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Nov. 30, 2016, 11:26 a.m.

The Tulsa Frontier is ditching its pricey paywall and becoming a nonprofit as it attempts to grow

The Oklahoma-based investigative site had about 750 subscribers paying $30 a month.

The Tulsa Frontier launched in 2015 in an attempt to take a different approach to local news. The Oklahoma investigative news site was a for-profit outlet behind a paywall, with subscriptions costing $30 a month.

On Tuesday, however, the site said it was shifting away from that model by dropping its paywall and transitioning to a nonprofit.

The Frontier had about 750 subscribers paying $30 per month and “a couple dozen” others who paid for $1,000 annually for higher-tiered subscriptions to support the site, publisher Robert E. Lorton III said. The site’s goal was to get to 1,000 subscribers in its first year.

“We didn’t quite get to 1,000,” Lorton, who goes by Bobby, said. “At 1,000, I would’ve been adding more staff.”

Its other sources of revenue were corporate sponsorships and individual article purchases — readers who didn’t subscribe could buy single articles for $5 each, and Lorton said there were about 1,000 individual articles bought.

That resulted in total annual revenue of about $350,000, which was enough to support the Frontier’s staff of four journalists, but not enough to enable the site to grow. About 90 percent of the site’s income went to paying the reporters.

Lorton said he’d like to raise between $500,000 and $1 million with the goal of adding reporters to focus on specific beats, such as healthcare, and would like to expand the Frontier to cover other areas of Oklahoma beyond Tulsa.

“As much time as I was spending hustling new members at $30 a month, or at whatever package I was trying to sell them, there was definitely more money out there as a nonprofit,” Lorton said. “The foundation community in Tulsa is pretty robust, but they couldn’t give to us as a for-profit. My goal wasn’t to get there and break even. I could have kept the paywall up and continued where we are, but our feedback from the marketplace was that more people wanted to read this but having a membership wall was always going to be a barrier. I wanted to see how much the market could bear. I could’ve probably continued to build the numbers, and at some point, we would’ve probably passed the 1,000-member barrier, but then what’s next? It got to the point where that same person I was trying to hustle for a membership probably would’ve written me a check for $1,000, tax deductible, much quicker — or I probably could’ve raised much more from that individual. So why am I fighting this uphill battle?”

Local news organizations across the United States are continuing to struggle as print advertising dollars disappear and circulation shrivels up. Eighty percent of U.S. newspapers with a circulation over 500,000 now have paywalls, according to an American Press Institute study, though most are not as strict as the Frontier’s was.

Still, publishers have struggled to attract a sustainable number subscribers willing to pay a premium for local news.

Perhaps the closest analogue to The Frontier is Honolulu Civil Beat, the Hawaii news site founded by Pierre Omidyar. It launched in 2010 as a for-profit site with $19.99 monthly subscriptions. Civil Beat subsequently lowered its price several times and changed its paywall structure.

In June, the site said it was becoming a nonprofit and ditching its paywall. Civil Beat editor and general manager Patti Epler told me at the time that the site’s readership was already paying for news from other sources such as The New York Times and The Economist.

“It seemed like with so many different things for them to choose from, we were just one more,” Epler said.

For the Frontier, Lorton said he’d ultimately like 40 percent of the site’s support to come from foundations, 40 percent from corporate donations, and 20 percent from individuals. Lorton said local nonprofits and businesses have already expressed interest in supporting the Frontier. The site is accepting donations through the Tulsa Community Foundation until it gets full approval to become a nonprofit from the IRS.

The Frontier publicly announced the change on Tuesday morning, and by the time we spoke that afternoon, Lorton said about 40 people who had previously subscribed to the site had signed up to be donors to the nonprofit. And Lorton said he’s hopeful that the new nonprofit site will be able to attract members who didn’t want to pay $30 a month or who want to only make a one-time contribution.

Lorton’s family used to own The Tulsa World before it sold the paper to Warren Buffett’s BH Media Group in 2013, and he said he plans to use his network in Tulsa to go after donors. He also plans to hire a grant writer to help grow the business side of the operation.

“For most of my sponsors, these were gifts,” Lorton said. “They were not tax deductible and there was no advertising either. It was truly a gift. You could only lean on that for so long. Obviously, a lot of these groups are looking for ways to find deductions that they feel good about.”

Lorton himself has handled all of the site’s business operations — everything from dealing with sponsors to helping subscribers who had trouble logging into the site. “Someone would call me and say, ‘Hey, can you send me to your person who handles the credit cards?’ and I was like, ‘Well you’re talking to him,'” Lorton said.

The shoestring nature of the operation also dissuaded Lorton from lowering the price of a membership or trying to substantially grow the subscriber base because the costs would have likely outweighed the benefits.

“If we were charging $10 a month, would we have had more members? Yeah, we would’ve had more members, but I would definitely have had to hire somebody to handle the operational issues like credit cards and ‘forgot my password.'”

Ultimately, though, as the Frontier becomes a nonprofit, the site is optimistic that its coverage will have greater reach without a paywall and be able to impact the community more. He said he’s looking to The Texas Tribune, which has built a successful nonprofit operation covering Texas politics around events, as a potential model for success.

Still, Lorton insists that he doesn’t see The Frontier as a replacement for local newspapers.

“What we do is not going to replace what a newspaper does,” Lorton said. “You couldn’t start a nonprofit sports site. What we’re trying to do is just become the best at what we do by hiring the best journalists around in the community. There are still really good investigative writers out there that want to write. The hard part is: Can they make a living doing it?”

Photo of Tulsa’s Golden Driller statue by jk42683 used under a Creative Commons license.

POSTED     Nov. 30, 2016, 11:26 a.m.
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