This is awesome and worth reading!

One critique: I think the napkin math for Rogan's possible indie subscription business is too optimistic.

Why? There's a deep integration between editorial product and business model, and JRE is not optimized for subscriptions.

(thread) https://twitter.com/awilkinson/status/1263886403810717696

Andrew's guess was: 11m downloads per episode x 5% x $5 x 12 months = $33mm in ARR.

I think there's roughly zero chance he gets 5% conversion on 11m downloads, for a several reasons:

1. It's not really 11m people. There are a ton of bots and auto-downloads included in that. I bet it's more like 8m actual fans.

2. You can only convert 5% of an audience to paying if they're affluent and consider your content as helping them achieve important personal or professional goals.

I would bet JR's millions of fans are not more affluent than average, and think of it as a fun time killer.

So how many do I think he could convert? (It's a moot point since he's at Spotify now, but I can't resist! haha)

Probably 2.5% of 8m, which at $5/mo would be $12m ARR.

But wait — what about churn? How fast would he be able to grow this if he's losing people? The more casual your content and fanbase, the less affluent your audience is, the higher your churn.

Based on the benchmarks in this post, I bet JR would have 3-5% monthly churn. It's high for a SaaS business, but he's not offering a utilitarian b2b tool. https://www.cobloom.com/blog/churn-rate-how-high-is-too-high#

So, bringing it all together, let's say JR launches and gets 2.5% of his 8m fans to pay $5 a month, and 3% churn every month. That's 200k paying subs.

In order to keep growing, he needs to add >6k paying subs a month.

Hard to grow quickly in this scenario.

Now, imagine you're JR, and compare this to a world where Spotify guarantees you a hundreds of millions in upfront cash, and you don't have to worry about what content to put behind the paywall or how your subscription business trades off with advertising...

I'm a huge believer in subscription media. But I think there's a deep integration between content and business model, and it's not easy to slap subscriptions on after you've optimized your editorial product for an advertising-based model.

People only pay for content under particular circumstances. @danshipper are learning a ton about this every week. Right now we're at ~10% conversion, and it feels like a ratio we can maintain.

The more we learn, the more different we realize the content has to be.

(the end!)