Business With Content: The Costs of Running a Premium Content Site

This is the ninth article of the series “Business with content“. To read the previous one, click here.

You saw me talking about investments several times so far – this thing is large investment, that one is not so large, and so on. But what are all the costs of running a premium content site? Here. Let’s have a look:

Content creation

Creating the content is the most important and unavoidable cost in such business. Some sites may do fine without advertising  or any paid SEO service (or any SEO work at all), but no premium content site can happen without content.

Expense Sheet

And in many cases this will be the largest investment you’ll make. If you are creating the content yourself you should factor your time. If you hire someone to create it, directly count the dollars.

It’s impossible to give estimate without knowing your exact business model. But we can do a couple of very rough calculations just as example:

  • A subscription based membership site with a hundred high quality articles, 10 videos, and a couple of member only tools. Project about $5,000 for the articles (we are talking about quality stuff here), $2,000 for the videos and $1,000 – $2,000 for the tool, assuming it’s a simple one.
  • A set of 3 e-courses, about 20 lessons each, with assignments, exams and certificates. Provided you have someone with expertise this is going to be about $3,000  – $4,000 for writing the lessons, $2,000 or so for creating quizzes, assignments and certificates.
  • A site selling 3 approx. 200 pages long e-books and a master set of several videos and audios. You need roughly $500 for the creation of each e-book and $5,000 – $10,000 for the videos.

These are of course very rough estimates and are all made out of the blue. They should be sufficient to give you the idea that starting a small premium content site requires $5,000 – $15,000 for the content creation. This is not huge amount for starting a business, but is not like it’s free of expenses either. If you are planning to start a large info site with several thousand articles, multiple the costs accordingly.

Also note, I consider $50 per quality article is OK. Some would say that you can’t buy an expert for this amount and you may need to pay $100 or $200 per article. On the other hand, if you have the expertise and need just the writing, $20 per article will get you a decent enough writer.

Video creation and tools are different matter as a video can be done nearly free if you just speak in front of some charts, or can cost many thousands if it involves actors or effects. Tools / software are even more diverse.

Users acquisition / SEO / Advertising

Sometimes this is the second, sometimes it’s the first cost. Acquiring users can range from free to many thousands of dollars. It all depends on what numbers make sense for you and what is the value of each customer who joins your site.

There is no way to give estimates here as variables are too many. In some niches the cost per click can be pennies and placing a banner can be $50 per month. In other niches a single click in the search engine results may go to $20, $30, or even $100.

So you have to calculate this yourself based on your business model and niche. There are few things to consider:

  • Are you going to rely on search engine traffic? If yes, how are you going to get it? The best strategy might be building a partly public membership site so at least some of your content is exposed to search engines. Just don’t forget that having content alone does not always mean you’ll get traffic. You may (will) still need inbound links.
  • If you are paying for ads you absolutely must know your customer lifetime value. When starting, you may need to assume. For example if you are selling a single course at $199, this will be your customer value because there are no upsells. So you need to figure out how much you can spend per acquired customer. Anything up to $100 is probably OK. So if you are using Adwords and paying $2 per click, you must have at least 2% conversionя on your sales page to make things work.
  • If you rely on freebies to draw you customers you still must promote the freebies. Usually it’s easy to get users download a free report in exchange for email address and offers like this will convert at 20% or 30%. But you still have to pay for these visitors. And if then only 5% of the download convert to paid signup (customer), we are talking overall conversion rate of 1% – 1.5%. So this approach may be worse than paying to deliver the visitors directly to your sales page.

We are going to talk a lot more about acquiring users in the next article. Just make sure whatever method you decide to use you make some rough estimates at least.

The Software

The things are very diverse here as well. You can very well spend $0 on software. Just install Joomla or WordPress and get some plugins. There are plenty of membership site plugins and many of them are free (for example our Konnichiwa! or Paid Membership PRO)

The paid ones aren’t that expensive either. One of the most popular ones – s2Member is just $89.

Even if you plan to run an e-learning site you can start with $0 by using Moodle our free WordPress LMS like our Namaste! LMS and a free quiz plugin like our Watu or Slick Quiz. (This article is not meant to be a review of software solutions – I am merely giving examples).

The paid LMS plugins are also affordable especially in their WordPress versions. Just $87 for our Namaste! LMS plugin suite (which works on top of the free version) or $129 for Sensei.

So you can start with less than $1,000 for the technical side of things. Probably consider $500 – $800 or so for some decent site design (more if your site is going to be complicated and less if you’ll just buy a ready WP / Joomla! / Drupal theme).

If paid newsletter is your business model, mailing list / newsletter / autoresponder plugins or scripts are usually less than $100. Or you can go by subscription service like MailChimp. That’s going to be expensive once you go beyond 2,000 subscribers though.

If for some reason you need your site custom built you may need few thousands on this front too.

And that’s that. The technology is important but it’s not your biggest worry when starting such business. Figuring out the good content and acquiring users are.

Hosting & server fees

Hosting is no longer the big expense it used to be. In fact it can be pretty small one – often a shared host for $5 per month is good enough to handle a membership site with few hundred customers. And 500 x $39 per month for example makes almost $20,000 in income. You see, it’s not a big expense compared to the potential income.

If your site is heavy on DB queries like some complex LMS-es are, or you have built many tools, or you are hosting a lot of audio and video files you may need a VPS or dedicated server. Assume $50 – $100 or $200 monthly for this.

Another option is to go with good load-balanced cloud hosting service – they are too many to count so I can’t recommend a specific one. The cost can come about the same or less than bare metal servers for small sites. For larger sites it might be more cost efficient to get a bare metal dedicated server and hire a server administrator.

If you choose to build your site on WordPress you can choose to use some of the managed WP hosting providers. A good review of some is available here. As you see you’ll spend only $10 – $30 monthly on it.

In overall, hosting is not the thing to worry about. Think about your expenses for content creation and user acquisition most.

Speaking about attracting users, this is the next article in the series.

Business With Content: The Need of Expertise

This is the eight article of the series “Business with content“. To read the previous one, click here.

As discussed yet in the article about membership subscription sites you can’t make business with mediocre content. This was possible 5-10 years ago but that’s no more. Sure, you can get a few subscribers even of a site with cheap rehashed content but most of them will quickly unsubscribe, some will ask for refund, and none of them will recommend your site to others. The web is now full of all kind of content and a lot of it is free and high quality.

Expert Whiteout

So, what you need in order to be able to charge for your content:

  • It must be unique or at least hard to find elsewhere.
  • It must be expert content. If you are building a site giving career advice you can’t go with the stuff that you can find on every blog online. You need real expert advice and insights that work.
  • It must be rich. This means ideally not just text but also media like audios and videos, charts, info-graphics, tools.

For these purposes web scraping, rewriting existing articles, copying content from a book or (why am I even saying it) auto-generating content is out of the game. None of this will work. You need to invest human hours into creating very high quality content before you can even think about making business with it.

So, how? The options are mainly two:

Option One: Create Your Content Yourself

This is the most obvious one and it is the best. I know this does not sound like what a business owner does but with paid content sites it is the most viable path. You, or at least someone within your company (maybe several persons) should be knowledgeable in the subject you plan to build business around. The best content is created in-house and you as an owner of the site should be very well into the matters you charge for.

So how do you go about this if just starting? Focus on expertise you already have. Maybe it’s your job, maybe it’s a hobby or interest. But it should be something that you really know well, have experience with, or have inside information that can be shared. Gaining expertise along the way will not work: the quality of content required nowadays is too high for this. You can’t pretend to have expertise.

Now, if you are not good in writing for example, you can hire someone to rewrite or edit your articles. You definitely need to hire someone to create videos or audios unless you are expert in that. Don’t do cheap home made webcam videos unless you know what you are doing.

You will probably hire a website designer and someone to create charts, tools etc. This is OK. But the expertise must be coming from you, from your knowledge and experience. Not from stuff you just read online last few months.

Option Two: Get The Expertise From Someone Else

The second option to use someone else’s expertise. You can join forces with an expert in a given area and handle the marketing, sales and / or technical side of running a site. You can even take interviews and write the articles yourself. You can do this with multiple persons. Or you can just hire an expert to create the whole thing for you: videos, audios, texts, tools, etc. Either of these options are fine as long as you really have an expert.

And expertise comes from experience… so you get the idea.

What Not To Do

A sure way to fail your paid content site is to do any of the following:

  • Rewrite, copy, or rehash articles from other sites. This was already said but worth to repeat and remember.
  • Create lame content without having real expertise. This is just as bad as the above. It won’t get you anywhere.
  • Try to gain expertise along the way. No, you won’t become an expert in anything just by reading about it. Don’t try to create a premium content site on a subject you know nothing about.
  • Hire freelance writes to research and write articles. No matter cheap or expensive. Writing for a premium content site requires much less expertise in writing than in the subject of the site. So even a great writer won’t get you anywhere if they don’t know the matter. You are far better hiring someone who knows what they are talking about, even if they can’t write well.
  • Auto-generate content of any kind unless we talk about generating charts or reports in some unique useful way or based on private data that you have.

I wish I could tell you it was easy as in “hire writes for $5 per article and get 100 articles done” but it’s not. If you don’t have access to real top-notch expertise do not even try to start business with content of any kind.

So if you are just about to start, knowing where to find the expertise is going to be your main worry. And creating the content is your main expense. But not only. The next article in this series will discuss the costs of running a paid content site. Read it here.

WatuPRO 5.2

WatuPRO version 5.2 is out with a new set of improvements and bug fixes:

  • New option lets you not display questions already answered (or only correctly answered) by the user in previous quiz attempts. More info here:
  • New button “Save & Reuse as New” on Add / Edit Question page lets you reuse the question as a template for the next one. This can save you a lot of time if you are creating similar questions.
  • A simple snapshot on the admin dashboard (the homepage of your blog admin) will show you the number of quizzes taken today, last 7 days, this month and the percentage up / down accordingly to the previous period + some more stats. The snapshot disappears if you switch WatuPRO to low memory mode.
  • The optional progress bar on paginated quizzes can now also show the percentage of completeness
  • The basic bar chart now accepts “overview” argument which allows you to show previous attempts for the same user. See the blog post for more details:
  • Information about the achieved points & grade per question category will now show in the “View results” page. Note that these stats will be recorded from now on, so you won’t see them for quiz takings completed before applying the new version.
  • New option lets you use default points for incorrect / correct answers across the whole system. The setting can be overridden at quiz level. The option does this: when initially loading the form with an answer to a question, the “points” field is prefilled with the default incorrect points. If you click on the “correct” checkbox/radio it auto-fills the default correct number of points, and vice-versus when you uncheck the box. Of course the box content then can be edited and this number can be changed. This can save a lot of time when creating many questions.
  • When the “My Quizzes” page is shown with the watupro-myexams shortcode, the “view details” link goes to regular page instead of popup to keep the layout mobile-friendly
  • Single-choice and multiple-choice questions now can have their answers arranged in 1, 2, 3, or 4 columns. This is suitable when choices are short or contain only images.
  • In the shortcode watupro-myexams you can pass a named argument “reorder_by_latest_taking” to reorder the completed quizzes by latest completed on top. This works together with the sorting argument because the quizzes to complete will remain sorted by it.
  • A bridge between WatuPRO and EDD is available:
  • [Intelligence module] New attributes “rank” and “personality” let you limit the expand-personality-result shortcode to only a given result. This lets you manually craft the output if you wish.
  • [Intelligence module] Added question category in Edit and Manually Grade Test Results page.
  • [Intelligence module] In Manually edit quiz taking -> Configure email section you can use the user info shortcodes with argument user_id=”quiz-taker”
  • [Reporting Module] When the tests page is shown with shortcode, the “view details” link goes to regular page instead of popup to keep the layout mobile-friendly
  • [Reporting module] The Skills chart can now be sorted by proficiency or alphabetic, and be displayed horizontally or vertically
  • [Reporting module]. The shortcode watupror-user-cat-chart now accepts two more options for the “from” parameter: “points” (will show the number of points earned per category), and “percent_max_points” (displays the % points achieved from the maximum points in each category). You can also decide to include survey questions in the chart by passing “include_survey_questions=1”. By default they are not included.
  • [Reporting module] The Tests page is optimized, paginated, and made sure to include even tests composed entirely of survey questions.
  • Integration with Namaste! LMS now allows filtering students by WatuPRO user group
  • Minor improvements to the colors of the buttons in the built-in design themes
  • Fixed bug: when “Save and reuse” was used on Match/Matrix questions the old answers were not saved in the new question.
  • Fixed bug: when contact details were requested at the end of the quiz the page did not automatically scroll up to reveal the contact fields (the problem occurred only on some installations and on long quiz pages)
  • Fixed bug: Survey questions should also return maximum possible points for all the reports that use them
  • Fixed bug: when importing questions with tags extra | were added around tags even if those already existed

As always, the updated version is sent out via newsletter to eligible customers. If you did not receive your newsletter, feel free to contact us.

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