I watched Roger Ebert's interview on Oprah the other day where he revealed his new computerized voice put together by processing audio commentaries he did for DVDs. I went to his blog to see if he had anything to add, like he did for the Esquire article. Instead of a reaction entry, I got an entry inviting me to join The Ebert Club, which cost $4.99 for the year for some value-added services. It's all to cover costs for operating his site. $4.99 for the YEAR is a bargain when most subscription services charge that and more MONTHLY. Between paying utilities and a website subscription, I choose utilities. The Ebert Club, in contrast, is the price of a large cup of cappuccino for an annual subscription. If you break it down, it's only 42 cents a month.

THE EBERT CLUB

It'll be interesting to see how this does. Even with Ebert's traffic, his site's not making enough to sustain itself relying on just banner ads. I'm testing out banner ads on Wopular, and the CPM's are indeed pretty low right now ( I'll do a write up comparing the performance of various ad networks soon). This is eerily similar to the internet crash of 2001, when advertising rates dropped to the floor and left internet companies scrambling for other revenue streams. Subscription was one of the alternatives back then, and it looks like it's making a comeback now. For content sites who tried subscription, I think it ended up accounting for 10-20% of their total revenue. It's not bad, but it won't save any company. I tend to think that's about right. At IGN, monthly subscriptions made up about 15% of their monthly revenue. It's because only the hardcore users would subscribe. Roger Ebert could expect a similiar turn-out. The only difference is he's charging so little for membership, so I wonder if that would get him more sign-ups.

So far, so good - on his twitter page, he said membership is "growing nicely." It's great to see a writer from old media of Ebert's caliber testing things out on the internet. Unlike a lot of print critics, he has embraced the internet from the get-go. I've never heard or read from him anything negative about the internet as it relates to his profession. Because of that, even though he considers himself a noob, he goes about his internet business intelligently. He entered the crowded field of blogging only recently, and it's already considered one of the internet's best blogs. I hope The Ebert Club will be just as successful. As for the value-added features, I'm most looking forward to his special twitter pages and web discoveries.

WHY STUDIOS AREN'T ADVERTISING OSCAR FILMS ON EBERT'S SITE

Ebert mentioned on his blog that studios aren't advertising their oscar films like The Hurt Locker on his site, but instead are just giving him the usual big-budget Hollywood movie. It's the same with Rotten Tomatoes. You'd think these two sites would be two of the best places for that kind of promotion. I think the problem is these sites are too huge for that kind of targeted advertising. For the Oscar films, they only want to get the attention from people in the industry. The want Variety, Hollywood Reporter, or David Poland's Movie City News where they know that their core audience is industry guys. Roger Ebert and Rotten Tomatoes are too mainstream. Their core audience is movie fans; actors, directors, and other people working in Hollywood only make up a small percentage of their total users.

BANNER ADS AND AFFILIATE PROGRAMS

At Rotten Tomatoes, we never tried subscription. I don't remember why. Maybe it's because we heard from friends who operated other content sites that, at best, it'll only get us 10% of the revenue pie.

We relied mostly on banner ads. When the market recovered, advertising rates for banner ads went up, and so did our overall revenue. We face the same problems as other film critics. Studios are reluctant to advertise one of their films with us when the Tomatometer for it is low. Still, we get enough "studio buys" to support a staff of 10-13 full-timers.

We also did well with affiliate programs. We hooked up our entire database of DVD's - all 200,000 or whatever it's at right now - with Pricegrabber and got a decent commission from each purchase. We did the same with AllPosters for movie posters, which did ok. Together, those two affiliate programs accounted for 25-30% of our monthly revenue - a lot better than the average subscription. In the later years, we tried selling movie tickets online with MovieTickets.com, but the margins were so low, we didn't make any money. We probably, at best, broke even by selling sponsorships on the ticketing service. It's a nice service to have, so we kept it on the site, even though it's probably a money-losing service.

NEWSLETTERS

So are subscriptions and affiliate programs the only alternatives to selling banner ads? Rotten Tomatoes has a newsletter with over 100,000 members. Guess how much we made from it. Zero. We've never really figured out how to monetize our newsletter subscription. Lately, I've been following several MMO (Make Money Online) sites, and those guys do amazingly well with their newsletters. John Chow makes upwards of $40,000 a month from his newsletter of 25,000 members. You can make a decent living with significantly less traffic doing an MMO site. It's a really interesting model. I'll save that for another blog entry.