People are willing to pay for online content. In fact, the "Online Publishers Association" revealed that pay-for content is emerging as a hot revenue model. Business content, personals/match making, and entertainment are the hottest niches. But even smaller niches, like DVD authoring, sports coaching, marketing services, and dieting are producing profits.

U.S. consumer spending for online content in the first 4 months of 2002 was $300 million, a growth of 155% over the first quarter of 2001 (and that’s post-September 11^th). It’s apparent that online users will pay for content on their passion or profession.

Subscribers are paying anywhere from $9.95 a month to $19.95, and in some cases up to $200 a month – depending on the nature of the content. Annual subscription renewals hold a solid 72%, giving site owners an impressive recurring residual income. Renewals accounted for nearly half of paid content sales in 2001.

Less than 9% of online users currently pay for online content. This means the market is wide open for the savvy entrepreneur. Paying for content in 2002 was more than 5 times what it was in 2001. That’s a massive 500% growth! Those who capture the market first in their niche will have the obvious advantage. It’s an international market, so anyone can play.

There are 4 key elements to starting a subscription based membership site, says Ansel Gough, Editor of MembershipSiteAdvisor.com – an Australian based membership site, teaching others how to start and run membership sites.

1. Target the right market: Find a market that is passionate about a subject, and then build your membership site around it. There are so many topics to choose from. Doing a key word search will reveal what people are searching for online. You can know before you even launch a membership site if there’s a big enough market.
2. Make it unique: Ideally potential subscribers shouldn’t be able to find the same information elsewhere for free online. Your job is to search online (and in some case offline) for content, and provide it in a convenient manner for your subscribers. Being unique could just mean having exclusive interviews with experts in your field. If you’ve done the interview, then that’s unique. Finding experts (and even famous people) to interview is not hard. In fact, as your site grows in popularity they are likely to contact you. This situation gives you a two-fold advantage. It gives you credibility or an endorsement, and it gives you exclusive content. Of course your exclusive content may be from your own specialized knowledge!
3. Finding Subscribers: If you’ve started off targeting the right market, then finding traffic and subscribers aren’t as difficult as some people believe. The best methods for generating quality traffic to your website include: Search engine positioning (including pay-per-click), Internet Joint Venture Marketing, Ezines (online newsletters), affiliate programs, and viral marketing (accelerated word of mouth marketing).
4. Add tools or services: To enhance your membership site try including simple software, tools, ebooks, resources, etc. as a give-away. These can usually be found for free or at a very low cost online.

"Marrying services, resources or tools with content can dramatically boost your subscription rates," Gough says. "However it’s best to include something that doesn’t take up your time. Giving people a reason to return to your members only area is critical – tools, resources, discussion forums and quality content will do that!

"The exciting thing is, you can take your hobby, specialized knowledge or profession and turn it into a profitable membership site. Your challenge will be finding exclusive content. You can start it part time – something I did myself, while working a full time job. As your subscriptions increase you can plan on full time involvement in your area of interest."

Starting and running a membership site can be a lot of fun and very fulfilling, however you need to know what’s involved in setting one up, and then managing it effectively. Planning and allowing for auto-responders, automated sign-ups, credit card processing, automated cancellations, etc is all part of a successful membership website.

As complex as this seems, many companies offer a low cost, easy-to-use software solution. A few companies, like MembershipSiteAdvisor.com offer a free software membership management tool to subscribers, allowing them to manage all of these routine tasks. This makes it possible for almost anyone to start and market a membership site for next to nothing.

Gough is quick to challenge that "Paying for online content is inevitable. You can either be the one paying for it, or the one profiting from it. Ideally you’ll do both, and learn a great deal in the process."