A membership model requires over-delivering for your supporters
He spoke to Ulrike Langer ahead of the Digital Innovators’ Summit 2016, taking place from 20-22 March in Berlin Germany (Save at least €800 on final delegate rates if you book before 30 November).
How would you describe a membership model in media?
What the term membership means is rapidly changing when it comes to media because in an earlier era a lot of people associated it with the public radio membership campaigns (in the US). Then you were really just giving out of the goodness of your heart. Maybe you got a T-shirt or a tote bag but the ask was really about being a good citizen and support journalism and the value of public media. Almost a sort of charity and you get a little bit of a token in return for your donation. But in the current media climate memberships are is evolving way beyond tote bags and one-time donations. The real goal is to get people to be sustaining and recurring donors and making the case to them that giving five or ten dollars a month to public media that’s something worth supporting. It’s not just about one-time donations during annual campaigns anymore.
But that’s public media. Are memberships a good strategy for for-profit publishers too?
More and more for-profit and public media organizations are starting to get a lot more sophisticated about membership strategies and about the conversion funnel from casual readers to subscribers to members. About moving them up to become bigger supporters of their news organization. You have to identify and give incentives to those members that are going to be your core readers that find your con-tent to be indispensable. Maybe you can offer them something more that has value that they are willing to pay for. You can add tiers of memberships with access to certain events and maybe even more access to journalists.
What’s the difference between a subscription and a membership?
I think the industry is still working its way through the distinction between subscriptions and memberships. In some ways they are the same thing. Essentially the membership they are providing is a service for niche topics, entitling members that are signed up to very specialised reporting. And in the case of Slate members are signing up for different events and access to reporters as well.
Who else in magazine media is doing memberships well?
Politico with its Politico Pro paid content strategy, which they call memberships. Slate has Slate Plus. And the National Journal. They are going to eliminate their print magazine and cut staff by 25 per cent in favour of a more digital membership-based model which they say is thriving. Their premium paid content for Washington DC insiders is similar to Politico’s: serving information digitally to an influential group of policy makers. Whether that can compensate for the loss of the print magazine will be interesting to see. Another example is the Conservation Magazine at the University of Washington in Seattle. They’ve also abandoned their print magazine and are now reframing themselves as the environmental media lab. They sell environmental stories a la carte as a way to generate individual article sales and repeat sales and eventually convert people into signing up as members in a more sophisticated way.
Should live events be a core element of a membership strategy?
I think that as ambassadors of their organizations journalists should be open to hosting events and convening them. But I don’t necessarily think that the Washington Post’s salon events at Catherine Grahams’ house were the right way to go. They were effectively selling lobbyists special inside access to reporters. Something smelled fishy about that. So the Washington Post abandoned that but then re-crafted its event strategy to be much more of a sponsorship for anybody. They weren’t necessarily selling access to the journalists. Now the journalists moderated discussions or panels that were sponsored by membership fees.
Events can be a big draw as membership incentives. At an event with big name speakers you might be able to attend for free or for a certain ticket cost but then on the next level, if you’re a member, then maybe you get to go to a reception and have special access privileges that the general public does not have. That’s a way to add different tiers and levels to memberships to maximize value. Events can help paying for other forms of journalism that aren’t as easy to monetize in themselves such as investigative long form journalism. Some of the non-profit sites that I became familiar with during my fellowship at the Texas Tribune were trying out this strategy.
Some musicians, although selling less CDs and downloads, are making more money with live concerts. Do you see media in a similar position as musicians?
Yes, that’s a very good example. And it’s not just concerts but music festivals like Bonnarue, Lollapalooza, Coachella or Austin City Limits. Clayton Christensen, the noted innovation theorist and Harvard Fellow David Skok published a Nieman Report a few years ago in which pointed to the music industry as one example of an industry whose core product has been disrupted by the internet but delivering live and in-person experiences that can’t be replicated digitally has become a real cash cow for the music industry. The news industry sees a potential model in this, not as a way to entirely replace the lost advertising revenues of the legacy media era, but as one of several diversified revenue streams that can help keep journalism alive and afloat.
Do membership models require extra investments or is it more a matter of changing mindsets and shifting existing resources?
It depends on the organisation and especially the size. You definitely want at least one person solely devoted to membership who is accountable, who has goals, who approaches it methodically. It can’t be an afterthought. Membership strategies are not for everybody. They take a lot of work: maintaining databases, very strategic communications and very thoughtful strategies about the different tiers of memberships. It’s worth trying but if you’re going to try it devote enough resources to give it a fair shot. And definitely track it to see if it’s worth the return in investment. If the return on investment is fairly small given the resource investment then maybe it’s more effective to redeploy those resources into a more sophisticated event strategy, into newsletters or subscriptions. It really is a lot of work, that’s one of the conclusions that I came to after spending the year at the Texas Tribune and visiting other news organisations.
What else did you learn during your year as a Knight Fellow?
I came away from that experience with a clear idea of the elements of the Texas Tribune’s success that are unique to Austin and Texas, but also of those that are more replicable. Some factors have uniquely benefited the Texas Tribune – their leadership, the fact that there is a concentration of corporate wealth in Texas that lends itself to a state-wide identity and a more fruitful climate of corporate sponsorships than might be applicable in other areas. But I think one of the big takeaways was the persistent focus on revenue diversity. They have five roughly equal streams of revenue, memberships being one of them, that solidifies their sustainability.
Did you find a strong entrepreneurial mindset at the Tribune although they are non-profit?
Yes, they are entrepreneurially creative and really think up revenue opportunities and create them from nowhere. They sell sponsorships for the Twitter widget on their site for a couple of thousand dollars a month just by putting a black border around it and saying presented by corporation X or university Y. They try hard to get to know their readership and convert their reader’s sensibilities into revenue.
But more than anything I came away with the idea that there needs to be a shared sense of editorial and business mission, that it can’t be the sharp editorial and business divide that dominated the legacy media for so long. I sat in on meetings where both editorial and business and also the technology department were all represented and they all came at it from different points of view. They respected the idea that there were certain lines that others couldn’t cross. But they were all invested in the overall success of the mission of their organizations.
This sounds similar to some of the discussions around native advertising.
Yes, and at the Tribune some of the meetings were focused on this issue. They started their own op-ed site called “Trib Talk” which is like the op-ed page in a newspaper but the revenue component is sponsored content. It’s native advertising that clients pay for. It was very interesting to see them work through what they would and would not accept and where they drew the line in terms of what lines couldn’t be crossed. They came away from those meetings with a pretty shared understanding that they wanted the site to be successful, they wanted the revenue to pay for more journalism but they weren’t going to sell their soul to just anyway who ran a piece of sponsored content.
Do membership models and other audience engagement strategies go hand in hand?
Yes, they do. General audience engagement strategies are directed to all the readers that you’re serving. A certain percentage of your readers are always not going to financially support you. They will freeload but they don’t find your content indispensable. It’s important to get your content read by the general public so that it has impact. But I think that a membership model requires over-delivering for your supporters, making them happy and satisfying their expectations to the point where they might invest even more the next time when the next membership drive comes around.
What are some future trends to watch?
One thing that’s interesting: The Knight foundation gave a grant to two other non-profit news sites, Voice of San Diego and Minn Post to work on a new content management system that could integrate with the customer relationship management system, the CRM. When somebody logs in to register on a website you’re able to track their viewing habits and serve them better. The system will be able to tell not only which websites you’ve visited but also that you’ve attended an event about global warming and which causes you have supported. And it will serve you what’s relevant to you in that context. I think the best membership strategies in the future are going to integrate the content consumption of members, the levels that they choose to give at, the events they choose to attend and other ways they choose to be active as a member and customize the whole experience and interface with that given news organisation.
Also, I think that the distinction of membership models between public media, non-profit media and for-profit media is becoming increasingly blurred. It’s really about attracting a valuable audience that’s going to support your work and creating different levels of tiered benefits. That can help support your organization. Whether you call that membership or subscription, it all boils down to delivering on the expectation of your most loyal readers, the ones that actually pay to support you.
Jake Batsell is Assistant Professor of Digital Journalism at Southern Methodist University in Dallas, Texas. He spent the 2013-14 academic year as a visiting research fellow at The Texas Tribune, studying and documenting best practices in the business of nonprofit news as part of a grant funded by the John S. and James L. Knight Foundation. His fellowship report, “Earning Their Keep: Revenue Strategies from The Texas Tribune and Other Nonprofit News Startups”, was published by Knight in April 2015.
Download the report here and meet him at the Digital Innovators’ Summit 2016, taking place from 20-22 March in Berlin Germany (Save at least €800 on final delegate rates if you book before 30 November).
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