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June 23, 2015, 10:19 a.m.
Business Models
LINK:  ➚   |   Posted by: Madeline Welsh   |   June 23, 2015

Yesterday marked a big shift for Pando: The “fiercely independent” tech site is moving to a membership/subscriber model and is hoping at least 5,000 readers — preferably more! — will be willing to spend $10 dollars a month for it. Editor-in-chief Sarah Lacy and editorial director Paul Carr took to the site to make a joint announcement:

From today, the newest articles on Pando will be available to members first. Membership costs just $10 a month (or $100 a year, if you pay upfront) and members also get unlimited access to our entire video archive and to our real world events, in person and via livestream. We’ll be rolling out a whole bunch more member features over the coming weeks.

Interestingly, Pando will allow members to “unlock” links that they share via their own social media in 48-hour window blocks. It’s a feature, Carr says, that originated on his earlier site NSFWCORP, which Pando acquired in 2013. “We wanted to allow members to decide how much and what gets unlocked — like a members club — rather then us arbitrarily deciding. They should be entitled to say who can read what and how much.”

The new model is part of a full site redesign, including a migration to a custom platform that Carr says was designed by the same people behind the NSFWCORP site:

To coincide with our new membership model, we’ve spent months redesigning Pando from the ground up, including moving away from WordPress VIP to our own in-house CMS. For your security, all pages are now served via https by default. We’ve also moved to a daily publishing model — with the bulk of the day’s stories published each morning at 9am pacific. To make things even more efficient, members will receive an email every morning containing summaries of all the top stories.

The shift in membership models comes out of lessons learned:

When Pando acquired NSFWCORP in late 2013, we inherited not just a fully-functioning subscription CMS but also a deep understanding of the benefits (and risks) of reader-supported journalism. As NSFWCORP discovered, hiding content behind a (ugh) paywall makes it harder for readers to discover your journalism, and easier for critics to dismiss it.

But making everything free to everyone all the time has its risks too — namely an over-reliance on advertising dollars, or on revenue from conferences and events.

The tech reporting world has seen a few examples of subscription-based sites gaining traction recently. Jessica Lessin’s The Information offers Valley scoops and exclusives for $39 a month or $399 a year; Ben Thompson’s solo site Stratechery charges $10 a month/$100 a year for industry analysis. As with those sites, Pando’s new approach puts more of the burden on readers rather than advertisers — a reasonable choice, given the difficulties some tech sites have had achieving advertising-friendly scale of late.

“There is a certain type of journalism Pando does, that is, we are somewhat combative and that is something [readers] come for again and again,” Carr told me. “At the same time, there are certain advertisers that say, ‘Why would I give you my money when you’re attacking me?’ We’re an advocate for readers, not advertisers. The new model comes from looking at how do we fix this weird situation? It’s a correction to reflect what we do everyday.”

Pando reports that it “doubled revenue from the previous year and it was up another 40% in the first quarter of this year,” though it didn’t say what sort of a base those increases built off.

For now, Lacy and Carr say they’re hoping to reach 5,000 paying members by the end of the year, which would nearly cover the site’s newsroom costs; events and other associated costs will continue to be covered by advertising. For those doing back-of the-napkin calculations, that’s $500,000 to $600,000: “It’s an amount where we feel safe,” Carr said.

Another way the membership model could change Pando? Expect a shift away from quick-turn stories as Pando expects to be less dependent on pageviews:

Moving to a reader-supported model has other advantages. With more readers paying for our journalism directly, we’re even less dependent on pageviews than we were before. We’ve long understood that there were two types of article on Pando: The ones you absolutely couldn’t find anywhere else, and the ones you possibly could. It’s the first kind that, for good or ill, have built Pando’s reputation. These are the articles in which, to quote John Gruber, we “Pando the hell out of a story.” Uber, Secret, the Techtopus — regular readers know the hall of fame…The second type of piece — day-to-day product launches and industry news briefs — are, frankly, done better by other publications. You’ll see far fewer — if any — of those in the new Pando. You’ll also see slightly fewer stories overall, as we focus on deeper reporting.

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