Why media companies think that bundled subscriptions have difficult logistics

…and why you should consider that already solved.

Matthias Bohlen
8 minutes reading time

Simon Owens writes a fantastic weekly newsletter about new developments in the media industry, including a Q&A section.

This week, he answered an interesting question by Taegan Goddard, founder and publisher of Political Wire.

Taegan asked:

Do you know any instances of publications owned by different companies offering a bundled subscription? How do the mechanics and economics work — especially if the publications are on different subscription management platforms?

Simon answered:

I can certainly think of a few examples where media companies teamed up to offer bundled subscriptions. For instance, Bloomberg and The Information offered one back in 2020, though I think it’s since been discontinued. There was also the Everything Bundle, a Substack experiment where several writers teamed up to distribute their paid newsletters through a shared account.

But you’re right, Taegan, these kinds of partnerships are rare, even though the benefits seem obvious. Not only can two publishers share the marketing burden, but a discounted bundle would presumably produce more value for a subscriber.

So why don’t we see more bundled subscriptions? It really all comes down to logistics. Let’s run through some of the challenges you’d need to overcome:

  • As you hinted at in your question, you would need to get the subscription management platforms to play well together, which can be a huge hurdle in and of itself.

  • You’d need to find a publisher who’s of equal size and influence to you. Otherwise, you’d end up driving 80% of subscriptions while only taking home 50% of the revenue.

  • There’d be little recourse if the partner didn’t hold up their end of the bargain. Let’s say you team up with another newsletter and then the writer starts to publish only sporadically. Are they continuing to earn their 50%, or whatever fixed rate you agreed upon?

  • Even if you decide to end the bundle, then you’re stuck servicing those legacy subscribers in perpetuity. At the very least, you would have to transfer them back over to your subscription management program and comp them for a year’s subscription to make up for the fact that they’re no longer benefiting from the bundle.

These hurdles aren’t insurmountable, but they’re large enough to deter many publishers from even bothering with a subscription partnership.

I found this analysis totally amazing because Simon listed exactly the same problems that I set out to solve when I created News Bundler in early 2022.

Let’s discuss them one by one, to see why you can consider them solved now:

Solved: Subscription management platforms don’t need to play well together

Let’s say, publication A is on Substack, publication B is powered by ConvertKit. Now imagine a subscriber who wants to read a bundle of A and B. Somehow A and B would have to make sure that they get a share of the money that comes from the subscriber. However, the subscriber doesn’t want to worry about this: they only want to pay once every month, for the bundled subscription.

So what would publishers A and B do to make Substack and ConvertKit play together?

Well, with News Bundler, they simply don’t need to!

When a subscriber buys a bundle on News Bundler, they pay only once a month. News Bundler knows that publishers A and B work for this bundle. It forwards the incoming money to A’s and B’s Stripe accounts, automatically. No need to make Substack and ConvertKit know about each other.

What applies to money, applies to the email systems, too: News Bundler acts as yet another subscriber to both publications, and it simply forwards the emails to all subscribers of the bundle.

Solved: Publishers don’t need to be of equal size and influence

Let’s say, publishers A and B have significantly different number of subscribers and/or their subscription prices differ significantly.

Example:

  • Publisher A has 1,000 subscribers who pay $10 per month.
  • Publisher B has 10,000 subscribers who pay $20 per month.

How big should each of their shares of the revenue be? And what if the number of subscribers fluctuates over time, should the share of revenue change?

News Bundler solves this problem for publishers. It automatically calculates the percentage that each publisher gets, and it adjusts it when old subscribers churn and new subscribers show up, too.

Using the numbers from the example above:

Publishers A and B could sell a $24 bundle to 11,000 subscribers, producing a gross revenue of $264,000/month (assuming that all subscribers get a 20% discount for the bundle). News Bundler will take an 8% service fee, i.e. $26,400.

Finally, publisher A gets $11,314, and publisher B gets a whopping $226,286. So, even in this case when A and B are unequal, they make 13% more money than before.

But Simon was right with his intuition: When A and B are equally sized, they can make up to 40% more money, instead of merely 13% more!

Use the automatic revenue calculator form, right at the top of newsbundler.com’s home page, to play with arbitrary publication size and price!

But what about the bundle when one publication stops to keep its promise?

Simon really makes an important point here.

In the beginning, when everyone keeps writing good content, publishers and subscribers are both happy: Publishers increase their income, subscribers get more value for less money. Perfect world, isn’t it?

Simon asks:

Let’s say you team up with another newsletter and then the writer starts to publish only sporadically. Are they continuing to earn their 50%, or whatever fixed rate you agreed upon?

Let’s play this gedankenexperiment (a term popularized by Albert Einstein, who applied it to his work conceptualizing the theory of relativity):

Publisher A writes as usual. Publisher B writes only once a month, although they promised to write weekly. A few things would probably happen:

  • The superfans of publisher B would start to cancel the bundle.
  • News Bundler would stop charging them.
  • The superfans of publisher A would stay but they would start to feel that they pay too much.
  • News Bundler would increase the revenue share of publisher A.
  • News Bundler would send a warning email to publisher B, reminding them that they begin to lose the game.
  • If publisher B resumes writing weekly, the bundle is saved. B can invite new subscribers and thus earn back their share of revenue. Difficult, but doable.
  • Now comes the worst case: If publisher B continues to write sporadically, News Bundler will encourage B to leave the bundle. It will mark the bundle as “single newsletter only” and reduce its price to the original price of publication A.
  • Via Stripe, News Bundler will then refund the prorated difference between the full and the reduced bundle price to the subscribers. They will be sad but not angry.
  • In that case, A will be able to sell at least as much as before: The bundle’s subscriber list consists of A’s superfans and maybe some of A’s casual fans that came via earlier invitations from B.

Most of these steps will happen without any need of manual intervention. The ending of the story is happier than Simon anticipated:

  • The bundle is not really “ended” but is merely reduced to one newsletter
  • You’re not stuck servicing those legacy subscribers in perpetuity
  • No need to transfer subscribers back over to your subscription management program.

Summary: Bundling is now easier than ever

As Simon Owens wrote in the subtitle of his newsletter article: “It really all comes down to logistics.” Exactly.

Consider the logistics solved. News Bundler was designed to completely automate the process. It acts like a subscriber to multiple publications and forwards the newsletter issues to all subscribers of the bundle. It collects and forwards money, both via Stripe.

News Bundler runs on the powerful Amazon AWS cloud. Their email servers have the power to deliver to millions of subscribers. Performance and security, by design.

And: News Bundler doesn’t care about how many writers write for a bundle. It’s the ideal infrastructure for small writer collectives, starting with 2 writers, but scaling up to many writers – just like the famous writer collectives like Every, Brickhouse, and Defector Media did on their own. The difference to them: When you use News Bundler, there is no need to form a company. You can do so, but you can also remain an independent author if you want!

Want to start your own writer collective, small or big? Sign up for News Bundler, your account is free.

Want to learn more?

Take the free email course called 2 writers make money. Within 7 days, it walks you through the process, step by step. Set it up once and go back to writing.

Sign up here to learn how to start bundling.

Bundling nerd’s lingo explained

By the way, in case you ask yourself what the difference is between a superfan and a casual fan:

  • A superfan shows up because their favourite author A writes for the bundle. If A quits, they will cancel the bundle.
  • A casual fan of an author A likes what author A writes but their real interest lies with author B. So if A quits, they will stick because of B.
  • Both superfans and casual fans pay for the bundle because they value it higher than any single publication contained in the bundle.
  • Shishir Mehrothra wrote about all this in 2015, in his seminal article Four Myths of Bundling. Dive in if you want to nerd out about bundling (as I like to do).

Cheers,
Matthias

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