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Summary:

Many newspapers and media outlets are implementing paywalls in a desperate attempt to generate revenue, but some players — including the political blog network Talking Points Memo — are offering their readers a membership-with-benefits experience instead. It’s an approach that more media players should probably consider.

As should be obvious to anyone who has even glanced at the newspaper business recently, much of the media industry is gripped by paywall fever, with outlets of all kinds trying to recreate the success of a New York Times or Financial Times-style subscription model. But I think there is something more interesting going on in a few places, namely an attempt to create something more like a membership model than a blanket paywall around all of a publication’s content — and one of the more interesting of these recent experiments is the one from Talking Points Memo, the political blog network founded by Josh Marshall. Whether it is a financial success for the site or not remains to be seen, but I think there are a number of reasons why it is worth paying attention to.

As Adrienne LaFrance describes it in a post at the Nieman Journalism Lab, and as Marshall has described it in a series of posts on the site, the new membership program that is launching later this month is called TPM Prime — a nod to Amazon’s Prime, which gives members free shipping and other benefits — and will cost readers $50 per year, or a monthly charge that the site has not yet specified (there is also an innovative option that allows readers to sponsor memberships for others).

Members pay for a deeper relationship, not content

And what do members get for signing up? There are content-related benefits, such as preferential access to a line of TPM Singles — mini e-books that the site plans to publish on a variety of topics — and the signup page mentions future possibilities including discounts on other publications that Talking Points Memo might cut a deal with. But the main benefit of membership is the opportunity to get more involved with the site in other ways, including member-only discussion forums, as well as exclusive live chats and interviews with newsmakers and political influencers.

What’s interesting is how Marshall describes the rationale behind the membership layer, and the reasons why he chose to go that route instead of just putting up a paywall — including the fact that he was uncomfortable with how much the site relied on advertising, instead of using a model that was based on creating a relationship with its readers. As he put it to LaFrance:

“What I noticed is that we didn’t have really strong internal financial incentives focused on our core readers… I didn’t like that we were growing in a way where we didn’t have really clear parts of the bottom line that were tied to servicing that community.”

On the surface at least, this rationale seems like it could be used to defend a paywall just as easily as a membership layer. After all, a paywall or strict subscription approach like that taken by the Financial Times or the NYT also relies on readers for support — to the point where both newspapers have crossed (or are close to crossing) the line where they get more revenue from subscriptions than they do from advertising. Doesn’t that mean paywalled newspapers or media outlets are also tied to servicing their reader community, just like Talking Points Memo?

Membership is special in a way that paywalls are not

In a sense, that’s true. But I would argue there is a crucial difference: a membership layer treats readers as though they are special and gives them added benefits in addition to the regular free news content, while a paywall or traditional subscription simply charges everyone the same amount for the same content. One feels like a duty or an annoyance, and the other feels more like something unique that only those who are really committed to a topic or a site have access to — like a velvet rope instead of a wall. As I’ve written before, I think the idea of offering membership with special benefits, or access to additional content and experiences (such as live events, which The Atlantic and others have built into their model) is a much more appealing — and in many cases, potentially more lucrative — approach than a wall or pay-fence.

Former Washington Post managing editor Raju Narisetti, now at the Wall Street Journal, has talked about what he and author Jeff Jarvis refer to as a “reverse paywall,” where readers get preferential access to content and related offerings. And these kinds of efforts can do more than just generate revenue: by allowing a site like Talking Points Memo to deepen its relationship with readers, it allows Marshall to get to know those readers better, and that knowledge can become a powerful tool in its own right when it comes to advertising and other more traditional revenue-generation methods.

The approach that Marshall is taking is very similar to one that Techdirt, the technology-analysis site run by Mike Masnick, recently expanded — giving readers who join the club access to a host of special benefits including a reader-only discussion forum. And the Talking Points Memo founder said the early response has been encouraging: more than 1,000 people signed up in just the first 10 hours. That may be a drop in the bucket financially-speaking, but it is an impressive sign of reader engagement for a web-only political blog, and it will be interesting to see how TPM builds on that early support.

Post and thumbnail images courtesy of Flickr users Christian Scholz and Giuseppe Bognanni

  1. Greg Golebiewski Thursday, October 4, 2012

    Most likely the TPM readers’ support will level off at around 1% of its casual visitors and create another silo or a “fenced garden” for the most loyal users, as such schemes were called not so long ago.

    What happened to the idea of a broad universal (which not mean free) access to online resources? Are ‘fenced gardens” cool now?

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    1. ‘Fenced gardens’ became cool as soon as people realised that spending millions on content to give away was not a viable business model.

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    2. It may be a fenced garden or VIP approach, Greg, but I don’t think it falls into the same category as a paywall around general news — at least not for me — which I think does raise issues about open access to information. All Josh is selling is access to discussion forums, ebooks and so on. That makes sense to me.

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      1. Didn’t/Hasn’t Salon tried something like this for a long, long time (hell, even its very name suggests clubby insiderism).

        One look at Salon’s publicly available financials (and decade-plus worth of losses) suggests that the “insider access” model isn’t much more lucrative than the advertising-driven one.

        The Left is having a very, very tough time with the democratization of comment (and therefore the huge surge in supply) – they are used to being pretty well paid for having a monopoly on the megaphone, all the while enjoying the warm glow of unchallenged smug self-satisfaction.

        Those days are long since dead.

        They are going to have to get used to it.

        Next up for TPM – “member-only” *dating-service* – associate only with the right-thinking-like-minded-for-a-fee.

        Maybe they can partner up with Ancestry.com to check for the right breeding…(Upper East Side/Boston second or third generation liberals…)

        Sites like TPM are only “paywall agnostic” because,

        1) It is suicide in a content-saturated internet world (NYT’s picket-fence, keep ‘em-in-a-Berlin-of-a-Paywall notwithstanding)

        2) They still have designs upon “influencing” the broader public mind – can’t really do that from behind a paywall.

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  2. Joris Luyendijk Thursday, October 4, 2012

    Great post, very interesting ideas. I worry though about “exclusive live chats and interviews with newsmakers and political influencers”. This can give those newsmakers and political influencers undesirable leverage over a journalist and their organisation.

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    1. That’s a good point, Joris — and something I think Josh Marshall will probably be aware of when he goes in that direction.

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  3. SocraticGadfly Thursday, October 4, 2012

    What’s obvious is that you, like Shirky, Rosen and other new media “gurus,” simply hate paywalls.

    As for Jeff Jarvis? My left butt cheek knows more.Serious, as for any specific ideas me discusses, I’d Google Evgeny Morozov to see if he has some sarcastic takedown, first.

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    1. Thanks, Evgeny.

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  4. SocraticGadfly Thursday, October 4, 2012

    Beyond this, Matt, you’re not thinking broadly enough. One could charge a minimal general rate, plus have a freemium on top of that. Or have a metered paywall, that works like cell phones, with a minimal rate to read anything, rather than the NYT (which is so leaky as to not have a paywall) and start the meter at 0, not 10, 20 or whatever, and then ramp up rates from there. Or to be more creative, to charge more for looking at videos and stuff, take a page directly from cell phones and charge by the time spent on a page.

    Beyond that, the real problem, of course, is that the Associated Press, largely under the leadership of the idiotic Dean Singleton, didn’t have a clue about the Internet and undercharged news aggregators for running AP material.

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  5. David Brauchli Friday, October 5, 2012

    The membership is like paywall with benefits. I don’t see the difference. And I don’t see why gaining access to premium materials isn’t enough to entice the reader to pay, provided of course, the content producer has enough exclusive content to make a consumer justify paying for it. Finally, and I know the pay-wall haters out there (Matt, Shirky, Rosen, Jarvis) will disagree with me, but the pay-walls gannett is putting up are not going down. Press+ recently reported that the average meter which started at 20 and went to 14 is now down to 11 and will be in high single digits next year. Revenue is starting to flow and more sites will install some sort of payment system until the only free news left is national news read from the AP, Bloomberg, Reuters on Yahoo or google.

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    1. “only free news left is national news read from the AP, Bloomberg, Reuters on Yahoo or google.”

      And the ten million bloggers commenting on them.

      And that will be more than enough for 95% of the audience.

      The MSM likes to pretend its content backbone wasn’t wire services – and/or commentary.

      Both of which have now been disintermediated.

      So, the old oligopoly of yore is now left with local high school sports and bake sale announcements.

      They and Patch can battle it out for those pennies.

      The thousands of wire service stringers now (and yet to be) will be more than happen to fill up the paywall-induced vacuum.

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  6. David LaFontaine Friday, October 5, 2012

    “When is a paywall not a paywall?” While erecting a wall around content that the audience can freely access elsewhere is obviously (well, maybe not to the grumbling print curmudgeons, but to anyone with a firm grasp of how the web really works) not a pathway to riches … the membership model is alive and well with the La Reforma chain in Mexico. There, the subscription not only brings the content in the paper, but also access to the insular business community, and entrance to special events. Of course, I wrote about this in a case study for the NAA more than 3 years ago, but sometimes it takes a while for US-centric businesses to realize that foreign media orgs have something to teach them.

    The core lesson that is being consistently overlooked here is that to get people to actually reach down & yank coinage out of their wallets, you have to demonstrate a lot more value than just the same mix of AP wirecopy & thinly rewritten press releases that clog way too many newsholes. Subscriptions sound just like the same thing that audiences are already failing to see the vault in, bundled up online; selling a membership means coming up with a plan to deliver value & actually paying attention to what your readers want. What a concept.

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  7. David LaFontaine Friday, October 5, 2012

    Make that “see the value in.” Also: FYWP for eating the earlier draft of this comment.

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  8. Barry Campbell Saturday, October 6, 2012

    Good thoughts here and definitely worth consideration.

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  9. Great argument for the bundled approach, instead of incremental pricing.

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