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Oct. 9, 2018, 8:30 a.m.
Business Models

Stat, with subscriptions nearing 50 percent of revenue, looks to big companies for more members

“We’ve become focused a little more on the paying subscribers.”

Is man flu real? Is jet lag worse when you’re traveling east? Does smoking pot make you stupid?

These are interesting questions, all of which appeared at one point in “Gut Check,” a column from health/medicine/life science site Stat. The column aimed to go “beyond the headlines to make sense of scientific claims.” But the last Gut Check column ran on December 20, 2017.

“We cut it because we felt as if it was verging on WebMD a little too much,” said Rick Berke, Stat’s executive editor. “We needed to sharpen who our audience was, and that [column] felt a little too general…We’ve become focused a little more on the paying subscribers.”

Nearly three years in, the audience for Stat — and its premium membership product, the $299/year (or $35/month) Stat Plus — is becoming more clear. It turns out, not surprisingly, that most of the people who want to read and pay for Stat Plus are professionals in the biotech and pharmaceutical industries. Stat is seeing substantial growth in group subscriptions, adding staff on the business side to handle them (while the size of its editorial staff has been roughly flat since launch). About half of the content on the site on any given day is free, but for the most part, the people who are interested in it already have some kind of professional connection to the health industry — and are either able to pay for Stat’s content individually, or work for a company that pays for it for them. Subscribers also get access to live events, webinars, and online chats.

Stat wouldn’t share exactly how many paying subscribers it has, but Berke said the figure is in the thousands. “We are way ahead of our goal to get 10,000 subscriptions in the first three years — not meaning that we’re there yet, but that we’re way ahead of where we thought we’d be getting,” he said. (Recall that while Stat is almost 3, Stat Plus is a year younger, so it still has some time to hit that 10K goal.) About 100 of those subscriptions are for groups. Stat’s revenue in 2017 was 70 percent advertising, 30 percent subscription; now, it’s 57 percent advertising, 43 percent subscription. About two-thirds of the subscriptions are annual commitments. “It’s nice to get the money up front for a business like this, and it shows a certain commitment,” Berke said.

The group subscriptions are for as few as six people to much larger companies, universities, government groups, and nonprofits. Angus Macaulay, Stat’s chief revenue officer, didn’t offer a pricing breakdown but said the larger licensing fees are in the range of thousands of dollars. Stat recently closed a deal with a German company that will provide a group subscription to 25,000 people. “We didn’t solicit them, they just came to us,” Berke said. (About a quarter of Stat’s readership is international.)

Stat has to strike a balance between providing niche coverage for professionals, and appealing to a large enough audience that it can get attention and find new subscribers. The biggest conversion point is Stat’s nine free email newsletters. Search has also grown as a referral.

The Boston Globe is another place where readers can learn about Stat stories. Stat is owned by John W. Henry, the Globe’s owner; while the two companies are separate, Stat still runs out of the Globe’s offices, and the Globe can run Stat stories whenever it wants to. (In the past, for instance, it’s run a Sunday Stat print excerpt.) Last month, shortly after Senator John McCain died of glioblastoma, Stat published a story about a father of three suffering from the same condition. The Globe also ran the story, which totaled more than 4,000 words. Letters from readers poured in, Berke said, including one from Massachusetts governor Charlie Baker.

“I’d like to think that a lot of the work we do is not just business-oriented, and is intended to reach a larger audience, but our business strategy is founded on Plus,” Berke said. In the coming year, Stat will focus more deeply on topics like biotech in China (it just hired a Chinese correspondent), gene-editing, and drug pricing. “But we wouldn’t have the reputation for our Plus stories and our subscribers if we weren’t known for the more ambitious, broader stories,” Berke said.

Still, the company has been discussing a more expensive, even more niche product to launch sometime in 2019. Stat Plus Plus (which will not be its actual name) might go deeper into certain subject areas or offer more robust events.

“You’re going to see continued enlargement of the enterprise,” Berke said.

Photo by Jesse Orico on Unsplash.

POSTED     Oct. 9, 2018, 8:30 a.m.
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