Poll: Give Away the Tix, Sell the Sponsors?
The web 2.0 model says grow as fast as possible by providing free content, and then once you've scaled your audience, monetize it through advertising. Today, CNBC's Darren Rovell profiles the American Drag Racing League, which has taken that model offline by offering free tickets and in the process has doubled overall revenue (85% of which from sponsorship).
Here's how ADRL pulls off the new strategy:
In an article earlier this week, Mike profiled a property called Playmaker that is pursuing the exact opposite strategy. It's sacrificing some growth, in exchange for focusing on a niche and perhaps more loyal audience than it would have had under a "free" model. The theory here is that by focusing on a more niche audience, you'll probably be able to find advertisers that are more targeted to the collective interest, thereby making it more lucrative to both sponsor and property.
But ADRL's new model, and their apparent success, suggests that by giving away free you can dictate who your demographics are. Rather than a company sponsoring the existing content/sport/media, it's really the sponsor deciding who should be watching that content/sport/media. The flexibility may entice sponsors initially, but for the long run viability of the sport this could be a risky strategy. Nevertheless, doubling revenue through sponsorship in a down economy is a pretty impressive feat so we throw it out to you: