Blogonomics: The Subscription Model

Since September, Jack Ciesielski's Accounting Observer blog has been hidden behind a subscription firewall. That's not a great way to get inbound links or traffic, obviously. But does it make sense for other reasons? I asked Jack why he's hiding his blog from public consumption - and why he's barely ever publishing anything on Seeking Alpha, either.

Jack was very clear on the economics:

I wouldn't recommend it to bloggers. Stick with advertising.

So why does he do it? Basically, the subscription product predates the blog, and is Jack's main source of income. He considers his subscribers to be his employers, and said that he never really felt like he was working for his employers when he was giving his stuff away online.

I really enjoyed doing a lot of the blogging. But advertising wasn't going to be serious enough money to warrant allowing it on the site, and I felt like I should be devoting more of my time to Observer readers.

Jack also felt that by placing the blog behind a subscription firewall, he could put stuff there that he'd never feel comfortable giving away for free:

Firewalling the blog allowed me to do extensions of the pieces I write in the Observer - stuff that's data/staff intensive, that I would never want to simply "give" away.

In other words, by firewalling the blog, Jack felt he had managed to professionalize it, to make it an integral part of his day job, rather than it being a none-too-effective marketing tool.

The blog attracted many readers - but near as I could tell, they were individuals, CFOs, controllers, and a few investment players starting out who wanted something for nothing. In short, nobody who was interested in subscribing to the research service. From the stats I was able to gather and the kind of feedback I received, I never got any kind of traction with the folks I wanted to work with: analysts in research departments.

I do wonder what would happen if Jack made his blog public again. There's certainly stuff there of general interest, such as an elegant take-down of Andrew Ross Sorkin's article on FAS 157 yesterday:

For the record: Statement 157 didn't extend fair value reporting to new classes of assets. Statement 157 greatly expands the disclosures related to fair value reporting, requiring more rigor in applying fair value reporting where it had always been done in the past. Remind yourself: what was the rule before Statement 157 - all historical cost, forever? No. If an asset wasn't worth its cost, it still needed to be written down to what it was worth, period.

Obviously Jack's subscribers would still have access to just as much analysis as they do now. But maybe they would feel as though they're not really getting their money's worth, any more, if a large part of what they used to be paying for was now being given away for free. And maybe analysis is like wine: people value it more if they're paying for it.

So if you already have a subscription product, then there can be colorable reasons to make your blog a subscription product too. But for the rest of us, I can't believe it would ever make sense.