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Dec. 10, 2018, 11:34 a.m.
Business Models

What does membership mean for BuzzFeed News — at a company that’s already raised nearly $500 million in venture capital?

Even the most digital-native publishers cannot resist the siren call of a tote bag. But a membership pitch sounds different coming from a public radio station than from a private company with a billion-dollar valuation.

It was a year ago that Jonah Peretti re-gridded BuzzFeed’s strategy, with BuzzFeed News set aside in its own column that would later become its own distinct website.

It would never go behind a paywall, unlike other news organizations “because your ability to access news is important every day” — but after raising half a billion dollars in venture funding, BuzzFeed has now started a quasi-membership program for readers to chip in at $5/month. (And if you pay up front for the year you get a tote bag!)

BuzzFeed, Vox Media, Vice, and even Mic — R.I.P. — are part of the club of publishers born of the digital age, Miracle-Gro’n with VC money, constricted by the standard industry pressures, and now evaluating next moves. But BuzzFeed is, so far, the only one of them that has turned to a more granular, reader-revenue approach. For what it’s worth, that wasn’t expressly included in the plan last year:

BuzzFeed is expected to hit $300 million in revenues this year, after missing its $350 million target last year by about $90 million. Membership, which just kicked off last month after an open appeal to followers earlier this year, is one of the threads BuzzFeed is trying to weave together, with a Netflix series following their reporting process, a weekday Twitter live show, and a Facebook Watch interview series; affiliate links in a Wirecutter-like setup (something The New York Times has also relied on in its own diversification strategy); and running traditional banner ads, among others.

“It’s no secret that this has been a really turbulent environment for all our colleagues across the industry,” Shani Hilton, BuzzFeed News’s vice president of news and programming, said. “One of the things we’re doing this year is thinking more rationally about how to make decisions that support projects.”

Those decisions included cutting the podcast squad in September and laying off 100 business and U.K. editorial staffers at the end of 2017. In our conversation, Hilton highlighted how vital it was for the shows to have that on-ramp funding from Netflix, Twitter, and Facebook — “the shows all pay for themselves” — but we’ve seen how that can end, with Mic’s death spiral prompted by losing its Facebook Watch funding, for example. And this isn’t (yet?) a decision as much as a pipe dream, but Peretti has floated the idea of merging with other digital-born publishers, like Vox Media and Vice themselves.

(Peretti has dismissed the need for a union at BuzzFeed, hence the *ahem*.)

Membership may be a new decision for a major VC-funded company, but this hefty database lists 47 for-profit news organizations and 35 news nonprofits with membership components.

BuzzFeed News has always had to overcome the reader perception of cat-quizzes-and-fidget-spinners BuzzFeed, and that delineation is more urgent in its membership drive. (Though who knows, maybe BuzzFeed quizzers would be more inclined to become members.) In a 2014 interview here at the Nieman Foundation, Hilton was still in the process of figuring out how news at something like BuzzFeed would work.

Our biggest news story might have 1.5 million views, which is a lot of people, but it’s a fraction of the biggest entertainment story that we have ever done, which was a quiz about which state should you actually live in. That had 45 million people or something crazy like that…We have a page that’s which has all of our news content, but 12 people go to that a day. We might eventually launch it as its own thing, but we haven’t yet.

Since branching out as its own, separately branded website this summer, has seen an increase of 30 percent in monthly average unique viewership, BuzzFeed says. That translates to 35 million unique visitors per month and 230 million monthly content views for BuzzFeed News, meaning the total traffic from News posts on the site and videos on Facebook, Twitter, Apple News, YouTube, and Instagram. (There’s still no search on the site because it wasn’t a highly used feature for news content, I’m told.)

The membership numbers, though, are still unclear; BuzzFeed News spokesperson Katie Rayford told me the chip-in campaign has brought in “tens of thousands of revenue” with an average donation of over $20. Little napkin math says that, if the sum raised is, say, $15,000 (could be much more or less, but we’re operating on generalizations here), that would be something like 750 individual donors, a small fraction of their readership. (There are only two tiers of membership — one at $5/month and one at $100/upfront for a year, which comes with that tote bag!).

And what does membership at BuzzFeed News mean? Subscriptions, memberships, donations, etc. can get incorrectly schlumped under one big reader-revenue umbrella in industry-speak — and yes, they are different.

“For us, it’s a way to have our loyal audience play a bigger role in our journalism. We are very committed to doing original reporting and taking big swings, covering stories other outlets aren’t, and we know that’s expensive, time consuming work,” said Roxanne Emadi, BuzzFeed News’s head of audience development.

“Our members are passionate about the storylines we’re covering,” she said. “We want it to be a two-way street. We’re taking their feedback and we’re going to be sharing first access to maybe some new projects or in some situations to be beta testers for new initiatives. Their financial support for our journalism allows them to see what they’re passionate about [reported on] in the world.”

Some members have mentioned specific journalists as their motivation, like Craig Silverman and Jane Lytvynenko’s work on disinformation and debunking and Julia Reinstein’s reporting on the Squirrel Hill synagogue shooting, Emadi said. BuzzFeed News’s audience is 69 percent female and 43 percent ~~millennial~~ , but Emadi wouldn’t share any more specifics on if or how they’re targeting a distinctive slice of its audience for memberships.

Members also convert from BuzzFeed News’s newsletter collection, another lifeline publishers are leaning on this year.

One of the newest additions is the BuzzFeed Book Club newsletter, with more than 7,000 subscribers and an open rate of 50 percent. (The more general BuzzFeed Books newsletter has 140,000 subscribers.) It’s part of that book club so prominently mentioned in Peretti’s strategy grid, which kicked off in October and has a companion Facebook group too. BuzzFeed News already had a books section but with this has officially joined the train of other publishers enmeshed in books coverage.

The flagship BuzzFeed News newsletter has doubled its subscribers since a relaunch this year, and individual journalists have also fired off their own branded newsletters like Silverman and Lytvynenko, Charlie Warzel, and Alex Kantrowitz. Flagship newsletter writer Elamin Abdelmahmoud’s sendoffs have gotten attention (and side-eyes from BuzzFeeders toward alleged copycats) for their motivational messages, which the journalism industry could probably take to heart.

“Don’t rush your brain today — trust yourself and slow down.” (You can buy an official BuzzFeed News t-shirt with that if you want. $19.99, available in black, dark heather, and heather grey.)

POSTED     Dec. 10, 2018, 11:34 a.m.
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