Beyond subscriptions what prompts readers to pay?

The news that The Guardian was in danger of making a profit caused a bit of a stir in the reader revenue world. After poking fun at their “begging bowl” paragraphs at the end of every article, publishers and subscription marketers were forced to reassess their prejudices. Maybe voluntary contributions combined with large-scale free digital access could be a way forward? So perhaps the dogged focus on the traditional subscription model now needs to be broadened to other approaches to reader revenue.

The Guardian’s story is impressive – 55% of their revenues are now digital, driven by advertising of course, but also by a growing body of readers who contribute financially. They have over 655k regular supporters, including 198k digital subscribers and 110k print subscribers, in total 365k people who contribute on a recurring basis, and around 300k who have made individual contributions, some more than once.

Can altruism be a business model?

Intriguingly, over half the contributions come from the US, typically a one-off contribution linked to a story. Maybe there is more of an ethos of making philanthropic donations to support journalism across the pond?

And perhaps readers who contribute to the Guardian have a sense that they are supporting a cause or encouraging investigative journalism in a world of “alternative facts.” So maybe this route of altruistic contributions isn’t open to all publishers.

The Guardian reader revenue teams can’t be accused of leaving stones unturned. They obsessively test the phrasing of the “ask” at the end of the article and adjust the wording according to the content of the article and the behaviour of the digital reader. Those who click through are offered a choice of one-off or monthly contributions. They also offer a range of more altruistic and expensive “Patron” options up to £5000pa. There are some “money can’t buy” benefits, such as attending morning news conference, and exclusive events but it is largely seen as a no strings donation.

The Guardian hasn’t cornered the market in altruism. A much smaller news publication, Crikey, based in Australia, has had some success with crowdfunding appeals specifically for its investigative journalism. And start up Pactio encourages readers to contribute to the work of a specific journalist to cover a specific story. The New York Times has successfully asked its readers to sponsor (digital) student subscriptions with donation options from $10 all the way up to $2000. So far 30k readers have sponsored 3 million student subscriptions.

So perhaps the scale of the Guardian’s success is starting to challenge the traditional subscription model and prompting publishers to explore alternative reader propositions.

What is the difference between membership and subscription?

“Membership” is now in vogue although the term is often applied to what are simply enhanced subscription packages, maybe with some additional events and some exclusive online content added to the mix. Huffington Post’s membership package falls into this category as it only offers exclusive content.

There is an emerging theme of inviting “members” to participate in or maybe just observe the editorial process.

  • The Independent’s “Independent Minds” offer includes exclusive content, and emails, plus tickets to events to meet journalists.
  • Guardian Patrons get to attend morning news conference, and Quartz members can join in weekly conference calls with reporters.
  • Tech Crunch has launched a premium membership, Extra Crunch, which includes exclusive articles and resources, conference calls with TechCruch writers and a discount on event tickets.

Newly crowdfunded start-up Tortoise Media actively aims to involve its members in Think Ins to discuss topics that will become articles. Whilst it has raised over £500k on Kickstarter and claims that 21% of its 6700 members have met the team face to face, Tortoise has yet to demonstrate that it can build this into a profitable business.

The distinction between a member and a subscriber is that the latter is simply agreeing to buying content, while the former is also investing time and emotional commitment to a brand because they want to belong to a group or identify with a cause. Not every media brand can command this level of commitment, but for those who can, the prize is greater loyalty and steady revenues.

B2B and professional media have long known that the real value of paying to be part of their community is the opportunity for peer networking at live events, and online. The benefits are less clear cut in consumer markets, as while readers might like to mingle socially with like-minded individuals, there is not such an obvious value in connections.

However, anyone who has worked for a true membership organisation, whether consumer or professional, will know that members are high maintenance, expecting personal service and influence, so membership is harder to scale than subscription, and more costly to service.

Moving to a diverse landscape of reader payment options

All this shows that publishers are starting to explore in more depth just what motivates readers to pay for content and services, and experiment with alternative payment models.

The experiences of Later Pay, a micropayment system, which makes it easy for publishers to test out the idea of asking readers to pay small sums to support their journalism, are interesting. Not only do they generate new revenues for the media business, but around 16% of readers who make voluntary contributions go on to become a more committed supporter buying either a time-based pass or a longer subscription, undermining the myth that micro-payments reduce the likelihood of subscriptions.

So what I see as the future of reader revenue is a far more diverse landscape, even within single media brands, where readers are prompted to make small altruistic contributions to articles or investigations on topics they support, there are multiple subscription options of varying terms and packages, and there are also membership tiers for those who want to get closer to the editorial action.

If you’d like to meet up to chat about new ways to encourage your readers to pay for content, I’d be happy to talk – just get in touch.

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