In part two of the Positive News story, Mary Hogarth investigates if its innovative business model could revolutionise the industry.
Since the radical relaunch and transition to an audience-owned model in 2016, Positive News is beginning to thrive, which has been made possible by investment from more than 1,500 of its readers spanning 33 countries. Although these ‘co-owners’ have yet to receive a return on their investment, the future looks promising.
“As a social enterprise, we were always going to prioritise reinvesting any surpluses into our journalism and ensuring the financial security of Positive News, while growing the organisation to increase our impact. This is what our co-owners expect, but we do want to pay them interest in the long term,” says publisher Sean Dagan Wood.
A vital objective following their #OwnTheMedia crowdfunding campaign was to build a new business model based on community, relaunch and achieve financial sustainability.
“Having used the share capital to grow the organisation, we are now almost sustainable through earned income. Once Positive News moves into a sufficient level of profitability, then we will be able to consider paying a return to our co-owners.
“As we advertised at the time, it was a social investment and not a financial one, which is intrinsic to our legal structure as a Community Benefit Society. But we think it’s important to reach a position where we can offer interest as a thank you to our co-owners for making our future possible. We want to show that this model makes financial sense, too.”
The magazine is distributed through selected WH Smith and Sainsbury’s stores, as well Eurostar lounges and independent retailers such as wholefood outlets and book shops. It has a current circulation of more than 15,000, with 6,500 subscribers – which Sean tells me is growing at 21% per year. Overall, the brand now has a combined audience – through print and online channels – of around 475,000.
As a result, its turnover has also grown at a very healthy rate of 40% year-on-year and the size of the business has tripled since its community share offer. A breakdown of its revenue streams is as follows:
- Magazine subscriptions: 61%
- Brand partnerships: 22%
- Magazine sales: 13%
- Membership: 4%
Surprisingly the majority of its revenue comes from print subscriptions. It is a position many publishers would envy.
It is clear Sean feels the responsibility to their audience owners keenly and is also determined to continue exploring new revenue strategies while counteracting a decline in print advertising.
“When we relaunched, print advertising was in decline and ad spends were concentrating into the hands of the big digital organisations. It was a struggle for many media companies, and newspapers in particular, trying to get that advertising revenue.”
Developing long-term partnerships with selected advertisers is one of Sean’s innovative strategies devised to ensure the title continues to grow. Launching their Brands of Inspiration scheme, he opted to target only ethical companies and those with purpose – offering them advertising and branded content as part of a more premium channel of promotion. Those partners had to fit the brand’s ethos and values, with their impact complementing the focus of the title’s journalistic content.
“Our website is ad-free and we opted to only run adverts in our print magazine from our partners, who work with us usually for a year or more. This meant that we could offer a more premium advertising product that was going to bring in more sustainable revenue rather than chasing little bits of money here and there from ads.”
It was a risk that paid off. Now the magazine has several loyal brand partners, drawing around 22 per cent of the revenue. As part of the partnership deal, brands have adverts in the print edition, plus branded content in print and online, which is written to a brief agreed with them but penned by Positive News’s journalists.
Transparency is a core value. “We make it clear to our readers when content is sponsored, and it works because our Brands of Inspiration partners and the subject matter they support are the types of companies and issues that interest our audience.”
Positive News is now sustained by revenue from the print edition. However, in the longer-term Sean says the focus will be on building broader revenue streams across a deeply engaged community of members who access a range of online and offline editorial products.
“We will connect with our community through multiple channels and aim to monetise that relationship through print and online. But whether people buy the print magazine or not, we want to build a foundation of on-going support through membership.”
According to Sean, developing membership income will be a primary focus in the next development phase. Part of that plan is to move towards a more to engaged, two-way kind of journalism.
“We want to listen to what our community wants – to give readers input into what we cover and how we do it, while helping them to connect with each other too.”
The aim is for the brand to be a household name. In the next five years, Sean reveals the team will be looking to significantly scale Positive News, which may require new investment – possibly through another round of community shares crowdfunding.
“I think people want more than a transactional relationship with a media outlet that just publishes information at them. Building an engaged community around our brand, its values and purpose is an excellent opportunity for us as we fit that model really well.”
A critical aspect of Positive News is their owner-investor publishing model. For me, this is a progressive way forward – one that could prove to be a more viable business model for the future of magazine publishing.
Accountability is critical here. A real transition is more likely to occur when a publisher is accountable to the readership; only then is the editorial agenda focused towards the audience’s interests and not that of the publisher. Positive News should be a showcase. With determination and verve, this team has shown what is achievable when a title publishes trusted editorial which also has a vibrant, unique and eclectic style.