The Pros and Cons of Charging For Membership

I put together a quick table

Should you charge people to be a member of your online community?

Pros	Cons
Direct revenue. You’ll be the envy of all web 2.0 companies. Focus on the few. You can stop focusing on reaching everybody and focus on a few members. Wipe out the lurkers. It doesn’t pay to lurk. Greater participation. Members will participate more often if they’re paying. Change of mindset. You’re forced to serve your paying members.	Less members. Not useful if your marketing strategy is to reach as many people as possible. Competition. A free community might replace you.

Charging for membership might be a very good idea. 

It forces you to provide a level of service that reflects the price you charge. It also narrows your focus to fewer people (also good) and gives you a direct revenue. Direct revenue means either profit for your business (if you're hired to do this) or the chance of a full time job (if you build communities solo).

Comments

[Olly]

Would be interested in hearing some stories of communites successfully charging (outside the obvious dating and ultra niche scenarios)... do you have any?

Say hello to the age old (well 24 months old) debate of niche content/value being the only route to charging.

[Sue]

Certainly food for thought.

I'd imagine it would have to be a very niche market/audience, or alternatively the community would have to offer benefits not found elsewhere in order to justify the membership fee.

Direct revenue can be obtained from advertisers who wish to purchase ad space within your community, and as such lurkers would be contributing to revenue as they would be viewing the ads. If you don't go overboard with ads it can bring in a large revenue and a target audience for the advertisers.

[Sara]

Thanks for bringing up this issue. If there are any communities out there that do charge membership, it would be great to hear from them.

I wonder, does charging for membership change expectations around quality of moderation? Do paying members expect stricter (or more lenient) enforcement of community guidelines? Do they expect to be able to say/do whatever they want b/c they paid to be a member?

[Urs E. Gattiker]

Richard

Very nice post. I find your arguments about having to focus more when charging very convincing.

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[Angela Connor]

Hey Rich: I agree that charging would definitely make you bring your A-game. I've been looking at the MarketingProfs model. I'm intrigued by it, though it seems they have a pretty sizable staff.
This is something to think about.