The latest publisher subscription model: memberships
A digital media riddle for 2014: When is a subscription more than just a subscription? Answer: When it’s a membership.
In response to incredible shrinking ad revenue and mounting pressure to diversify their revenue streams, publishers are increasingly building out tertiary businesses like brand content studios and research products. But at a handful of niche outlets, publishers are experimenting with something more akin to the public radio model: more inclusive membership experiences for its most-avid readers.
Adherents of the membership model — from the National Journal, The Guardian and tech blog Pando — claim memberships can both pull in more dollars and develop more engaged audiences. It is, they say, more than just a semantic variation on the subscription.
“Memberships are a fundamentally better way for us to serve our audience. We can start a dialogue with our audience and ask them what’s keeping them awake at night and give them solutions,” said Poppy MacDonald, publisher and co-president of National Journal, the Atlantic Media-owned magazine aimed at Washington insiders.
National Journal’s membership program, which it started three years ago, gives readers perks like weekly policy summaries, access to its policymaker database, and networking events for “modest four- to high-five-figure investment” a month. Reader response has been significant by itself, MacDonald said, but it’s also had ancillary effects on the National Journal’s existing subscription businesses: The magazine’s membership program has helped boost its formerly slumping magazine renewal rates to “well above” the 85 percent industry average.
Beyond that, while subscriber-generated revenue used to make up half of the National Journal’s total, the success of its membership program has helped push that upwards to closer to 60 percent. That, in turn has reduced the magazine’s reliance on advertising revenue, which many publishers have been eager to do as well.
“You can’t really count on predicting ad revenue year to year. With our memberships, we have a strong source of predictable, renewable revenue,” MacDonald said.
Besides the obvious revenue implications of memberships, publishers are also pushing the programs as effective ways to deepen brand loyalty. Pando, for example, plans to play up the access angle by using its membership program to give readers priority access to its monthly events. It also plans to give members access to its quarterly magazine. The company plans to charge roughly $25 a month for the program, said Paul Carr, editorial director at Pando.
“It’s your most loyal, most core, most eager readers who are the keenest to pay for things, so you really have to go out of your way to give them something really valuable,” said Carr. “You’re not ‘subscribing to’ Pando. You’re very much joining the community around Pando,” he said.
Slate is trying a similar tactic with Slate Plus, its own membership program. Same goes for The New York Times with Times Premier, which offers perks like reserved seating at Times events and the ability to share content access with family members.
The Guardian, which plans to roll out its own membership program in the UK this summer, has already tried its hand at the sort of access-based events the program will offer. Last year, the newspaper ran an open house where it let readers visit its London offices and talk with both its writers and other readers. Within two days of announcing the program, it had sold over 6,000 tickets, which sold for up to $100 each.
“That was just us opening our doors for people to come and have a wandering around,” said David Pemsel, Guardian deputy chief executive.
Pemsel added that the Guardian has big ambitions for its membership program, which could offer readers access to live interviews with world leaders and celebrities. The company is also considering buying a dedicated events space in London for these kinds of events.
But the membership model won’t work for every publisher. The most effective memberships are those based off niche coverage areas like tech or politics, which not every publisher can cater to. This is why the model would work for National Journal and Pando but not necessarily for, say, more general-interest publications.
“I think there are many organizations trying to slap on memberships, but if you’re trying help people do their jobs, it’s hard to pull that off if you don’t know who the audience is that you’re serving,” said National Journal’s Poppy MacDonald.
David Pemsel echoed the sentiment. “The only way you can create these kind of relationships,” he said, “is by having a brand people trust and respect.”
Image via: Shuterstock/voldemar
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