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Summary:

Is offering your readers membership benefits a better approach to revenue generation than putting up a hard paywall? The tech commentary site Techdirt thinks so, and has launched some interesting new features that other traditional media companies might want to pay attention to.

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We’ve argued before that many media companies seem to be taking the easy way out by implementing paywalls — hoping to duplicate the New York Times‘ experience — instead of trying a more membership-based “velvet rope” type of model. Among the few who are experimenting with this approach is Techdirt, the technology commentary and analysis site, which just launched some interesting features for members who choose to pay. While they may not be applicable to every traditional media player’s business, they are still worth paying attention to.

The site, which is run by founder Mike Masnick through a company called Floor 64 (Full disclosure: I consider Masnick a friend) has had an online store for some time now where readers and fans could come and buy the usual type of swag many publishers offer, including e-books based on the site’s coverage. But the store has now been updated with some new features, including the ability to buy lunch with Masnick (for $250) and to do a Google Hangout with him.

There’s also a couple of humorous offerings aimed at critics of the site — including one that allows the buyer to shut the site down completely for 24 hours, for only $1 million (shutting it for a year will cost you $100 million).

Techdirt has also expanded an interesting offering called Crystal Ball: originally launched in 2009, it gives readers who sign up for a specific level of membership access to blog posts before they are published. The new version expands the amount of time they have to read — and even comment on — these posts, to two hours instead of one. And readers who pay can now see posts that are in draft mode, before they even reach the stage where they are ready to be published. Do many readers sign up for this feature? Masnick says there have been about a thousand since it was first offered, which isn’t huge but is still noteworthy.

I criticized a similar idea that Felix Salmon of Reuters came up with earlier this year, which was that the New York Times should charge hedge funds for early access to market-moving news stories — but the crucial difference is that Techdirt provides almost exclusively commentary and analysis, not breaking news. So why couldn’t the NYT take a page from Techdirt’s playbook and offer expanded access to things from writers like Nick Kristof or Paul Krugman? I think there could be a pretty big market for membership-level access to that kind of thing, and the NYT has already moved in that direction by offering enhanced commenting features to members.

Members get credits for voting on comments

Techdirt also launched a new commenting feature for paying members: called “First Word/Last Word,” it allows members to acquire credits with which they can vote up comments that they think are worthwhile and vote down those they don’t. Reinventing comments is something plenty of publishers are trying to do, including Gawker publisher Nick Denton — who tried a membership-based voting model and then more recently abandoned it for something he hopes will turn the site upside down and make comments the most important part of the content, as opposed to the posts from writers and editors.

As Masnick notes in a blog post announcing the new offerings, the site is trying to follow the advice that it often gives to musicians and other artists (copyright and the death of traditional content business models being one of the site’s favorite topics). That advice is to connect with fans, and then give them a reason to buy — so instead of relying on CD sales or record deals, Masnick advises artists to take an approach like independent musician Amanda Palmer did recently, in which she Kickstarter-funded a new album and tour with a campaign that raised over $1 million in a matter of days.

In a lot of ways, what Masnick is offering readers is a similar kind of model, but without the help of Kickstarter. It’s the complete opposite of the approach most traditional media companies take, which is to charge their readers a blanket fee for their content, regardless of what that reader might be interested in. Some publications take a membership-style approach, including magazines like the Economist, and The Guardian — which is adamantly opposed to paywalls — has been experimenting with offering certain features for pay, such as a new “freemium” approach to photos as my paidContent colleague Robert Andrews described in a recent post.

The new CEO of the New York Times may not want to offer Google Hangouts to readers any time soon, but I think there is a lot of value in treating your readers like members of a fan club rather than just a homogenized sea of faceless readers whose only option is to pay a monthly fee. Offerings like Techdirt’s may not generate billions in revenue, but they help to cement the bond between a content producer and his or her fan base — and that can be a very valuable thing indeed.

Post and thumbnail images courtesy of Flickr users Montecruz Foto and Giuseppe Bognanni

  1. they also have a flattr button on their site.

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