Subscriptions, Memberships or Donations: What’s Best for Your Site?
A Reuter’s survey asked 200 digital newsroom leaders what their main revenue focus for 2019 will be. 52% of respondents said subscriptions, while only 27% said display ads. This so-called “pivot to paid” is one of the current key trends in digital publishing, and shows no signs of slowing.
Since the turn of the century, the media landscape has been rewritten both in terms of delivery (print to digital) and how organizations create revenue. Where advertising once dominated, subscriptions have seen a resurgence.
In 2017 alone, The New York Times gained 130,000 subscribers in November and the WSJ’s subscriptions were up 300%.
New entrepreneurial publishers are emerging and taking on the opportunities and challenges of the new landscape. Website and app owners should reflect on different methods to develop an engaged subscriber base and loyal following, and to grow revenue.
This article is going to look at three different revenue models and how they work alone, and can be combined or deployed over time, to create value for your audience.
This especially applies to news publishers, local news sites, and niche content blogs.
We’ll also point to preferred WordPress plugins to efficiently achieve these business models without the resources that major publishers like The New York Times, CNN, or The Guardian have available.
MobiLoud News lets you build native iOS and Android apps from your WordPress magazine or news site in just days. It’s perfect for publishers and site owners that want the benefits of mobile apps (higher engagement, loyalty, traffic and revenue), without the typical investment of native app development. The platform is fully customizable and proven on the market by hundreds of publishers including Foreign Policy Magazine and Business Insider NL.
Content syncs automatically from your site. The MobiLoud team takes care of all customization, building, publishing and maintenance of your apps. Get a free a demo to get started.
The subscription revenue model calls back to the era of print newspapers and magazines, but has of course been updated to the digital world of mixed media, apps and websites, podcasts, webinars and streaming content.
What is a subscription model?
A subscription model requires your audience to pay to access your content. The New York Times and the Financial Times are two strong examples of publishers with a subscription model in place.
If you can succeed in retaining your subscribers year over year, revenue can rapidly begin to stack, allowing you to invest in more content and drive further engagement.
Subscriptions also allow site and app owners to move away from advertising, which everyone appreciates.
“Based on a global survey of 200 digital newsroom leaders, when asked what their main revenue focus would be in the year ahead, 52% of respondents said subscriptions while only 27% said display ads.”
– The Reuters Institute for the Study of Journalism 2019 Trends and Predictions report
Before anything else, high quality content is what matters. Nobody’s going to subscribe to something they don’t value.
So you need content users want and will pay to access. You might be surprised how truly niche paid content has become and what will inspire site or app users to pull out their credit cards or Bitcoin.
The key is differentiation – that is, what do you offer that nobody else does? To develop this kind of offer you need to be constantly testing and validating ideas, and gathering as much feedback and data as possible from your audience.
Jessica Lessin of tech news site the Information, quoted in the New York Times:
“People thought no one would pay for news, especially tech news. The problem was the news business hadn’t been focused on a key question: How do I deliver a differentiated product that people would pay for?”
The Information, a niche tech media company, has 4,000 subscribers paying $399 per year. That’s about $1.6 million in gross annual revenue.
Clearly there’s room for small players to create sustainable businesses based on niche content.
Whatever your revenue model, a responsive website is more or less essential, and WordPress is an excellent and sustainable, open-source platform to rapidly achieve this.
Powerful WordPress plugins such as WooCommerce Subscriptions, Memberpress, Restrict Content Pro, LearnDash and Groups Subscriptions, combined with payment gateways such as PayPal or Stripe, make it easy to accept recurring payments and set content behind a subscription paywall once an audience has been developed.
You can also use MobiLoud News to convert your WordPress site into a mobile app, incorporating in-app subscriptions (or advertising) and providing a cross-platform experience.
Benefits to a subscription app approach include:
- Loyal users and a stable cash flow.
- Reduced friction, making subscriptions easy to manage for users with just few taps on their mobile devices.
- The ability to offer a free trial to allow users to sample content before subscribing.
Apple and Google both support subscription apps and incentivize them by lowering their cut of revenue.
In 2016 Google lowered their cut on subscription revenue to 15%, and Apple changed their own cut to 30% on the first year of a subscription, after which it goes down to to 15%.
The market for app subscriptions is only growing.
“In 2018, mobile subscription app engagement globally, as measured by the conversation rates of people installing and eventually paying subscriptions for apps, has grown 32 percent compared to 2017.”
– BGR, 2018
In addition to subscription websites and mobile apps, site and app owners can also grow engagement through a mailing list.
Consider the case of Substack’s successful newsletter subscription model, which has over 11,000 people paying an average of $80 a year for newsletters across interests: politics, humor and women’s outdoor gear.
There is nothing too niche. Niche news sites can take off on any topic if your content is high quality and you’re able to connect with an audience.
Another example is how Ben Thompson built a sustainable publishing business with a blog and subscriptions for premium content, writing about technology and business strategy.
From Recode: “Thompson announced that he had 1,000 subscribers [at $100 per year]… implying he was already at a $100,000+ annual run rate several years ago.”
In the subscription model, growing an email list is important. Again this takes us back to the use of WordPress, with which it’s easy to begin to build a mailing list, integrating with a system such as MailChimp. Mailchimp offers a WordPress plugin here, which is easy to use.
It’s important not to assume subscribers will stay subscribed without feeling their subscription is worth it. Even companies like The New York Times know the importance of retaining your subscribed users.
Ben Cotton, who claims in this NiemanLab interview:
“My team believes that by investing in the subscribers we have and making the subscription experience better and better, we’ll be able to help all parts of the subscription business. We’ll both improve retention on the subscribers we have — which is our primary goal — and we’ll create more opportunities for the rest of the company to attract new subscribers, because they’ll see more and more things they can only get if they decide to become a subscriber.”
If you pursue a subscription model, remember to focus on retention (not just acquisition) and making your audience glad they’re subscribed.
Building a strong community and listening to your audience is key, along with continuously providing unique value to their lives.
Bottom line: combining high quality paywalled content with a subscribers’ only mailing list, in addition to a mobile app, will allow you to engage users across their devices and remain front and centre through fresh content, email list and push notifications to their mobile devices.
Adjacent to the subscription model is a membership model.
What is a membership model?
A membership model promotes more engagement than a subscription model, and means there will be two-way communication between the content publisher, and their audience.
The Guardian is a publication who focuses on their membership model, and encourage dialogue between their journalists and their readers.
The distinction between subscriptions and memberships can be blurry.
But the key difference between subscription and membership is subscription can be reduced to a transactional, straight forward value exchange, whereas membership implies a more active participation and deeper connection between publisher and audience.
Another element of memberships is that usually, the member will have access to a wider variety of products and services, and more of a give and take between the user and the provider.
Amazon Prime, for example, is framed as a “membership,” with a variety of benefits ranging from free shipping to streaming content and so forth.
Similar to the subscription model, WordPress can be used to manage user memberships. See this article for a review of five popular, and simple to use, membership plugins. Again these allow you to quickly put content behind a paywall.
Membership can be a powerful thing. For news organizations, membership tiers can be combined with subscriptions and donations to give users increased access to and interaction with the organizations.
“A membership model invites audiences to give their time, money, connections, professional expertise, ideas, and other non-financial contributions to support organizations they believe in.”
The authors of this Poynter article describe a “thick” membership model used by various news outlets:
“Membership in its ‘thick’ version represents two-way knowledge exchange between staff and members. By knowledge exchange we mean examples like ProPublica’s readers tipping off an investigation into IBM layoffs; De Correspondent’s reader Rolodex; and Reveal’s crowdsourced hate report.”
Users on a membership desire a level of engagement beyond a simple subscription.
They want to talk back to the organization and feel they’re a part of an authentic relationship.
A key word when conceiving a membership model is “access.” Members are a level of users who hunger for something more than a passive engagement.
This from a @membershippzzle Tweet summarizes well:
For organizations on a mission, with devoted followers and/or a not-for-profit mission, donations can also generate revenue.
What is a donation model?
A donation model works because people will contribute in order to support the publication in question.
In most cases, the contribution will be a monetary one. If you plan to use a donation model, you should have a loyal and committed audience.
Otherwise, you’ll struggle to convince people to donate.
Donations offer you and your audience flexibility. They can be one-off or made as subscriptions.
You can combine your WordPress website with a service such as PayPal allows site owners to quickly begin to generate donation revenue. The Give plugin for WordPress gives advanced features such as donation forms, reporting, and donor management.
Neimanlab has a prominent donation call in their site’s footer, and Wikipedia.org famously runs aggressive and regular calls for donations via headers on their website.
Per their 2016-17 fundraising report, Wikipedia raised $91m dollars USD from 6.1 million different donations, including $60m from desktop and mobile banners and email.
There are a number of ways to use WordPress to place your call for donations front and center, including a sticky Peanut Butter Bar and/or Popup Maker, as well as simple, enticing buttons and clear calls to action on every page of your site, either in the header, sidebar and/or footer.
As with the membership relationship, calling for donations requires earnest authenticity, especially in today’s supersaturated media environment.
It’s not enough to assume your site visitors will understand where donations fit in your revenue model, and it’s up to site owners to make this as clear as possible. Users need to believe in your mission and the worthiness of their donation. And it’s important to make the ask clearly and often.
This from NiemanLab:
“Christina Shih, COO of the News Revenue Hub, talked about the importance of email when communicating with potential payers.
‘People see the donate button, but they don’t click on the button… You have to tell them, ‘if you value us, please donate to us.’”
– Christina Shih, News Revenue Hub
She emphasizes that email relationships are about quality, not quantity.
The Guardian is a good example of an organization that inspires user donations, with a localized (US) form here. A visit to their main US homepage here is a clear example of their emphasis on donations. As of writing, the site features a donation CTA in the prime top left real estate of the page, with a sticky footer asking for donations at as little as $1 USD. Even the Guardian’s membership plan, including a premium app, are formulated as a means to support the organization.
And it’s working, per Digiday:
“The Guardian now gets more revenue from consumers than from advertising. More than 900,000 people pay it through a combination of membership, recurring contributions, print and digital subscriptions and one-off contributions, accounting for 12 percent of the publisher’s total revenue.”
If you’re launching or running a publishing business, it’s valuable to examine your approach to revenue.
Where content exists that people value, however niche, the above models can be combined to effectively grow revenue and support your website’s growth. This can be achieved without the need for expensive, custom programming in terms of website or app development, allowing site owners to quickly grow an engaged audience happy to pay for specialized content.
Audience development is the key to making all these revenue models work, but the right tools also help, and there’s a lot to learn from other successful media businesses that have walked the same path – both large household names and smaller independents.
WordPress remains the stand-out CMS to quickly and efficiently take donations or create a subscription or membership model. When combined with an effective mailing list and a mobile app for your readers, it’s possible to make a niche content or news sites sustainable, lucrative and valuable to your users.
While MobiLoud can be used to convert any website to iOS and Android apps – our News platform is made specifically for WordPress-based digital publishers. The apps can integrate everything you need to run a profitable advertising or subscription business – and can fit nicely into your value proposition for potential members. If you want to know more about building a News app, schedule a call with one of our app advisors.
If not – good luck. We hope you find your way to a sustainable and profitable business model!