Can You Make (a LOT) of Money with Premium Content?

I’m hereby naming 2016 the year of premium content. Yes, I’m aware that The New York Times is moving away from the premium content model, as are several other traditional general media outlets. But I’m actually seeing things move in the other direction. I think premium (paid) content is making a huge comeback, and will be part of the Web for many years to come.

• SEOmoz appears to be making more money with their new paid subscription model then they ever did otherwise (based on their “financial transparency” posts in the past).
• Aaron Wall, ever the forward-thinking-highly-strategic-web-trending thinker, is planning on moving to the premium subscription model for several stated reasons.
• While ESPN still barely even offers free content covering the UFC, Sherdog’s paid membership program is ticking along.
• I just renewed my premium Scout.com subscription. I just haveto have every single piece of info about the Cleveland Browns as soon as it comes out. We just signed a new #3 punter to the practice squad? Yes, I need to know that. OK, this bullet point was completely subjective. But it passes my gut check–if I have ever paid for premium content, and there are other people in the world like me, then…

Of course, the paid content model isn’t right for everyone, and for every success story above there’s another story about a site cancelling their premium content section. But when paid content works it reallyworks. Here’s a handy, no-BS quiz to help you find out if the paid content model could possibly work for you:

1. Have you built a free readership of at least 10,000 subscribers or daily readers? My napkin calculation says that you can reasonably expect (best case) 1% of readers to pay for a premium membership. Unless you can successfully charge a thousand bucks a month for membership, I’d guess you need a base of at least 100 members to break even on content production costs. 
2. Are you a recognized authority in your field? This is a huge selling point in being able to convince people they should actually pay for your information when other less formal or less expert informational channels are free. e.g., Scout.com isn’t just a bunch of bloggers–they have real reporters and NFL insiders whose journalistic integrity I actually trust.
3. Do you have serve a regular dosage of exclusive content?This could be videos, in-depth guides, research, tools, or whatever, but if you don’t have exclusives, why wouldn’t a reader go to your free competitor? e.g, Scout.com gets plenty of (usually true) rumor stories not carried by ESPN, and also has an exclusive “Ask the Insiders” forum, etc.
4. Is your content niche enough? If you’re reporting on world news, you are competing with approximately 1000000 other free sites. If you’re reporting on the Cleveland Browns, you’re competing with approximately five other sites. If you’re SEOmoz, you’re competing with approximately 5 or 10 really good, regularly updated SEO information channels (along with about a thousand crappy or quasi-crappy blogs like this one). The point is, if you’re not niche enough, you’re going run into some heavy problems–a large number of free competitors, a larger hurdle to brand yourself as an “expert”, a harder time getting true exclusives, etc.
5. I’m sure I’m missing other bullet points that ought to be here. Comment and let me know 

Now, all this being said, I can’t say I’m currently experimenting with the premium content / subscription model–I’m too busy with my big project right now. But damn, I wish I was. Godspeed, SEOmoz. You hippies in Seattle may get the last laugh after all.