Publishers are hunting for consumer revenue in classes
Traditional school is out for the summer, but publishers who remain enamored by online education and classes as a source of incremental revenue are just warming up.
Late last month, Billboard announced that it had launched a digital learning program in partnership with Yellowbrick and NYU’s Clive Davis Institute of Recorded Music, featuring contributions from the magazine’s senior director of music, its svp of charts and data development and its executive director of artist relations; at the end of June, Mindbodygreen, which offers close to 90 courses in topics from meditation to feng shui, will launch a more affordable, consumer-facing version of a high-priced online training program once reserved solely for a narrow, wellness-obsessed slice of its audience. The original training program, comprised of more than 25 hours’ worth of videos, costs $1,000, while the consumer-facing version will cost about a fifth of that, Mindbodygreen cofounder Jason Wachob said.
Wachob expects classes to grow from a seven-figure revenue stream into an eight-figure revenue stream, though digital advertising remains Mindbodygreen’s dominant source of revenue, he said.
Later this summer, Inc plans to relaunch Inc.edu, an e-learning program originally launched in 2015 that has been on pause for the past two years. The rebooted version of the program, which will be co-branded with Inc’s sister title Fast Company, will feature input from both titles.
Publishers have been drawn to education and classes for years because, theoretically, they tick many boxes at once: A great educational course can build a publisher’s brand, leverage the credibility and expertise of its editorial staff and develop a new stream of valuable customers.
But the track record of publishers pursuing education is mixed. Publishers have had trouble integrating online classes into their core businesses, marketing them in a cost-effective way, and figuring out how to drive repeat business.
Those challenges can lead to abrupt changes in course. At the beginning of 2018, Investopedia’s then-CEO David Siegel declared that he was “all in” on the Investopedia Academy, a suite of online classes aimed at the finance-curious, with plans to grow the team working on Investopedia Academy to 50 people, up from 30.
Today, the team that ran the Academy is gone and has not been replaced. A Dotdash representative said that the Academy was no longer a focus, though it planned to continue to refresh the courses currently on offer.
Dotdash’s spokesperson cited worries about customer acquisition costs, as well as greater interest in growing advertising and commerce on Investopedia, as the main reasons for abandoning the Academy; a source that worked on Investopedia Academy at Dotdash said that Investopedia had had trouble acquiring customers profitably through Facebook — one of its main channels.
Similarly, Brit + Co., which thought online classes about subjects ranging from calligraphy to cake decoration could help grow consumer revenue into half of Brit + Co’s business by 2020, has not published a new video course this year, after publishing dozens of them in 2017 and more than one per month in 2018.
Brit + Co is still bullish on education as a revenue stream – the publisher has sold “about 200,000” of its classes online, president Jill Braff said – but Brit + Co is currently rethinking the way that it markets and develops the courses. Over the past several months, the site has been conducting focus groups, as well as numerous tests around pricing and email promotions. The goal is to put the courses more front and center, Braff said. The executive said she was unsure whether Brit + Co. would see consumer revenue deliver half of overall revenues by 2020 — something which Brit + Co has said in the past.
“Since I’ve been at the company, classes have been its own leg of the stool,” Braff said. “We’re actually working to integrate it more into the consumer experience.”
“So much of our content is how-to and resourceful, so it makes sense for us to integrate those rather than keep them quite separate,” Braff added.
Unlike brand licensing or affiliate commerce, which can deliver incremental revenue quickly, education can be hard for a publisher to commit to because it tends to be resource-intensive. For example, Complex staffers spent nearly five months helping develop the curriculum for a course it created in partnership with FIT and Yellowbrick, said Jeanette MacKenzie, vp of business development and commerce for Complex Networks, with more than a dozen people supporting it at various junctures.
Since launching three years ago, Complex’s course has amassed thousands of enrollees, exceeding the publisher’s expectations, MacKenzie said, though she declined to share specifics about how much revenue Complex has made from the classes.
Because online classes are far removed from the core business of digital media, there are no easy answers about how tightly, or loosely, courses should be integrated into other publisher products. Keeping them too siloed has costs, but going too far in the other direction can limit growth.
For example, Inc.edu originally relied on bold-face names that Inc. worked with on its conferences and events, and as such they were tied closely to Inc.’s live events operations, said Patrick Hainault, vp of corporate business development at Mansueto Ventures, which owns both Inc. and Fast Company. But that made it hard to drive customers year-round.
“The original plans we had were never going to scale,” Hainault said.
Moving forward, Hainault said he thinks the rebooted classes product, which will be available on-demand rather than tied to in-person events, and more academically rigorous, should have a better chance to grow by selling to a wider base of consumers.
Hainault added that he thinks improved digital marketing efforts will help the education products grow. “What’s evolved a little is how we track and target,” Hainault said.
Ultimately, the success or failure of publishers’ education efforts may rest on their marketing chops. Through most of its history, Mindbodygreen has done 90% of the marketing for its classes business on its owned and operated properties, such as its newsletters, editorial content and its social platforms. The company plans to hire two marketers later this year to help Mindbodygreen acquire customers, mostly through Instagram and Facebook, using tactics and insights gathered from marketing to customers on its own channels.
“I believe you focus on your own ecosystem, you get it right, and then you move off your own platform,” Wachob said.
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