“We’re a community service”: how The Local built its successful membership model across nine countries
If you have ever lived in a European country, chances are you’ve come across The Local – an English-language news source for residents of all nationalities. Founded in Sweden in 2004, it has since expanded into eight other countries: Germany, Italy, France, Spain, Switzerland, Denmark, Norway and Austria, as well as its Europe edition which aggregates content from the other sites.
The Local came into being after James Savage, a trained journalist in his 20s, read a newsletter written by Paul Rapacioli, who had previously founded recruitment site reed.co.uk – both of whom were living in Stockholm at the time. “It started off part-time, but very quickly we realised there was a need among people living in Sweden, wanting to find out more about the country,” Savage told me.
The Local has now transformed beyond recognition from its early days. With around 20 full-time staff, it provides a unique blend of news and advice delivered via country-specific websites, newsletters and podcasts to five million monthly unique users. It serves a very practical purpose in the eyes of its core readership, not only educating them about what’s going on in a particular country, but helping them to find a way through the challenges of living there, from buying a house to family reunification.
In doing this, The Local also serves an important emotional purpose: as successive geopolitical crises have rocked the continent, from Ukraine to Brexit to Covid-19, it has become something of a digital support system for the hundreds of thousands of foreign-born residents in Europe for whom English is the lingua franca.
In acknowledgement of this, The Local won the Swedish Magazine Publishers Association’s Grand Award 2021 (Sveriges Tidskrifters Stora Pris). Savage was personally recognised “For his ability to offer a completely new target group generous digital journalism”, and for “creat[ing] a societally important community […] Thanks to his strong relationship with users”, according to the jury.
In a recent call with FIPP, Savage reflected on 18 years of The Local and how it advocates for its readers’ interests, as well as their relatively recent decision to shift to a successful membership model and how that’s guided their editorial output.
Advocating for those without a voice
The Local’s audience is different in each country, and represents a wide mix including remote workers, diplomats, employees at big corporate firms, second-home owners, retirees and students. Some people have moved there by choice, some have not; many are long-time residents, others only staying temporarily. The majority of readers are from non-Anglophone countries; between 15 and 20 per cent are British.
What is common to this diverse array of readers is a desire to know more about their host country, from key debates in national politics to the dates of public holidays – information that they just aren’t able to easily find using other news sources. This was especially the case two decades ago when The Local first started.
With time, then, The Local’s co-founders realised that they were meeting a very particular need – and that the same need must exist in other territories, too. “We thought that we could quite easily take the model that we built in Sweden and apply it to lots of other places as well,” explained Savage. “So we expanded throughout the noughties, and then the 2010s.”
Governments weren’t thinking about how things like travel restrictions would impact people for whom travel is not just about going on holiday.
Savage doesn’t think that national media have any special obligation to serve foreigners in English – or any other language. But he does think that the team at The Local has been better at identifying the needs of this specific audience: “So on that, I’m happy for public broadcasters and state media to leave it to us,” he said with a laugh. “I think we do a good job.”
In particular, he thinks that governments find it very hard to relate to the lives of people who have come from another country, who may be struggling to understand policy decisions. Even though he’s been a Swedish citizen for many years now, he never forgets the feeling of uncertainty and stress, having gone through the immigration process himself. He still receives a lot of messages from readers who are struggling with visa issues and even deportation.
“And so one of the things I think we’ve managed to do to a certain extent, is raise some of the issues that affect this group, like asking a question in a press conference on their behalf,” he said. “You’re very vulnerable as a non-citizen, and people are often inadvertently shut out of the system. We can be there as a voice for this significant minority of people.
“During Covid for instance, we had governments imposing these massive restrictions on people’s lives and freedoms, without necessarily thinking about how things like travel restrictions would impact people for whom travel is not just about going on holiday.”
Chart showing percentage of foreign-born residents in different EU/EEA+ countries. The countries in which The Local operates are highlighted. Source: OECD (2022), Foreign-born population (indicator). doi: 10.1787/5a368e1b-en (Accessed on 30 March 2022)
Move to a membership model
Confidence in their value proposition to this core audience became the driving force behind The Local’s fairly recent shift to a membership model. There were other factors, too: in the time since its founding, the media ecosystem has changed enormously.
“Back at the beginning we were selling a lot of banner ads. Gradually, we moved into native content and that became our main revenue stream,” explained Savage. “The advantage of that is it’s nice to have long-term relationships with clients that sell, and the ads are high value. We still use native ads for that reason – it’s still a valuable revenue stream.”
In the mid-2020s, however, they saw native’s limitations more and more clearly. “The first is that we were reliant on relatively large deals that were quite slow moving, and you never knew when they were going to come in. Planning our business and cash flow around that was quite difficult. Secondly, it’s also a fairly low margin business, because unlike a banner the cost of production is high to produce a native article.”
That was when, after doing a lot of research, they made a dramatic choice: a pivot to a multi-tier membership model. They began in November 2017 with a paywall on The Local Sweden, before rolling out the membership model across all the other sites, a process that was completed with The Local Austria in 2020.
“I think it’s quite important to distinguish membership from subscriptions,” Savage pointed out. “What we decided is that we have a very important core readership who are the ones we want to ‘super serve’. In the past we’d had pieces of content going viral, and that was good for programmatic revenues, which gave us some really cool headline figures. But these readers weren’t interested in our core offering.”
For The Local, focusing on subscribers has helped us grow our core audiences in Europe’s big cities. Our community pays our bills, which helps us serve them better, and so our community grows. A positive spiral. pic.twitter.com/8hI25j293c
— James Savage (@SavLocal) February 7, 2020
A two-way street with readers
Members, on the other hand, return again and again to The Local to source not only news, but practical advice about day-to-day life in their country of residence – how to get a Covid-19 vaccine, pay taxes, or get language lessons.
This, in turn, has led to a shift in the kind of content The Local’s staff put their energies into – less breaking news, more explainers. “These are the articles most likely to lead to a conversion to membership,” said Savage, “because we’re looking at how a new rule affects someone’s life – we’re explaining what it means for you.”
Members are also much more invested in the publication and are happy to share their opinions, building on the valuable two-way relationship between publisher and reader. “What a membership model teaches us is what’s valuable for our readers, not just what people are willing to click on in a lazy moment,” said Savage. “It’s telling us what people really need.”
Since making this switch, some 53,000 readers have converted, with France, Italy, Germany and Sweden being the biggest countries. Members get access to all of The Local’s nine editions, while a flexible pricing strategy ensures that average local salaries are taken into consideration. What’s more, roughly half of these members are on an annual subscription, a strong indication of their loyalty.
“Our demographics in each country can be quite different,” explained Savage. “If you take Switzerland, salaries are higher, and our readers generally tend to be mid-career, working age people. In rural France, though, people are mostly pensioners. This is a really dedicated group of readers, but they’re slightly more price-sensitive.”
Each country’s editorial team now focuses more than ever on creating content that serves audiences’ particular needs, with a roster of newsletters, Q&As and member-only content. Apps are also increasingly important to The Local, said Savage, since although they are quite basic at the moment, they are good for converting to membership. He hopes that they will have a richer functionality in the near future.
This is a new feature that we’re trying out for subscribers to The Local – all the news, info and talking points from France today in one place. Let us know what you think!https://t.co/nMO1rGFBU1
— The Local France (@TheLocalFrance) November 9, 2020
Publisher responsibility during times of crisis
The invasion of Ukraine has shocked both readers and staff at The Local. “It obviously has significant implications for certain groups of readers and, and different implications for the different countries that we’re reporting from,” said Savage. In addition to directly reaching out to Ukrainian readers to gather their reflections, the publication has pivoted to covering the war in detail, as well as related domestic considerations specific to each country.
“So in France you’ve got Macron being very active, and he has an election coming up. In Switzerland, you have the issue of neutrality. Then there are really interesting aspects of it in Norway, which shares a border with Russia. Then there’s Sweden – a non-NATO country that’s very close to Russia, and that has been threatened by Russia in various statements in recent weeks, as well as in previous years. So it has reignited this debate over whether Sweden should join NATO. And then you’ve got the energy question as well, which obviously for Germany is a huge, huge deal.”
The Local is definitely a community service.
Savage spoke about what many now call the “permacrisis” we are living through – beginning perhaps with 9/11, then the financial crisis of 2007/2008, through Brexit, Covid-19 and Ukraine – in which successive and complex events with world-changing effects take place.
“We’ve entered a period of such uncertainty and danger,” he told me. “And I think that’s affected everyone in the company in all sorts of ways, because you’re feeling a sense of such uncertainty about the future. Every couple of years, we change crisis.
“Brexit was important for us – apart from the fact we’ve got a lot of British employees, from a reporting perspective, we also have a lot of British readers in Europe.”
After that came Covid-19, which was not only a frightening health crisis on a scale never seen in living memory, but a social crisis for The Local’s readers – many of whom live in one country but have strong ties to somewhere else. Whether due to work or kinship ties, these readers are reliant on restriction-free travel, so the introduction of strict border controls even within Europe’s Schengen Zone was catastrophic for them.
Under these circumstances, The Local’s blend of news highlights with need-to-know and explainer content has become a lifeline for many of its readers, as they navigate post-Brexit bureaucracy and constantly shifting Covid rules.
“The Local is definitely a community service,” said Savage. “What we’re doing is building and serving a group which is, in some respects, quite disparate – but in others has very strong common interests, in the way that foreigners living in another country do.”
“Credibility is really important”
Having worked so hard to meet the needs of this particular group, it gave staff at The Local a huge morale boost to win the Swedish Magazine Publishers Association’s Grand Award last year.
“Credibility is really important in this industry,” said Savage. “And most of it we get from our existing readers. But to get that kind of recognition from industry bodies adds another level. You’ve got a lot of legacy brands in the media industry who’ve been around for 200 years. The Local came along less than two decades ago.”
Savage thinks it is important to have good relationships with local media so that brands can learn from one another. “I think smaller media brands especially could learn from our approach. The Local has come a long way with its membership model in a way that many others haven’t. We’ve done really well with newsletters as well,” he said.
As for the future, advertising will remain part of the mix, but “We see membership as being the future model, 100 per cent,” Savage told me. “Why? Because it’s sustainable, it’s about making our readers part of what we do, building long-term value in the brand. And we can justify building on this membership model – we have a strong USP. If you’ve got a very strong proposition and a strong place in the market, there’s value in that.”
Other options, like pay-per-article, are less appealing to Savage. “For us, that’s not what this is about. It’s bad for media, because it leads to a lack of predictability, and that makes it harder to make investments. But I also think it’s devaluing the relationship with readers. And, you know, it’s devaluing that two-way communication where we are learning from our readers and they are learning from us and from each other through us. That’s the core of it.”
