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June 7, 2017, 9:21 a.m.
Business Models

Mada Masr, Egypt’s poster child for digital news, begins its foray into a reader-funded model

“Our model is built on our specific offerings, but also the broader context of Egypt, people’s purchasing power, and that of our readers abroad.”

Mada Masr was born in a difficult time. The Cairo-based independent digital news site launched on June 30, 2013, as then-president Mohamed Morsi was overthrown by the Egyptian army. Its founders intended for the publication to provide an alternative and more independent perspective on Egyptian society.

Its journalists have been arrested. Its site was blocked last month in Egypt, along with at least 20 other news websites, for publishing content that the government says “supports terrorism and extremism and deliberately spreads lies.” (Despite the blocking, sites like Mada have continued publishing on various platforms.)

Now Mada is growing up in an unstable time, in the face of resistance. It continues to build its team — currently up to 18 full-time staff and around 16 freelancers — and is learning from its years of experience. Its journalists come from varying backgrounds; most have worked with local or international media in Egypt and in the Arab region.

Mada Masr is largely supported by foundations and philanthropy, with 80 percent of its budget provided by grants and around 20 percent coming through other sources of revenue such as advertising or selling merchandise built off its cartoons and illustrations. Now it’s turning to its readers.

For Mada, the decision to launch a membership program is more than just an attempt to develop revenue streams and sustainability; it’s an attempt to maintain its editorial independence and to build community.

“The membership model is one that is centered on our readers and our community,” Lina Attalah, publisher and cofounder, said. “The idea behind it is to render them a member of the extended Mada family.”

According to Reporters without Borders’ latest World Press Freedom Index, Egypt ranks 161 out of the 180 countries, dropping two places in a year. New legal restrictions require journalists to use official versions of events related to security, while new regulations and licensing requirements are designed to reduce dissenting voices.

Major media outlets are either owned by the government or depend on advertising from companies that align closely with the government. For independent media, any divergence from the official line can lead to financial or political trouble. Bassem Youssef’s popular satirical show Al Bernameg, for instance, was shut down twice in a year because of fears for his safety and pressure from the government.

Mada doesn’t have many regional examples to follow. Brownbook, a regional print magazine based in Dubai, recently launched a membership program that is based closely on a subscription model, which includes copies of the magazine. Mada had looked to membership programs implemented by organizations like the Guardian, but didn’t ultimately model its own after them “due to the difference in context,” according to Attalah.

“We don’t have many similar experiences where people have directly supported news media,” she said. “But this is the culture that we want to cultivate through our experiment.”

Mada’s program includes six tiers of membership, ranging from USD $50 to USD $2,000 a year. On the higher end, some of the products that are packaged with the membership include advertising an individual’s business on the site and editorial services from journalists at Mada Masr. On the lower end, members receive merchandise and a subscription to the daily digest.

“Our model is built on our specific offerings, but also the broader context of Egypt, people’s purchasing power, and that of our readers abroad,” Attalah said. “To start, we are targeting loyal readers, people who consider us a primary resource of information on Egypt. We are also trying to capitalize on the purchasing power of those living aboard, since those living in Egypt have lower purchasing power due to the economic crisis.” (Mada is perhaps better known globally than its peers, because it’s a bilingual operation, publishing in both Arabic and English.)

Reader “loyalty” can be measured in different forms.

“Some loyal friends of Mada don’t read Mada much but when they see something ‘Mada’ [they] will trust it,” Alexandre Goudineau, the audience manager for Mada Masr, said. “Overall, I would say loyalty means having this link of trust, which is an essential goal for any media organization.”

On top of the usual challenges of trying to start a membership program from scratch, Mada will face obstacles unique to the media and financial climate in Egypt. First, simply collecting payments from supporters will be difficult, as legal regulations limit options. Only 20 percent of adults in the Middle East and North Africa region have bank accounts, so simply providing the payment is a logistics operation in itself. Other digital organizations have solved this problem by offering cash collection services (Careem, the local variation of Uber, for instance, allows cash payments to be stored as credit).

Last November, the Egyptian Central Bank devalued the currency to a third of its value. The purchasing power of everyday Egyptians has dropped dramatically.

Mada Masr also operates in a society not used to paying for content — much of the media in the Arab world is supported by advertising or partisan organizations. Breaking the expectation that quality content isn’t free will take time and may prove to be one of Mada’s most difficult obstacles.

Despite the challenges ahead, Mada’s goal is to start with a smaller community of around 50 subscribers by the end of the year, and then try to grow the number exponentially.

The team has experimented with different audience-driven products in the past that have laid the groundwork for understanding what features its readers might want. For example, Mada has been publishing a paid daily email newsletter, where it summarizes the Egyptian press in an easily consumable format.

The Morning Digest is a niche product targeted at a very specific audience. It has a high open rate, as a subscription to it is quite costly, according to Goudineau, with the majority of its audience based in Egypt and around a third based abroad.

A paywall is out of the question, according to Attalah. “It feels counterintuitive for us to put content behind a paywall when we are trying to grow our base of audience and the impact of our journalism.”

In principle, a membership model seems to be the right fit for Mada Masr. Prominent news organizations around the world are developing subscription and membership models to generate revenue, but such a model has yet to be seen in the Arab world. If Mada succeeds in Egypt, it might open the doors for a host of new media organizations to move toward a reader-supported model.

POSTED     June 7, 2017, 9:21 a.m.
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