Stay on Top of Enterprise Technology Trends
Get updates impacting your industry from our GigaOm Research Community
Everyone likes to point to the New York Times as the model for a news outlet with a successful paywall or online-subscription model, but as the authors of Columbia University’s report on “Post-industrial Journalism” noted last year, there is only one New York Times — just as there is only one Wall Street Journal. The only real lesson that these publishers have to teach other news outlets when it comes to paywalls is: “Too bad you aren’t the New York Times or the Wall Street Journal.”
Among the smaller players, however, some interesting lessons are emerging about what makes a subscription model work. For me at least, one of the most compelling is that your ability to build and maintain a strong connection to your community is crucial — and the example of Holland’s massively successful crowdfunded news site De Correspondent is a case in point.
Just to recap, De Correspondent is a site founded by two former staffers at Holland’s NRC Handelsblad — an offshoot of one of the country’s leading national dailies — who were dissatisfied with their employer’s weak attempts at adapting to the world of online journalism and decided to strike out on their own. They launched a crowdfunding effort that raised an eye-popping $1.7 million, with more than 19,000 signing up for an annual subscription.
Crowdfunding $2 million per year
According to an update in a recent post at Fast Company, the newspaper now has a total of almost 30,000 subscribers who are paying five Euros a month (about $6.84). That means even if it were to stop growing its subscriber base right now, De Correspondent would still be pulling in almost $200,000 every month from subscribers, or more than $2 million every year.
That wouldn’t seem like much if you were running a newsroom the size of the New York Times or Washington Post, of course, but as media analyst Ken Doctor points out in a recent piece at the Nieman Journalism Lab, the costs of a digital-only media startup are substantially lower than they are for established entities — which helps explain why so many people are starting them.
De Correspondent also has a 5-percent profit cap, with the rest of its revenues reinvested into the site, and publisher Ernst-Jan Pfauth said the site is already in the black. “If 40 percent of our members don’t renew in September, we will still survive,” he told Fast Company.
Not just readers, but contributors
One of the key principles behind De Correspondent is that the news outlet and its community of readers are two parts of one thing, not just a seller on one side and a consumer on the other. In a telling detail, the Dutch news outlet doesn’t even refer to its reader comments as “comments,” but instead calls them “contributions” — unlike many news sites, which completely ignore and/or downplay comments or reader feedback. Said co-founder Sebastian Kersten:
“The whole platform, we are building that around the dialogue rather than the monologue that it is usually. You as the journalist are the conversation leader.”
As the Fast Company piece notes, a recent editorial meeting was held in a public cafe at a local cinema museum, and each writer is responsible for hosting one get-together a month where readers can come and learn about a topic and/or interact with other subscribers and journalists. Those kinds of real-world events are an important factor in building a community as well — which helps explain why so many media companies are expanding into running conferences.
The connection to and relationship with readers is further reinforced by the fact that De Correspondent subscribers can subscribe to individual writers, and each writer gets their own area to respond and engage with readers. Beacon, a crowdfunded platform for journalism that launched last year, is pursuing a similar type of approach — readers subscribe to a single writer, but those payments help support the entire stable of authors across a range of subjects.
Readers decide who succeeds and who fails
That connection with readers is also crucial for sites like The Daily Dish, the standalone site launched by former Daily Beast and Atlantic blogger Andrew Sullivan. By the end of last year, the Dish had pulled in close to $800,000 from subscribers — and in a recent update, Sullivan said that he got close to $500,000 worth of renewal income in just the first two weeks of January. The site has 34,000 paying subscribers and is profitable, he told me in a recent interview.
As I tried to point out in a post last year comparing Sullivan with Amanda Palmer, the alternative musician who crowdfunded an album to the tune of over $1 million on Indiegogo, the crucial element of what both are doing is the connection they have built — and work hard to maintain — with their readers and/or fans.
That’s not to say other things don’t help with paywalls, such as having a valuable niche the way that outlets like the Financial Times and The Economist do — and some startups with paywalls that did have relatively strong connections to their community, such as Matter and NSFW, have not succeeded. But without some strong connection to your readers, you will almost inevitably fail.
Post and thumbnail images courtesy of Flickr user Giuseppe Bognanni