At the Cap Times in Madison, Wisconsin, and Santa Barbara’s Noozhawk, a sizeable percentage of revenue comes from their membership programs. The key? Be transparent with your community about your business model and any gaps in revenue. Editor’s Note: P.S. Our thanks to Katie Hawkins-Gaar of News Revenue Hub for the original story, insights, quotes, and key takeaways.
Since it launched in 2016, the News Revenue Hub has worked with over 70 U.S. newsrooms helping them raise over $70 million in volunteer donations. In the process, it has proved that consumers will voluntarily support the production of news and information they value and trust.
While more than 90% of the News Revenue Hub’s clients are nonprofits, a few are commercial publishers with paid revenue models including Noozhawk and The Capital Times. So far, they’re finding success. At the Cap Times, a digital-first newspaper in Madison, Wisconsin, membership now accounts for 20% of its revenue. At Noozhawk, a news site based in Santa Barbara, California, 30% of revenue comes from its membership program.
The success is encouraging says Mary Walter-Brown, Founder and CEO of the News Revenue Hub, adding, “What we’ve learned, working with both Noozhawk and Capital Times, is that if a news organization is willing to be transparent with their community about their business model and about the gaps in revenue they’re experiencing, the public will be responsive to that.”
When newsrooms start dedicating more time to listening and communicating with their audiences, and less time on manual tasks, that’s when you start to see a real shift in how quickly readers are willing to contribute.Mary Walter-Brown, Founder and CEO, News Revenue Hub
Addressing steep drops in ad revenue
For The Cap Times, the challenge was a familiar refrain heard across the States, namely steep drops in advertising revenue and newspaper subscriptions. To fill gaps in revenue, it launched its own voluntary contribution program in 2019 which could best be described as homespun. Chris Murphy, Cap Times’ Managing Editor, says, “We had PayPal that was welded onto our CMS and there was a lot of downloading of spreadsheets and putting things here and there.”
Since then, the publisher has worked closely with News Revenue Hub to evolve its membership program into a robust revenue stream with 71% recurring members, “What we’re selling is local journalism in the community and over the past three years, we’ve found that that’s the strongest sales message.”
Hand in hand with this, especially for commercial news publishers, is the need to be transparent about their finances and business model. Walter-Brown says, “I think that the skepticism around funding for-profit journalism is that somehow these donations are going to go in the pockets of shareholders.”
You have to be really prepared to explain to the community that that money is going to be reinvested right back into the newsroom — into the reporting — and you have to be able to demonstrate that constantly.Mary Walter-Brown, Founder and CEO, News Revenue Hub
Walter-Brown adds, “When newsrooms start dedicating more time to listening and communicating with their audiences, and less time on manual tasks, that’s when you start to see a real shift in how quickly readers are willing to contribute.”
The importance of newsletters
For Noozhawk and Cap Times, newsletters are their main method of convincing readers to contribute. Just over 8% of Cap Times’ newsletter subscribers are paying members, and Noozhawk is converting 10% of their newsletter readership. Last year, the net revenue per paying contributor for Noozhawk was $126. For Cap Times, it was $100.
The Hub helps both organizations work on fundraising appeals, whether in monthly emails or standalone fundraising campaigns. For Walter-Brown, the messaging for commercial news publishers needs to be crafted carefully, “Some for-profit newsrooms have had trepidation about using traditional nonprofit messaging because they’re not a nonprofit. They’re proud for-profit businesses in their community.”
“We know that the cookie-cutter approach to campaign copy isn’t going to work for a lot of these for-profits. They have to feel comfortable with the language used.”
In the end, it’s about community
Walter-Brown says one of the main things she’s learned from working with small, independent, for-profit newsrooms like Noozhawk and Cap Times is that the distinction between for-profit and nonprofit is really a matter of tax status more than anything else.
What’s important is how you relate to your community and how you communicate your value. Both of these newsrooms have become trusted sources of news and information in their communities through some very difficult times. That forges a powerful bond with their readers.Mary Walter-Brown, Founder and CEO, News Revenue Hub
Both Noozhawk and Cap Times hope to grow their membership programs over time but they’re also satisfied with the number of readers who continue to offer long-term support. The Cap Times has a rate of 71% recurring members, while 65% of Noozhawk’s supporters are recurring members.
We are agnostic about whether an organization is for-profit or nonprofit. What we’re passionate about is working with newsrooms that have committed to keeping their content open, free and accessible to everyone in their community and we want to help them build reader revenue programs that allow for that.Mary Walter-Brown, Founder and CEO, News Revenue Hub