How Thomas Baekdal built Baekdal Plus, a subscription-funded magazine

Welcome to the latest edition of Creator Collab House. I’m your host, Simon Owens. For those who don’t know me, I write a media industry newsletter you should definitely check out.

Today’s featured creator is Thomas Baekdal, the founder of Baekdal Plus, a twice-a-month digital magazine that provides media industry analysis. I’ll start by asking him a few basic questions, but my main goal is for you, the audience, to ask him questions of your own. Thomas is an expert on everything from the media industry to building a digital subscription business.

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Ok, let’s turn it over to Thomas…

What's the origin story of your newsletter?

Baekdal Plus is a project that started a very long time ago. Essentially, the whole thing started back in the late 1990s. Back then, I launched a web magazine for a graphic app, and within just a very short time (the first couple of years), it became one of the most popular sites in the world for that app.

That experience was what started my focus on the media and the power that the internet provides to independent publishers. I realized that just with an internet connection, I could create something that had wider reach than most of the magazines in my own country (Denmark). That was amazing. 

I closed that site in 2000 because, at the time, I was working for a big fashion company. I was in charge of digital media, so even here, I had a strong media focus. In 2002, I tried to start another online magazine, this time with a focus on fashion. I even hired a couple of journalists, but I just didn't know enough to really make that work, and in 2002, most 'ordinary' people weren't really reading articles online yet. So that project failed after just a year. 

But then, in 2004, I decided to start my own more future and media-focused site, under my own name 'Baekdal.com'. In the beginning, it wasn't really that focused, but in between 2004 and 2010, I managed to grow it to more than a million visitors per month. 

However, even with a million visitors, I was making so little money from advertising that it was nowhere near profitable. And so when I quit my job at the fashion company in 2010, I needed a different plan. 

My passion and my focus at that time were solely on 'media analysis.’ We had just had the financial crisis, and the media industry was in shambles. But because I had published digitally since the late-1990s, many of the questions the media was asking was something I already knew the answer to. And so, in December 2010, I turned my free site into Baekdal Plus. This was to be a subscription site, for media analysis and media trends, for people in the media industry.  

However, upon launching this, I had completely misjudged the focus of my original audience. While I did have a million visitors, almost none of them came from the media industry. And so, when I turned it into a subscription site, only 29 people subscribed after three months. 

So I realized that I had to build this up from scratch. And so, I focused even more on media analysis, changed the format to instead be based on 25 high-end and very in-depth media reports per year, each one being about 30-35 pages long … and this was then what I asked people to pay for. 

It took a long time to build this up, but today this is what I do for a living. I provide highly in-depth media analysis, in the form of these reports, but provided to people as long-articles that people can then subscribe to on a monthly basis. 

What have you found to be some of the most effective growth strategies for getting new subscribers?

The most important growth strategy that I know of is to really have something people need, while at the same time hit that magic spot where it kind of takes off on its own (via word of mouth). 

However, I have never been able to achieve this with my site. The problem is my format. My Plus reports are simply too long for that type of growth. So, for Baekdal Plus, my growth over the past ten years has been a very long and tedious slog. My magazine has been growing pretty much every single year, and it is cash flow positive, but I have never seen that gigantic shift in subscription rates. 

This is something I find to be very typical for most independent publishers. Only the celebrities are really able to get that dramatic growth rate all of a sudden. The rest just have to work for it every single day.

There are differences over the year. Every now and then, I do write an article that just gets 10x the amount of focus than anything else. The problem, however, is that those growth moments are usually also very shallow, while the slow growth tends to stay around for much longer. 

So, if you ask me what I would rather have? Slow, sustained growth or fast short-term growth, I will always focus on the slow, sustained growth. Mind you. I would love to double my subscribers ;)

Can you walk us through your workflow each week for creating new content?

So because my main business is about my Plus reports, and that I do 25 of them per year, it means that my workflow is entirely centered around making those. 

Essentially, I have two weeks to finish each one, but depending on the topic, the amount of research and analysis I need to put into each one varies quite a bit. 

My last article about publishers demanding that Facebook pay them for linking only took two days to write. This was because I already knew everything about it. 

Meanwhile, other more strategy-focused articles or articles focusing on defining future business models take a lot longer. I sometimes spend months working on an article before it was finally published (while also working on other reports in between). 

I also do a podcast, but I struggle to keep any form of consistent schedule. The problem is that my podcast, like my articles, is very in-depth. So they too take a week or more just to prepare. 

And then, I do a newsletter. I plan to do a newsletter every Sunday, but, again, my schedule keeps slipping. Instead, my newsletter is mostly linked to when I publish another report. In the newsletter, I will promote the latest report, and then I usually have a shorter newsletter exclusive article, which works quite well. In fact, my newsletter is my main source of subscription growth these days. But remember, the newsletter is free. That's not what people pay for. They pay for the Plus reports. 

Can you walk us through the business model for the newsletter?

Well, the newsletter is not my business model. The business model is the Plus reports. And the business model is that, for $9/month, you get access to everything (all-access model). This is extremely cheap compared to anyone else. For instance, INMA charges $795 for just one report. 

But the problem is that when you are just one person, it's exceptionally hard to convince people to pay a higher price. I have tried raising the price in the past, and it always led to an overall lower revenue total. 

However, what I also do is that I allow sharing, and I have built my entire system around this concept. In the early days, this was a very important element of growth, but, since then, social channels have changed a lot. Today, sharing does almost nothing, and today, direct word of mouth and the newsletter drives all my growth instead. 

But one thing I have learned over the years is that value drives everything. Your model should be laser-focused on driving the maximum amount of value, and you should 'own' that value. Keep in mind that I'm a business-to-business site (my audience is media executives). So this might be different if someone is running a gossip magazine.

Are there any particular milestones or articles written that you're proud of?

The milestone I have been most happy about is when I turned profitable. Right before that, I was actually close to going bankrupt, so turning that corner was like landing on the moon. 

Another milestone was when I started being recognized in the industry. Remember, I came from the fashion industry, so when I started out, nobody in the media industry knew who I was, and I had no contacts anywhere. 

But then, at one point, I started getting contacted by very big publishers to come in and analyze their future strategies. It took a long time to build that up. The first major newspaper that asked me to help them was in 2013, three years after I started. The year after that, I was hired by one of the largest magazine groups, and then another. 

Mind you, while I also do media consulting, it's a very small part of my focus. Baekdal Plus (my own site) is by far the main focus of what I do. 

What are some other newsletters that you always make sure to read every week? 

There are a lot of very good newsletters and sites out there. Media Voices, The Solution Set, Exponential View, Parse.ly, and then the are non-media newsletters like The Marketing / Analytics Intersect by @avinash. 

But there are so many of them. In fact, I experience newsletter overload at the moment. Of all the newsletters I get, I only ever manage to read perhaps 5% of them. But which 5% changes all the time. It depends on what my focus is.

Want to ask Thomas questions of your own?

Go ahead and leave your questions in the comments section and he’ll dive in and answer them.

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