbrella brand a little bit later on because it's kind of how trends go. We get used to something, then it reaches a saturation point, and then we do something different to bring it all back.

[00:25:06]

And I actually think, when you look at something like Substack and you think about the fact that people could end up having 15, 20, 30 subscriptions on there, at what point do they start bundling those? At what point is there a tech pack on there and they share the revenue equally amongst a group of tech writers on there, or something like that? You know, if we look at it this way, every time we see an unbundling, like we've seen recently of direct-to-consumer brands, disintermediation, companies going straight to the customer, not going through the traditional supply chains or the supermarkets or whatever, we're now seeing some of those companies going back into the supermarkets. Completely direct-to-consumer brands now selling at Walmart and being bundled together as pax there.

[00:25:48]

And one trend we see at the minute, while some things are being unbundled, is other things being bundled together. So, you see gyms offering a full-health package where it's not just about, say, taking your blood pressure when you join, it's about monitoring these things, offering you health insurance alongside it, offering you a food subscription as well. So, we can see the great unbundling of, say, newspaper writers going out on their own. Other things are being bundled at the same time. And if we look at history that way, it's a bit of a simple overview but it does help to explain quite a lot of what we see.

[00:26:22]

Will: Yeah, it's interesting, isn't it? And it's this kind of constant tug of war between, I suppose, the bundlers and the individual creators. And that's been happening a long time...I mean I remember, when I worked at Myspace in the noughties, obviously, you know, we were part of something that was happening where the music industry was essentially becoming unbundled, if you wanna call it that. But we referred to it differently, we referred to it as "the DIY economy." And, essentially, people were saying, "Hang on, I don't need a music label to come and take most of my," you know, "royalties and what have you. I can actually just go direct to people who love," you know, "rap metal," or whatever that particular music genre was, "and have a direct relationship with them that I have complete control over. And when I want them to buy tickets from me or I want them to buy records, I can do that straight to them through any channel that I choose and take all the money essentially. And I don't have to wait to be spotted by some ANR talent spotter." And that was kind of the big thing happening there.

[00:27:27]

But, of course, what happened is Spotify came along and various things happened. Similar things happened with...I only noticed this so recently, embarrassingly recently, but the sort of death of paparazzi magazines. Because, essentially, every celebrity from the Kardashians down...is their own paparazzi now through Instagram. And they own that relationship. But then it requires a platform like Instagram to bundle it up into a feed. And it's sort of this constant tension, isn't it, between the two things. And I think that, from a digital marketer's point of view, their predicament is one where, "To what extent do we want to own our relationship with our audience?" you know, "do we need these big platforms?"

[00:28:13]

Because, of course, a lot of digital marketers, at the moment, are questioning whether it's ethically sound to be on a platform like, I don't know, Facebook or Instagram or Twitter, what kind of other content are they appearing alongside, and looking to have maybe more direct relationships through things like newsletters and podcasts. Right?

[00:28:32]

Clark: You know, I mentioned in cool dry terms that companies want this monthly recurring revenue from their subscription services. It's also true that you have a lot more security actually over this. So, one of the big things that comes up when I have conversations with CMOs and I get the occasional call from, you know, former clients and things, second opinion on things, they ask, "Why do we have to pay to reach our own customers on Facebook? It just seems crazy." You know, "I understand why it's happening but, when you really drill it down to its essence, it just doesn't feel like a good spend of our money or our limited budget that we have."

[00:29:15]

And they also say they keep changing the rules. You know, "We think we've got things right, and then, on a whim, they can change things altogether." And that affects individuals of course but it's really important for brands. You know, they want to be able to project how they're gonna be able to reach their customers if you're trying to set a strategy. You can't build into it that there's gonna be 12 unexpected changes in the next month in the algorithm, you know, you just have to be reactive to that and do what you can. If you're working through a platform like, whether it's Patreon or somewhere else...I mean for a brand, obviously, Patreon not necessarily the right place to be but, if you're dealing with your customers directly through somewhere like Substack where you can have control over it, there's also a bit more stability and predictability around the relationship that you can build. So, yes, it's direct but you also know the rules of the game. You know it's not gonna change too much, you now the rug won't be pulled from under you. Like it quite often is for Facebook and for people that need to plan 12 months ahead. And they're used to stability in other areas of their business. It actually undermines confidence in digital marketing quite often in a way that we could do without. There are enough scandals going on without that sort of thing happening as well. So, I think that can be an appealing part of this for brands as well as just maybe getting some revenues out of it.

[00:30:33]

Will: True. And something I always tell people is, you know, by all means, grow audiences on platforms but just know that it's never really yours. And it's only by having people's email addresses or phone numbers, primarily email addresses, that's where you really own that data and you own the relationship with people. Because you're right, algorithms can change, platforms can die and go out of business, there's lots of reasons why something you've built up somewhere suddenly you're very starkly reminded that it was never yours, you know, in the first place, like, "Your Facebook page isn't yours," it's Facebook's and they can do what they want with it and they can change it however they want at a moment's notice. So...

[00:31:17]

Clark: Yeah. But I would say as well, if we think about this notion of, whether we want to call it disintermediation, cutting out the middleman, and so on, there have been some brands recently, some that I know, you know, personally from work with them, others a bit more anecdotally, where they've gone down this path because, yes, it makes sense, you will have direct relationships with the customer, you will have direct access to that data, and first-party data being really important at the moment. They've also found it quite difficult because quite often those middlemen play an important role. So, I mentioned that, if you're an individual writer, then you might have some frustrations working at New York Times but they're the reason you can go on and make $100,000 a year on Substack.

[00:32:07]

A company like Adidas actually trying to go direct to their customers, well, they and their rivals, not just them, find that these intermediaries, you know, the footlocker and those kinds of people of this world, play a really important role getting their product out to customers. They have really optimized supply chains that help to keep those costs down. And it really means that, in the end, they find they have to have a hybrid approach. If you wanna go direct to the customer, you take the responsibility for that as well. You have to manage it, you have to manage all of that data, you have to manage the supply chain, the delivery. Everything that those middlemen can handle for you as well. And we see things like direct consumer startups that, say, sell sparkling water end up going through supermarkets in the end because the economics just don't make any sense for them.

[00:32:55]

Will: No, it's true. I write books as well, like you write, so, I did consider self-publishing, you know, I looked at self-publishing. And actually, when I realized what it is that a book publisher does, mostly the distribution to retail, obviously the printing, the editing, the proofing, I mean it's just there's no way I would wanna take that on. And yeah, so, for some people who there isn't a publisher that will perhaps, you know, take on their topic or something like that, great, but we will always need those gatekeepers. I think we talked about this a bit off the record a few days ago about, you know, it's all very well people leaving their jobs at places like "The Guardian" or "The New York Times," but, you know, without those employers, they never would be known, they'd never have an audience in the first place to port over to their own newsletter list. Right?

[00:33:52]

I mean, in terms of brands charging for their content, you know, a really good example I think of that is, I thought about it now, is...as a parent, by the way, once you become a parent, if you were a bit reluctant to subscribe to things, that does kinda go out the window. Because what happens is, you know, the age of maybe about 3, your kid gets hold of like iPads or iPhones and subscriptions, the good apps, the apps that aren't full of horrible ads or, you know, that are well-made require subscriptions. And, so, you know, I subscribe to things like Hot Wheels, "Thomas the Tank Engine," those sort of franchises, toy franchises. And they do charge subscriptions for their content and, you know, for access to their apps. Which I think is good because the quality of them is high, there's no two ways about it, it's worth paying for.

[00:34:42]

And I think that's what it really all comes down to is, if you're demanding attention or you're, you know, asking for attention in any way, in any channel, from an audience, it's really on you to create quality valuable content that is squarely relevant to your target audience. I know I probably say that a lot on this podcast but that's all your role is as a digital marketer creating content. And, so, I think that's really the takeaway for our listeners is, you know, if you've got something that you really think is worth paying for, by all means, put it out there. But, ultimately, creating that really high-value content is essentially a marketing cost. That's essential in getting you seen and noticed in an increasingly noisy world. Right?

[00:35:31]

Clark: Yeah. If you want to charge for a subscription-based service that is content-focused you need to learn a bit from what is actually working for these individual content creators. You know. why do people subscribe to that content? It's different to paying for it one-off. Because if I could just pay for the occasional post by a writer, then would that not be more appealing? You know, I've got enough to read already, and yet, no, we do subscribe because there's a connection there and because we expect that the next content is also going to be good and we don't wanna miss out on it.

[00:36:08]

That's the bit that is a bit trickier for brands to get into. Why would you subscribe specifically? We know there's a willingness amongst people. We know it taps into something psychological that they do want. But it's very different to paying for a one-off report or just paying for, say, an app that you can play. To get new content coming out every so often, you have to create that sense of anticipation, of not wanting to miss out, of thinking, "This is always going to be fantastic content. I know the quality will be good no matter what," and then you might be more willing to part with that money every month. But I think that's a bit of a shift that people need to understand is, "Why do people subscribe specifically?" They can pay one-off to see these things. Microtransactions will become much bigger, well, they'll remain small but you know what I mean, in the future. So, why would people give you that recurring revenue every month? It has to be good, has to be consistent. They have to feel like they'd miss out if they didn't.

[00:37:05]

Will: Yeah, absolutely. So, you do think that micropayments will become widely adopted, someone will crack that?

[00:37:12]

Clark: Well, something like that takes a reconfiguration of a lot of the online infrastructure that we have. It is really about the ways that you track and tag and understand those events that would trigger a transaction and what people are paying for, what they're not, what it's hooked up to, how they are made aware of what they're spending on these things. I mean, in the short term, the more likely thing to happen is we have more apps that help us manage our subscriptions where you can stop them, you can pause them, you can do things that put you a bit more in control.

[00:37:47]

At the moment, I don't know about anyone else, I have a spreadsheet where I'm trying to keep track of my subscriptions. Because there aren't that many good apps that do it. There are a few that are getting a bit bigger, that seems like the more likely thing in the short term. Maybe even a bit more bundling, a bit like Apple's News+ where you can pay your $5 or $6 a month, I think it is something like that, and then you get access to a whole load of newspapers on there. Because paying for them individually would just be prohibitive. So, that'll probably be the short-term measure.

[00:38:16]

Longer term, as part of a reconfiguration of the online world, you could certainly see something like microtransactions coming into it. What I would be concerned about, aside from the hardwiring of that and it being very complex, is do you just get clickbait content again? You know, how do we use microtransactions to incentivize the kind of content that we want to be put out there? It seems like a simple solution to a complex problem until you think about the knock-on effects and what might happen.

[00:38:44]

Will: And just for the benefit of listeners, just define what a microtransaction actually is.

[00:38:50]

Clark: Oh yeah, good points. Should probably do that before I dive into waxing lyrical about it. So, these are just very small transactions that would be triggered by, say, me reading an article. It would be a fraction of a penny would be paid towards the content creator for me reading it. So, you might have it set up so that the reader pays a little bit more from however long they read within the article. You make it 100% of the way through, you get paid a little bit more. And it's all tied to a digital wallet, so, the money will come out of there automatically. There's a lot of complexity that comes with it. You can see why it's appealing in theory but we're probably a bit of a distance away from this happening to all of us.

[00:39:30]

Will: Yeah, that's obviously worth considering, in light of the fact that, you know, if the average CPM on display advertising, even a generous £10 CPM, which is £10 per 1,000 impressions, which is a penny per impression...so, let's say a newspaper makes at best a penny out of you reading an article from the ads, or maybe there's two or three ads on there, two or three pence, something like that, it would be, yeah, better for everyone except the ad platforms. If that was just essentially paid for by the reader. Right?

[00:40:07]

Clark: Yeah. It's a form of cutting out the middleman, I suppose, it's this whole this shadow economy that has worked for a lot of people and has really fueled a lot of the internet as we know it, that people don't think about too much. They're now starting to think about, they're realizing that, you know, as people keep saying, they are the products, I suppose, because it's their attention that's being monetized in the background.

[00:40:31]

Will: Yeah. But then, about a third of internet users use ad blockers anyway now, so, and that can only go up because, once you've used one, you never wanna go back. So, yeah, I think clearly someone's gonna crack microtransactions. Facebook tried it, 10 or more years ago, because of the game economy around games like FarmVille, back in the day. But I'm sure someone will create a platform like that, it could be someone like even Apple, who knows.

[00:41:02]

We talked, at the very beginning, about this idea of a passion economy, you know, people essentially turn in the thing that they're really into and, so, no loads about into a revenue stream just in their personal life. People do this through things like Skillshare where they share knowledge, they might do it through something like OnlyFans, which is quite associated with adult content but also does attract creators of other stripes as well...but Patreon is probably the best known one where, essentially, when you sign up to a creator, you agree to pay a certain amount every time they publish a new blog or a new video. Do you think there's legs on that model? Do you think that's gonna be around for a lot longer?

[00:41:49]

Clark: I think it's really interesting actually, I'm really fascinated by things like Patreon. It's, as its name suggests, a little bit like the old patronage system where, you know, in the renaissance, you'd have specific artists that'd have their patrons and they create paintings for them. And we don't really have anything like that in the digital world, or we haven't had up until this point. It's really interesting because you have people making a good living out of things that they probably spent their whole lives being told you cannot make a living out of this. And that's probably why they went into accountancy or law or whatever but actually they love tap dancing. And, on Patreon, you can find a thousand people out there that are willing to pay a bit of money for your tap-dancing content and they absolutely love it. And you can make more than you were making before just off the back of that.

[00:42:44]

So, I, at first, had some dystopian vision of what Patreon might turn us all into where you could draw a direct line from Simon Cowell's TV shows and it ends up with all of us just sitting in our spare bedrooms singing into our mics and all just desperately trying to have talent so that we could actually make enough money to put food on the table. And the big challenge with something like Patreon is, well, what about the jobs that are really valuable but that aren't passion jobs, that aren't things that, you know, you would pay $10 a month to see someone do but that is really important? Does that become devalued by society while we all just have more free time and we wanna be entertained and we end up paying a lot more for those sorts of things?

[00:43:27]

But, at a base level, I am actually very interested in what they've been doing. They've been growing at a rate of over 30% a year for the last 6 years. They've noticed a big uptick in the number of people willing to pay over $1,000 per year towards an individual content creator. That number...I think over 50% of the people willing to do that and actually paying over $1,000 a year happened in 2020. And they've been going for about 7 years now.

[00:43:54]

Will: It's been a notably big year for them, yeah.

[00:43:57]

Clark: Yeah, yeah. And they are said to go public they say as well. And, yeah, it could be a huge area of growth for individuals. Again, you have that challenge of marketing yourself. Actually, you know, we might think, "Oh, well, what does it mean for marketers?" it all comes back to marketing. If these people can't market themselves, they go onto Patreon and nobody's interested and they don't really get anywhere. They need to be able to promote themselves, create the content that people want.

[00:44:25]

And we've seen some people become...you know, just anecdotally, friends of mine that make decent money out of Patreon. They do end up a little bit tied to...their audience becomes sort of their new boss, in a way. And they can get very dispirited when people start unsubscribing. So, say you do something you're really passionate about. You play the piano and that's really your thing and you do lessons and you decide to do something that's really close to your heart, and 10% of your subscribers leave and stop paying off the back of it. You know, little things like that happen where people are getting used to having to be resilient, and small-business owners as well. You know, Patreon makes us think it is just maybe do a bit of tap dancing, or whatever you're passionate about, or a better pottery. And it is true but you're also running a small business at the same time with everything that comes with it. And there's not a huge amount of support for people there, there's no safety net, you know, you need your subscribers or else you're back to square one.

[00:45:21]

Will: Yeah, absolutely. It is interesting, isn't it? I think it all ties into the working from home bit. I think work is becoming just...it's losing its shape, it's not like the work our parents did, the 9 till 5. And it's just losing its shape, in lots of ways, and people's careers...people don't have lifelong careers, they have 2-year-long careers, as was talked about in a recent episode we did with recruitment specialists. And, you know, it's all losing its shape. And, so, I think, yes, some people are gonna maybe do their day job some of the time, their Patreon stuff some of the time. And it'll be really interesting to see how that plays out. But, like I've said a few times, I think the positive thing off the back of that is that, ultimately, the content...you know, this is what I wish for my kids, okay, is that the content that they consume when they grow up is all stuff that they've actively chosen to consume, it's not stuff that has landed in front of them because an algorithm decided that that will keep them on the platform for longer. It's content that they have gone, "You know what, I'm gonna watch 20 minutes of that really great tap dancer that, every time he publishes a new video, you know, it takes $5 out of my bank account, but I'm really happy about that." And they actively make that choice to sit down and watch it. And then they go and do something else.

[00:46:42]

And I know I'm maybe living in fantasyland, that sounds like a really healthy relationship with digital media. That will challenge digital marketers...you know we joked, I joked about the beans on Weetabix thing, you know, that happened this last week, which was a very viral social post that was lauded and admired by the social-media management community, but, you know, ultimately, how much longer can that content cut through and that approach cut through? And, at some point, you kinda do have to be LEGO and you have to go, "You know what? Maybe not 100 okay social posts, maybe we put all that resource into creating 1 amazing piece of film or one fantastic resource that is gonna be useful for years for the people that are really into what we do," or something like that. And it's all about quality over quantity but to an extreme degree I think is the only way out of this for brands. That's my personal opinion.

[00:47:43]

Clark: Yeah. You mentioned that as being maybe a utopian vision of the future. It's the way some people remember the past of the internet, the early days of wacky creators and people doing things that were a bit zany.

[00:47:56]

Will: Do remember surfing the web?

[00:47:59]

Clark: Yeah, and it wasn't always about, you know, just creating what will go straight to the top of Google search. And it forces us to think in these very direct ways. You know, people are starting to think and loosen up. And it's a technological thing, that I'm sure we'll talk about at other times, there are reasons why it's now enabling this creativity where we don't have the same rigid formulaic approaches to discovering content. And it means people are a little bit freer actually to connect with audiences through this kind of content, to create their own careers. And, yeah, it's easy to be overly-optimistic. Actually, difficult after the year we've all had but let's end on that positive note, I guess. I think this kind of passion economy can lead us towards that. It's a big step forward and an important and positive one, from the idea of the gig economy. It's more human. Now it's more about people connecting with an audience than people just being reduced to their job or their task. You know, it's adding a layer to that, which I think can only be a positive.

[00:49:00]

Will: Indeed, indeed. Well, that's a nice note to end on. Thanks so much for that, it was a really interesting chat, a very interesting topic and one that I think would be just fascinating to see how it develops over the next year, you know, in the immediate future. So, thanks a lot. Just remind our listeners where they can find you online and where they can subscribe to your fabulous insight-packed newsletter?

[00:49:25]

Clark: Actually yes, I do have something to sell, broadly speaking. Although it is a free newsletter. On Substack, hence a lot of talking about Substack, I suppose. Because I know I write a weekly newsletter called "Hi, Tech," you'll find it on there, H-I-T-E-C-H. And you can find me anywhere else just by searching for Clark Boyd on Twitter and LinkedIn are always good if you wanna have a bit of a chat, you can reach me on there.

[00:49:48]

Will: Are you the only Clark Boyd in the world?

[00:49:50]

Clark: No. I actually once added all the others on Facebook and it led to some weird conversations, and I had to remove them all as friends. I don't know why I thought that was a good idea. We're talking really early Facebook here, like 2006. I thought, "Where are the other Clark Boyds?" there were 13 of them. Mainly in the Atlanta, Georgia, area and a few in California. And we all had a short chat, and then I removed them. But they're not on LinkedIn.

[00:50:16]

Will: Okay, that's great. So, you're easy to find, that's very handy. Well, look, thanks very much. Take care of yourself. And I'll, hopefully, chat to you again soon. Cheers, Clark.

[00:50:24]

Clark: Brilliant. Thanks, Will. Speak soon.

[00:50:26]

Will: If you enjoyed this episode, subscribe wherever you get your podcasts. And for more information about transforming your marketing career through certified online training, head to digitalmarketinginstitute.com. Thanks for listening.

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Clark Boyd
Clark Boyd

Clark Boyd is a digital strategy consultant, author, and trainer. Over the last 12 years, he has devised and implemented international marketing strategies for brands including American Express, Adidas, and General Motors.

Today, Clark works with business schools at the University of Cambridge, Imperial College London, and Columbia University to design and deliver their executive-education courses on data analytics and digital marketing. 

Clark is a certified Google trainer and runs Google workshops across Europe and the Middle East. This year, he has delivered keynote speeches at leadership events in Latin America, Europe, and the US. You can find him on LinkedIn and check out his email newsletter, hi,tech.

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