“Reader revenue has freed us from the shackles of others we can’t see or who don’t care.”
The Daily Beast’s membership product, Beast Inside, has seen nearly 100% growth in sign-ups when comparing the period of January 1 to March 15 versus March 16 to present, according to Digiday. It’s helping the publisher recoup some of the losses from the decline in programmatic advertising due to the coronavirus pandemic.
While CRO Mia Libby did not share specific figures, she said the average order value on Beast Inside memberships is up 35%. Memberships is the second largest revenue stream for the publisher and has increased commensurate with subscriber growth, she added.
The Guardian which became profitable last year simply by asking readers to donate, has grown from 12,000 members in 2016, to more than 655,000 monthly supporters at present.
“Isn’t just a subscription by another name”
Membership can be an enduring and substantial source of revenue for publishers because it is based on a strong relationship with the readers. “In membership, there’s a different social contract or value proposition between the site and its members,” writes Emily Goligoski, Research Director, Membership Puzzle Project.
At the basic level of: What do you give? What do you get? Subscribers pay their money and get access to a product. But members join the cause and participate because they believe in it.Emily Goligoski, Research Director, Membership Puzzle Project
“A successful membership project isn’t just a subscription by another name—it’s an editorial mindset that values a strong relationship with readers, not just the one-way street most news organizations remain accustomed to,” adds Rob Tornoe, Columnist at Editor and Publisher.
Publishers interested in building a revenue stream from membership need to first identify their “whales”—their most enthusiastic and engaged readers—suggests Rob Ristagno, Founder and CEO of the Sterling Woods Group.
You know your whales when you see them. They’re wearing a hat with your logo on it. They treat your editors like celebrities. They read and comment on everything you send them. They’re the most committed 10-15% of your audience.Rob Ristagno, Founder and CEO, Sterling Woods Group
He adds that whales generate as much as 70 to 90% of reader revenue. Moreover, focusing on whales has other proven benefits. They:
- are less price sensitive, making them more profitable
- retain better and buy more often, thus increasing their lifetime value
- provide favorable word of mouth marketing
- want to help you innovate
- behave more predictably
“The key is focus: We need to stop being everything to everyone and start honing in on our best readers,” says Ristagno. He recommends surveying them to understand their needs and wants followed by developing a value proposition to address them.
“You don’t need a boatload of features to be successful”
INMA’s Researcher-in-Residence, Grzegorz Piechota, listed the following needs that the media can fulfill and which people are willing to pay for.
- Cognitive needs (acquiring information, knowledge, and understanding)
- Affective needs (emotions, pleasure, and feeling)
- Personal integrative needs (credibility, status, and stability)
- Social integrative needs (family, friends, and community)
- Tension release needs (escape and diversion)
“It’s interesting that when we lock content, we just focus on one of these needs—the cognitive need,” said Piechota. “We charge people to access the information, for the access to knowledge. But in fact, people actually engage with the media for many other reasons.”
After defining the value proposition, the publisher needs to figure out how to take all the content, data, and access to experts and communities it has, and turn it into something that lives up to the promise of the value proposition, comments Ristagno.
It’s not about throwing all of your content together and calling it a membership program, it’s about strategically selecting the content that is of greatest value to your whales and crafting a membership program with additional features around it.Rob Ristagno, Founder and CEO, Sterling Woods Group
He adds, “You don’t need a boatload of features to be successful. Rather, just two or three things on top of a subscription to your content is usually enough to drive conversions. Just make sure these offerings solve the tangible and emotional needs of your whales.”
These can include access to experts or editors, tools that make it easier for members to do their jobs or pursue their hobbies and educational resources, like videos and eBooks.
The Guardian uses a dual pronged approach, according to a Lenfest Institute report. This includes:
- Providing enough value to attract and engage consumers in the free content, while offering premium, behind-the-scenes material as an added benefit to members
- When the company publishes a story that holds truth to power and generates a lot of attention, it is paired with a highly active membership drive.
At The Guardian, patrons (members paying £1,200 a year), get access to exclusive events, backstage tours, member-only newsletters. Those who pay £2500, also get to attend the morning editorial conference with Editor-in-chief, Katharine Viner. They get free event tickets and ad-hoc bespoke experiences tailored to their interests as well.
“A news organization needs to buy into the concept completely”
Membership is not just a marketing play for the publisher but is owned in equal part by the newsroom. One of its editors is incharge of membership and helps define the strategy with the commercial team.
“For membership to succeed, a news organization needs to buy into the concept completely. It cannot be something that a person or team does alone,” wrote Styli Charalambous, the Co-founder and CEO of Daily Maverick, in a piece for NiemanLab.
The South African investigative news site launched its membership program in August 2018. At that time they were not sure how they were going to fund the December payroll. A year later they had more than 7,000 members and a 75% growth in headcount.
That may seem to be a small number compared to the leading publishers but is actually a substantial achievement considering the context.
“If you’re not familiar with the challenges of the media industry in South Africa,” said Charalambous. “Take the media apocalypse in the US or Europe, subtract a lot of skills, and add a steroid injection of political chaos, all inside the decade of digital disruption.
“To say our industry is in a deep, dark hole from which it might never escape is downplaying the size of the problem.”
Daily Maverick was founded in 2009 as a digital-only news startup and carved a niche by offering quality, long-form analysis and opinion for free. But there was a constant threat to its survival, and by the end of 2017, the publisher was “fast running out of friends, fools, and family to invest in or lend to us,” explained Charalambous. That’s when they started considering options to generate reader revenue.
“We’re taking back control of our own destiny”
They rejected the idea of a subscription paywall model because South Africa is a poor country and a substantial percentage of the readership would not be able to pay. “Allowing only those with means to access Daily Maverick content would make us even poorer,” Charalambous commented.
They started experimenting with membership strategies with the help of the Membership Puzzle Project. The goal was to keep quality journalism and investigations free for all, and enable the publisher to continue doing its role as a watchdog.
They learnt that South Africans readers were willing to financially support a cause they identified with. Surveys conducted in the weeks before the launch helped them identify the top features prospective members would value: These were:
- Engaging with Daily Maverick journalists and staff
- Ad-free browsing
- A members-only newsletter
- Invitation to events and discounted tickets
- The ability to comment on articles
200 people signed up to the Maverick Insider on launch day. Now as the publisher approaches the 10,000 milestone it is looking at new commercial opportunities like a printed product, a book division, and/or speaking engagements for its journalists.
“Reader revenue has freed us from the shackles of others we can’t see or who don’t care,” wrote Charalambous. “We’re taking back control of our own destiny through the direct relationship with our members.”
He concluded, “outside of the few global players winning in the subscription space, the news publications that seem to be carving out a sustainable model, and not reliant on a single type of funding, are those embracing the membership model.
“Not only can membership save journalism, but it will do so by helping it evolve.”