Making the business case for membership

This section addresses the topic of membership and money. What revenue can you expect from a membership program? What costs should you plan for before you decide to launch a membership program?

First, a reminder. Membership is more than just a piece of a revenue pie. Membership is a relationship between a newsroom and its supporters that treats audience members as core participants and stakeholders. This relationship is supported by memberful routines, which MPP has found are a critical component of a membership strategy. 

Members can also be a source of revenue support, as they are in most member-driven newsrooms MPP has studied. In order for that revenue strategy to work, you need to understand what scale of investment (and ongoing cost) is required and what scale of returns you can expect.

Here’s a second reminder: compared to subscriptions, membership in news is still a relatively new model and a relatively new revenue strategy. The Institute for Nonprofit News’ 2019 Index Report, which aggregates data from its 108 member newsrooms based in North America, found that only a third of its newsrooms reported having a membership program in 2018. About two-thirds of those membership programs are quite young: three years old or younger and have fewer than 1,000 members. Membership is even more nascent in Latin America, Africa, and Asia.

Keep this in mind: the value proposition and business model for membership are different from the value proposition and business model for subscription. In a subscription model, audience members pay for access to a product or service. It is a transactional relationship in which access to the content is what is monetized. This model typically requires a paywall of some kind. 

An open question remains whether membership will follow charitable giving trends or subscription trends in terms of revenue growth across newsrooms. The industry does not yet have the data to definitively answer that question, although the research team sees a lot of reasons for hope and opportunity for membership revenue growth. One exciting trend MPP has identified in its work with newsrooms is that, unlike what we are seeing with subscriptions, the membership ceiling has not yet been reached. 

Some successful member-driven newsrooms are leaning into a strong distinction between membership and subscription in their value proposition and marketing. The Daily Maverick in South Africa implemented a “pay-what-you-can” model, partially to tilt supporters’ minds toward charitable causes when considering joining. CEO Styli Charalambous wrote: “Subscription fatigue is a thing, and publishers in South Africa have to compete with the New York Times for a slice of people’s subscription budget.… But people can and do support multiple good causes that resonate with them. We wanted to convey our cause that was worthy of support alongside the Society for the Protection of Animals, National Sea Rescue Institute, or educational development programmes.”

In this section, we focus on financial planning and forecasting for membership, which should help your newsroom decide whether or not to pursue membership, whether to stick with membership, or whether to invest more resources into membership to continue building it as a source of sustainability.