Just about everyone in local news is excited about reader revenue.
The term is for membership and subscription programs, and the enthusiasm is driven (as best as I can tell) by the hope that it’s an earned income stream that philanthropists and civic-minded folk approve. I’ve remained a holdout, in large part because I’ve seen the spreadsheets before.
Back at Technical.ly’s launch in 2009 and 2010, we looked seriously at membership models. And I was keen on it as a strategic bet for an ecosystem approach to local news. But the more I learned about the math, the local economics looked difficult. The math I got interested in: at $100 year from 500 members (which always looked ambitious for most small and niche media) would get you $50k a year. Trouble is that that almost certainly would need full-time support to manage, thereby costing more than it brought in.
No doubt it could work at wider scale — true town-square news orgs, like a metro newspaper, or a regional public media outfit, or the nonprofit newsrooms that filling full news deserts. But I’ve been less certain if the bench was deep of orgs that could step. Fortunately we at Technical.ly got a generous investment from the Lenfest Institute to explore more — and this month we brought together a coalition of news orgs to bring together our joint promotion. Last fall, I presented our early findings, and I got feedback I wanted to share.
My Oct 2017 presentation on our news membership model
Here are a few notes in feedback I got on news memberships:
- News Revenue Hub strongly acknowledge that memberships don’t work if a newsroom doesn’t take real ownership of it. Can’t just be business as usual, and It’s growth should be tied to editorial too
- Unrelated note: Backyard Media niche podcast network founder says 50k per episode download is normal podcast threshold of being big time, but 5k is the smallest they work with
- News Revenue Hub says 5k email subs and 25k page views is a minimum for successful membership campaigns. This has to be something the newsroom sees as their contribution to revenue
- $10 a month or $120 a year is what they see as the most common best price point
- 10 percent conversion of newsletter subscribers is “very solid,” though 5% is a goal, and 2-3% on the low end