Encouraging mass readership within a niche coverage area is at the heart of Talking Points Memo’s ad-supported business model.
So when founding publisher/editor Josh Marshall began to assess the best ways to diversify the site’s revenue stream, he had to think about the subgroups within that already refined audience.
First things first: Not everyone is going to pay for a subscription. And Marshall didn’t want to put TPM behind a paywall anyway. What he wanted was to find people who would be willing to spend money on TPM so that it could expand in ways tailored to serve those paying customers.
Enter TPM Prime, a membership/subscription service that launches on Oct. 15. For $50 per year — or an as-yet-unannounced month-to-month rate that would wind up being more expensive per year — subscribers will pay for “backstage pass” access to TPM staffers, newsmakers, and one another.
The membership is more about the community of people involved than exclusive content. So whereas Politico Pro produces super-insidery coverage that you won’t see on the core site, TPM is keeping its coverage paywall-free and instead building a premium service around the people who read it.
“We want to be totally upfront: We’re trying to build as big a revenue base as we can.”
TPM Prime perks include invites to live chats with reporters and political figures, a members-only commenting forum, and downloading rights to about half a dozen ad-free mini-ebooks called TPM Singles. TPM Singles will clock in around 10,000 words apiece, and represent the site’s first foray into longform journalism. (Those who aren’t Prime subscribers will be able to pay to download individual singles.)
“For ages, I have felt most books about politics and news are basically a couple of chapters long, but we’ve got this thing called ‘the book’ where it has to be 150 pages or there’s no business model to sell it,” Marshall told me. “Over many years, we’ve made a speciality out of tracking the whole issue of voter fraud and voter suppression. We can now, if we choose to, do a definitive mini-book on what happened in the 2012 cycle. If we put those 20,000 words on the front page of TPM, maybe it would get 5,000 views. It’s way too much of an investment of time in revenue terms, because it has to live or die on the pageview model.”
(Marshall wouldn’t reveal which topics TPM Singles would explore, calling the voter fraud example “hypothetical.” The two ebooks now in the works “will become relevant immediately after the election,” he said.)
The editorial shift that can come with getting past pageviews — that is, a 100-percent-ad-supported model — is as important as what it does for the bottom line. In other words, diversifying revenue isn’t just key to survival; it also affects day-to-day operations: how to cover something, the extent to which you can focus on boosting the quality of commenting, improving user experience, and so on.
“Our money comes from advertising, so that is inevitably an overwhelming priority for us, because that’s how we pay the bills,” Marshall said. “You create a set of incentives internally to cater to advertising. I’m proud to say we have really been as pure as the driven snow on the important things. We don’t fiddle with things to suit advertisers. But internally you do put a lot of resources into selling ads. It’s simple as that. What I noticed is that we didn’t have really strong internal financial incentives focused on our core readers.”
And TPM’s core readers — Marshall estimates tens or hundreds of thousands have a regular TPM habit — are a huge part of what shapes the site’s identity. “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,” Marshall said. (He tweeted that in the first 10 hours after TPM Prime opened membership, more than 1,000 had signed up.)
Marshall says he’s been thinking for a couple of years about the right way to embark on TPM Prime. One of the things that kept nagging at him was how much to charge.
TPM’s readership is “very affluent” relative to the general population, and friends in the publishing industry told Marshall that $50 per year was too low. Some said he should charge $100, even $200. On the flip side, Marshall didn’t want to alienate those core readers who might struggle to pay $50. The solution he came up with, perhaps taking a cue from Radiohead: Sell memberships for $50, but suggest members can pay as much as they want (in increments of $50) to sponsor readers who don’t have the cash. The win-win is that more readers get access and — more importantly — TPM gets more money.
“We’re not presenting this as ‘You need to give more money for the starving TPM readers in Africa,’” Marshall said. “We want to be totally upfront: We’re trying to build as big a revenue base as we can. This seemed to be a way that fit with those needs for us.”
As for how TPM will determine eligibility for freebie membership: No tax returns necessary, Marshall says. TPM is still working out the infrastructure for these kinds of memberships but the site will probably just ask for proof of student or senior status, for example, in cases where readers claim they have a low fixed-income or could otherwise use a Prime handout.
Marshall’s goal is to get about 10,000 subscribers in the first year-plus. In the immediate future, he is hoping to get enough early members to be able to hire one full-time staffer devoted to Prime.
Depending on how many subscribers the premium service gets in the longer term, there are other deep-dive forms of journalism Marshall wants to explore. (Data journalism is one example.) Come 2013, TPM is expanding its core site with new verticals — he’s thinking about business, technology, and telecommunications — and plans to hire in its Washington, D.C., newsroom.
“I like being involved in innovative journalism and innovative publishing,” Marshall said. “There are things that we have not been able to do in our current model that we will be able to do now. I’m excited.”