Can Memberships, Clubs, Cruises Keep Media Companies Afloat?

Late last month, an ad for a new job appeared on the Guardian’s careers website. The position for “General Manager – Guardian Club” was notable because it signaled an important initiative at the paper in the form of a new entity, the Guardian Club.

“The club will make our most committed readers/users feel they are genuinely part of our organization and reward their loyalty,” the ad read. “The General Manager has the unique opportunity to set the direction, create the club and then deliver on that ambition.”

Just over a week earlier, the New York Times announced a club of its own, the New York Times Wine Club. It promised to provide “readers and other wine enthusiasts with distinctive wines from many top regions around the world.” And by the end of August, the Pittsburgh Post-Gazette unveiled a new membership offering in the form of PG+, a paid online service that promised to offer subscribers access to “interactive features and exclusive content” in addition to “access to special Post-Gazette events” and discounts.

These new memberships and clubs, which focus on offering services to readers that are largely different than a pay wall, are a byproduct of declining advertising revenues. As a result of that lost income, news organizations are looking at new ways of generating revenue from readers. The Washington Post has PostPoints, a reader rewards program that offers special benefits to subscribers and online readers.

The Globe and Mail, a national newspaper in Canada, recently organized a special luxury cruise that put readers in close contact with some of the paper’s top talent, all while cruising the Mediterranean. The lowest priced fare was $8,619 in Canadian dollars, which included round-trip airfare, airport transfers and the cruise. The most expensive fare was close to $27,000. The 2008 Globe and Mail Cruise sold out all 500 slots [PDF file], and included celebrity chefs, travel sponsors and the newspaper’s publisher, editor in chief, and key columnists on board.

Asking readers to step up

In a memo to staff last week, New York Times publisher Arthur Sulzberger Jr. and Times Company CEO Janet Robinson confirmed that the paper is looking to roll out more reader-oriented services and affinity programs.

“As our advertising revenues have declined, we have asked our readers to
bear more of the cost of our journalism, as many other newspapers have done
with their readers,” they wrote. “They have demonstrated a willingness to do so.”

Thomas Carley, the paper’s senior vice president of strategic planning, expanded on this idea in a phone interview.

“Newspapers have a long tradition of paying for their journalism by taking advantage of the community they create,” he said. “Classified ads were an example of that and today it’s no longer the staple it once was. It behooves the industry and the New York Times to think of ways to replace some traditional revenue streams using that same thinking. What is our community and how can our newspaper pay for its journalism by enhancing that community? The wine club is an example of that.”

The Times previously experimented with a paid content model in the form of TimesSelect, which offered access to work by the paper’s top columnists, among other content. TimesSelect was canceled in 2007 after attracting over 200,000 subscribers. The Times Company recently launched a new program that once again uses some of its high-profile columnists to help drive revenue. Its Knowledge Network, which has been in place for two years, announced that columnists Nicholas Kristof and Gail Collins and wine critic Eric Asimov would be leading paid online courses. (Carley declined to share any specific revenue figures related to the wine club or courses.)

Overall, Carley said, the wine club and Knowledge Network courses are the beginnings of what the company hopes will be a wide array of new membership and affinity offerings. A hint of a potential major membership offering came in July when the paper surveyed readers to gauge their reaction to two proposed membership offerings that would include a range of discounts, access to special features and events, and other benefits.

For its part, The Guardian hasn’t offered specific details about what the Guardian Club will offer. But the job description, which is no longer live, sends a clear message that the paper sees its club as part of a new revenue and community engagement model. It’s about more than money.

“Increasingly we believe our future resides at the centre of a community of engaged readers and users, whose relationship with us will be much closer and more involved,” read the ad. “The Guardian Club will be our transformational next step in bringing these customers to the centre of our business, rewarding loyalty while growing our reach and revenues. We want members of the club to feel that they are genuinely part of our organisation, and as close as it is possible to get to the editorial heart of our company.”

Jeff Jarvis, the BuzzMachine blogger, Guardian new media columnist, and director of the interactive journalism program at the City University of New York’s new Graduate School of Journalism, wrote on his blog that the use of membership models brings media companies into the realm of NPR.

“The New York Times and the Guardian, to name two, reportedly have visions of tote bags, mugs, and events in their heads,” he wrote. “And I think that’s a fine idea. No salvation. But a fine idea … What the Times and Guardian seem to be considering is membership in the NPR mold – give us money and get a T-shirt to brag about it. That works at NPR because the network is a charity and supporting it is a political statement. The same might be true of the Guardian, which operates on a mission (“the world’s leading liberal voice”) and is owned by a trust. But the Times, as the product of a profit-making company with shareholders? I’m not sure. We’ll see.”

Lessons from public radio

One example of a successful membership model is in place at Minnesota Public Radio. This June, it surpassed the 100,000 mark for members, making it only the second public radio station to hit that milestone. (WNYC is the other.)

Valerie Arganbright, senior director of membership for MPR, said the membership model is “in our DNA” and that the station makes a concerted effort to connect with members and deliver the kind of programming they will support. As a result, membership revenue is the single largest source of income for MPR, accounting for roughly 20% of its operating budget.

“Without member support we simply would not be able to provide the kind of programming that we provide,” Arganbright said. “It’s how we started from the beginning 42 years ago.”
She says the possibility of for-profit media organizations going after the same people for membership dollars isn’t necessarily a threat to MPR.

“I don’t know if it’s competition or not,” she said. “It’s so particular to the audience. If a person listens to MPR and reads the New York Times, there’s no reason why that person would stop supporting MPR in order to support the New York Times. It all gets down to loyalty: what is that person getting from that service, and do they want to put some money behind that?”

Anyone who gives any amount to MPR becomes a member and receives a discount card that can be used at a variety of local businesses. Those who give larger amounts are also given the option of receiving a gift (this is where the oft-cited tote bag comes in). Members also receive free or discounted access to MPR events, among other benefits. She said the average member contributes roughly $130 per year.

MPR also offers a range of very special benefits to those who give generously enough to become part of its Leadership Circle. Someone who commits to give $100 per month receives a personalized tour of the MPR studios, a mention in the annual report, a subscription to Minnesota Monthly magazine, and “a personal broadcast message on two dates of your choice,” among other benefits. Someone who gives $10,000 per year, or $833 per month, receives an “invitation to an annual dinner with Minnesota Public Radio’s president and an MPR luminary in a private home” and “lunch with a distinguished journalist or artist.” (These benefits are reminiscent of the controversial “salons” idea that was floated and then canceled by the Washington Post.)

it’s about more than the tote bag

Though it offers tote bags and studio tours to members, Arganbright emphasizes that these aren’t the core benefits of membership.

“Fewer people take the stuff than those who do,” she said. “Some people love that emblem of pride in the community, and that’s great and we want to make that available. Other people … want the satisfaction of knowing that they’re doing their part.”
That view echoes Jeff Jarvis’ advice to any company considering a club or membership model.

“So, yes, news organizations, please think about membership,” he wrote. “But don’t think if it as merely a revenue opportunity. That is doomed. It is insulting … No, instead use this opportunity to think about opening up as an enabler and member of a new network, a new club, and don’t think of yourselves as the owners of this club but instead as just another member.”

Media consultant and Editor & Publisher columnist Steve Outing recently looked at the membership concept in a blog post that examined Bill O’Reilly’s membership club. (On a related note, Sean Hannity operates “Hannidate”: http://web1.hannity.com/hannidate/ a branded dating website “where people of like conservative minds can come together to meet.”) Outing said news organizations have to experiment with all kinds of new revenue models — and expecting more from readers is a necessity.

“I get a sense most folks in the business understand it will take a lot of different revenue stream to support any kind of significant news organization,” he said in an interview. “Membership is great but it’s not going to totally float the boat.”

Speaking of boats, Outing envisioned the Times “sending Thomas Friedman on a cruise and selling some tickets for that. You can probably find some journalists who will not like these ideas, but we’re all floundering around trying to not let things fall apart too much more and also reverse the situation.”

Craig Silverman is an award-winning journalist and author and an associate editor at MediaShift and Idea Lab. He is the founder and editor of Regret The Error, the author of Regret the Error: How Media Mistakes Pollute the Press and Imperil Free Speech, and a weekly columnist for Columbia Journalism Review. Follow him on Twitter at @CraigSilverman..