Salon tacks back to subscriptions in an effort to revive revenue
More than a decade ago, Salon bet that readers would be willing to pay for an ad-free, subscription version of its site. Today, with its chip stack diminished, Salon is making a similar wager.
The San Francisco-founded publisher recently launched a feature that allows visitors to try out an ad-free version of the site for small windows of time — just an hour for 50 cents. More committed readers can also pay higher amounts for longer periods of time, up to $99 for a full year of ad-free reading.
The ad-free offering is a small test designed to serve a known reader demand, according to Salon Media Group CEO Jordan Hoffner. But starting next year, Salon will begin putting content behind a paywall, too, a further step toward diversifying away from the programmatic ad revenue that drives most of its business. It will also continue investing in new content categories such as food and health, a strategy it launched this spring.
These shifts come at a precarious time for the company. Monthly unique users are down 78 percent from where they were two years ago. Traffic has hovered closer to 2 million monthly uniques for much of 2018, down sharply from the 9 million it averaged toward the end of 2016, according to Comscore. The company’s chief financial officer resigned in October, and the company has not filed its required quarterly earnings with the SEC since the spring. The last time Salon Media Group released financial information, the company said it posted a net loss of $696,000 on revenue of $1.25 million in the final three months of 2017. This summer, Salon informed regulators that it would be unable to file its second-quarter earnings report in a timely manner.
Hoffner declined to comment on Salon’s financials.
Hoffner said the ad-free test has gotten “hundreds” of takers so far, adding that he thinks the number will grow as consumer preferences evolve.
“I believe you’re going to see a shift in consumer demand around tracking-free [sites],” Hoffner said. “I just think that with everything that’s gone on in the industry over the last two years, I believe people are tired of being followed.”
Salon was years ahead of the digital media world’s current fascination with reader revenue. It erected its first paywall in 2001, and experimented with several paywall designs before ultimately abandoning the paywall in late 2009 and ditching subscriptions altogether in 2014. At its height, it had attracted over 89,000 subscribers, each paying around $30 per year.
The question for Salon is whether enough people still think the brand is worth paying for. Its website traffic has slipped badly. Its recent nadir came in April 2018, when it drew 1.03 million unique users, according to Comscore data.
There’s a silver lining in that the site’s current referrals paint the picture of a site that still has a loyal audience. Around 39 percent of the site’s desktop traffic is direct, according to SimilarWeb data. Another big chunk, 37 percent, comes from search, followed by 17 percent from social channels, with Reddit delivering the largest share.
That loyalty is a key ingredient in a subscription strategy. But Salon, like other publishers, will face an uphill battle proving that its content is worth paying for.
The publisher has been actively searching for new sources of revenue. Last year, it launched an ad-free version of its mobile app which costs $4.99 per month. In February, it tested out a scheme that gave ad-blocking visitors the choice of white-listing Salon or allowing the site to harness visitors’ computer processors to mine cryptocurrency. It abandoned the cryptocurrency offer after a brief test.
“If you can’t prove to me that your content isn’t better than anything I can get [for free] on YouTube or through a Google search, you should probably find a new business,” said Rob Ristagno, the CEO of the membership consultancy Sterling Woods Group.
Salon also has a slimmer staff these days. Last year, it had a headcount of 41, down from 50 in 2016, but the site’s first-ever union contract, signed in October three years after its union was first recognized, covered 12 newsroom employees. The site’s masthead currently lists 12 non-executive employees.
To make up for a smaller reporting team, Salon has leaned into curation. Back in May, the site launched several new verticals, including food and health. While it has staffers producing work on those topics, a major share of that content comes from third parties, ranging from Penske Media-owned titles Rolling Stone and IndieWire to Food52. It is managing “dozens” of these editorial partnerships, according to the LinkedIn profile of Salon managing editor Joseph Neese.
Salon is often not paying to republish the content, in some cases because it is not required to. The Conversation, for example, which provides around half a dozen stories per week to Salon, according to Conversation co-CEO Bruce Wilson, operates under a Creative Commons license. In other cases, the republishing is done for exposure. For Salon, it’s a cheaper way to get content without requiring a ton of resources.
Hoffner, meanwhile, said he sees the ad-free trial product as one of several designed to serve the varied needs of Salon’s audience.
“It could be a new option everybody follows,” said Robbie Kellman Baxter, the CEO of the consultancy Peninsula Strategies.”But there’s going be a little bit of an awareness curve.”
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