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Newsonomics: As McClatchy teeters, a new set of money men enters the news industry spotlight
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Aug. 2, 2010, 10 a.m.

The Newsonomics of membership, part 2

[Each week, our friend Ken Doctor — author of Newsonomics and longtime watcher of the business side of digital news — writes about the economics of the news business for the Lab.]

New news organizations have embraced the membership model (see part 1 of The Newsonomics of membership), but they don’t have to reinvent the wheel to do it. They can hone that wheel, for the digital-only and digital-first age. One of the best places to gain insight is in public radio, which has been plying the membership trade for more than 40 years now — learning the dos and don’ts and sharing some best practices internally.

As city sites begin to build on what MinnPost, Texas Tribune, and GlobalPost have started, they can certainly apply some of those lessons. I made an initial, unscientific foray into NPR membership, to feel the ground and see what’s shaking. I think at this point, pending much deeper study, we can see both some metrics and some lessons that have useful applications.

The Metrics

As I noted in my first membership post, there are at least three key metrics for new websites to master as they move forward:

  • What percentage of which part of the readership can news sites expect to contribute?
  • What’s the median gift?
  • How much of their going-forward budgets — and if and when foundation money dries up — can be made up by readers?

NPR station experience helps inform those metrics.

Percentage of listeners who become members: There is no single number to cite, but most reports come in at somewhere between 6 and 12 percent, though it’s clear that counting methodology is not consistent across the nation. KUT, Austin’s public radio station, is part of a group of eight like-sized stations which collectively pool their membership data. Those eight sign up 5.8 percent of listeners, Holly Gaete, KUT’s director of membership, told me. “Listeners” are those who listen for at least five minutes per week. KUT currently counts 17,338 contributors.

Oregon Public Broadcasting says it gets about 10 percent of its public TV viewers to become members, but has no similar data for the radio; that’s one of the nuances of counting, as a number of dual-license stations (public TV and public radio under one umbrella) complicate any apples-to-apples comparisons.

A few people make the point that it’s long-time listeners — those who’ve listened for two years or more — that make up the best universe of potential public radio members. That notion (akin to MinnPost’s Joel Kramer’s notion that frequent visitors offer greater potential than infrequent ones) makes sense, but is apparently not something widely measured in public radio.

What brings them in?: KUT’s Gaete makes the point that membership directors use diverse tools to gain members. Here’s her breakdown:

Radio pitches (those twice-yearly pledge drives): 37 percent
Mail: 36 percent
Web: 18 percent
Telesales: 5 percent
Other: 4 percent

Stewart Vanderwilt, KUT’s general manager, differentiates between those who make “intellectual” decisions to give — responding to mail, for instance — from those who make an “emotional” decision, often responding to an on-air appeal. The intellectual decision-makers’ average gift is higher, and they renew at a higher rate. KUT’s overall renewal rate is 58 percent.

The sweet spot of giving: Again, counting standards differ, but it’s the $50-$150 range that draws a majority of gifts. The buck-a-week or 10-bucks-a-month pitch seems to have resonance with donors, with some making the point that “that’s cheaper than the daily newspaper.”

What’s the trend line?: Interestingly, the recession’s not done a great deal of damage to membership, at least not as much as we’ve seen circulation fall at dailies. Some stations report membership mildly down, but giving flat or up a tad. Others report membership even up a little, but giving down. Stations’ recent membership performance may indicate a couple of things: Long-term relationships may help weather bad economic periods, and listeners understand the increasing role of public radio in filling the news vacuum.

How important is membership giving?: KQED‘s Scott Walton, executive director of communications, reports that membership tops 200,000 — and accounts for 60 percent of the stations’ $55 million budget. Oregon Public Broadcasting — its number of contributors up two percent over the last year — counts 120,000 members, which account for 64 percent of its budget.

The Lessons

Beware the power of the barker. Bill Buzenberg, now director of the Center for Public Integrity, used to serve as vice president of news for National Public Radio. He’s in a unique position to observe membership, given that background. As he compares online news startups with public radio, he notes one big distinction that will affect membership sign-ups.

“The difference is that public radio has a ‘barker channel,’ meaning they have the radio megaphone to get people to come into the tent or become members in the first place during membership drives in which they can withhold the programming,” he says. “That barker channel is great for public radio and drives up the membership numbers, even if listeners hate the membership drives. MinnPost, or other non-profit centers, have no barker channel.”

If barking helps, just talking to potential donors — and current ones — about the deep journalism crisis, especially the local one, helps too. Donors feel an obvious kinship with the stations — maybe akin to a loyalty newspaper subscribers have traditionally felt. Or perhaps, the notion of voluntary donation itself creates a reinforced relationship, more so than a fee-for-service “subscription.” That’s a key question as we see membership pushes for online media ramp up just as paywalls are increasingly erected by legacy news companies.

“People have the tangible sense that journalism is troubled,” reports Oregon Public Broadcasting CEO Steve Bass, who says he hears that from donors, as newspapers from The Oregonian to smaller dailies cut back on coverage.

Borrowing lessons from public radio isn’t easy. Metrics within public radio vary and are not freely available. In addition, we’re in the early stages of thinking about what’s different and what’s similar between public radio and online news sites. Further collaboration here — maybe abetted by such groups as the Knight Foundation — could be a win/win, though potential competition as we see developing in the Twin Cities (MPR, MinnPost) could be an issue.

Finally, as member-based sites ramp up — or, in the case of public radio, morph into digital-first news producers — one curious question will be the the advertising value of these members. Membership and ads need not be two separate universes. In fact, member data — how they read, what they read, what they buy, where they are — can greatly help the targeting of ads. That could make members even more lucrative than readers, and listeners, overall.

POSTED     Aug. 2, 2010, 10 a.m.
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