Newspapers Doing Well With Membership Clubs Instead Of Paywalls

from the join-the-club dept

Wed, Jul 7th 2010 11:31pm — Mike Masnick

One of our biggest complaints with news publications that insist "a paywall is the answer" is the fact that they never seem to actually add any more value to their publication that makes it worth paying. They're so focused on getting people to "pay for content," they miss the fact that there's plenty of competing content, and the real focus should be on providing value that builds a community. Thankfully, not all newspapers are making that mistake. Bill Mitchell, at Poynter, has a post about a new study looking at newspaper business models that both highlights that straight paywalls need to be about more than just paying for content, but also which highlights the success some publications are having with membership clubs, which specifically provide additional value behind the content for those who are willing to subscribe:

Take, for example, the street-level bookshop at Politiken, the leading newspaper in Denmark. I stopped in there one drizzly Saturday morning last Fall after teaching in Poynter's Scandinavian Summer School. I picked up a couple of travel guides and an English language version of a popular Danish novel. But I paid my bill and left the shop oblivious to the range of products and services available to Politiken subscribers via its Politiken Plus loyalty program.

"We can say 70 percent of (our subscribers) use Politiken Plus during the year," the paper's sales and marketing director, Poul Skott, told the authors of the WAN report. "The more products we have the better ... the harder it is to say good-bye to the newspaper. It's going to hurt a bit, because you can only get a Plus card as a newspaper subscriber."

This Google translate page will give you a sense of what the program offers, including special offers on travel, restaurants and theater, and how the activities and deals of Politiken Plus are integrated into the newspaper.

This actually fits in well with some of the suggestions that people came up with back at the Techdirt Saves* Journalism event last month, highlighting how publications can focus on building up services for the community which keep them loyal to the publication and the community itself.

It sounds like the early results from such programs suggest they work well (or, at the very least, better than comparable newspapers that don't use them). Still, reading through the analysis, it still feels like most publications are looking at these programs as ways to "retain subscribers," not as a central reason to buy. That is, they're still focused on "selling the newspaper" with this is a bonus add-on, rather than trying to sell this bundle, which is made more valuable by getting the news as well.

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Filed Under: membership clubs, newspapers, paywalls

11 Comments

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Anonymous Coward, 8 Jul 2010 @ 12:19am

"my" newspaper in the Netherlands has a "club" as well, but the offerings are sparse and include loads of things that i can buy cheaper and faster elsewhere. They're not quite sold on the idea of offering extra value and quite frankly: I have this feeling they're aiming for the 40-50+ crowd and not for us youngsters. Which fits with this whole "retaining readership" defensive position they're in.
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Anonymous Coward, 8 Jul 2010 @ 2:32am

"This Google translate page will give you a sense of what the program offers"

Figures it can't be in English. Far be it for Americas to innovate.
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Anonymous Coward, 8 Jul 2010 @ 2:32am

Re:
Americans *

Instead, they're too busy trying to litigate.
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Pangolin (profile), 8 Jul 2010 @ 4:28am

Focus on Subscriber retention
The focus on subscriber retention is not really misguided. This is a newspaper after all. While the business model has to change with the times there are still dollars to be made from advertisers. Advertisers pay based on the number of eyeballs that will see their ads. This is probably still the majority of the income for the paper.
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David Muir (profile), 8 Jul 2010 @ 5:18am

Re: Focus on Subscriber retention
I was about to agree with you. Attracting AND retaining customers is a normal one-two priority in business. But to say "this is a newspaper after all" sounds like you're okay with them not just retaining subscribers but clinging to the old business model. Advertisers indeed pay for eyeballs. More eyeballs come from growing the community through a high quality online presence that encourages sharing, interaction, and loyalty (like a real community). For more revenue: add reasons to pay for scarce goods and services associated with, for example, paid membership in a club (a formal part of the community you've created).

To me it is pretty straightforward, yet we've seen so often how the "paywall" is nothing more than slapping a price on something that was free the day before (and worse: building that wall around it so sharing and growing new readers can't happen).
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Anonymous Coward, 8 Jul 2010 @ 7:09am

it continues the trend of saying that the content no longer has a market price and in the long run, has little true value by itself, certainly not enough for anyone to part with their money. the club is a nice idea, but in the end, it is the business version of "tying a pork chop around your neck so the dog will play with you" sort of deal. at some point, the original product (newspaper) because irrelevant, because people are buying the special and not what it is that you really do. i suspect running a specials club would be a lot less expensive than running a newspaper.
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Anonymous Coward, 8 Jul 2010 @ 7:14am

Re:
"it continues the trend of saying that the content no longer has a market price and in the long run, has little true value by itself"

Don't confuse price and value. The air you breath is free but it has value.

"certainly not enough for anyone to part with their money."

If something can be offered for free it should. Why should people have to pay for something that can be offered for free? That makes no sense. There is no good reason to artificially make people's lives more difficult just because some selfish jerk wants to make money.
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Anonymous Coward, 8 Jul 2010 @ 7:49am

Re: Re:
yawn. same old same old mike, you never stop.

price and value are not the same, but they have an elastic relationship in the way people look at things. something given for free has no price, and given all the time, also loses value as an individual item because it can always be replaced.

value for anything functional never truly reaches zero (unless replaced by something better), but value in part is expressed in how much care you would take to preserve it. if you can get another whatever almost anywhere, the value for the one you have is very low, it is replaceable and unimportant.

the "are is free but has value" argument is always the dumbest of arguments, because you are trying to confuse a life requirement with purchases made of optional things or services. blood is free too, right? bones seem to be cheap too. a moronic argument. i dont value air, i require it. i dont require tickets to play mini putt with some drummer. those i would purchase if i valued them enough.

"If something can be offered for free it should. " - in a socialist economy, perhaps. something offered for free (including with no advertising or no other income sources attached) is nice, but it is also self-defeating. anything that takes time to create (even the original such as a song) must have a way to recoup the costs of the time or fewer people will be interested in creation of the product to start with. some still will, but fewer will. time will be spent elsewhere so they can afford to eat. it is the nature of the game.
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Modplan (profile), 8 Jul 2010 @ 9:30am

Re: Re: Re:
Yawn, same old TAM, you never stop.

You need to find something more productive to do with your spare time than trolling on nearly every Techdirt post. Ever heard of video games? Or what about that book you were buying even though all the articles were available by other means...

http://techdirt.com/article.php?sid=20100616/1038269856#c378
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btrussell (profile), 8 Jul 2010 @ 9:36am

Re: Re: Re:
PCLinuxOS = $free
Win 7 = $395 (after tax)

Open Office = $free
MS Office = $789 (after tax)

I value PCLinuxOS and OO.o very much.
By comparison, MS isn't even close. If I was given 7 and MS Office, I would give them away as well as the hassle of maintaining and keeping secure is not worth it to me.
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Kim M�ller-Elsh�j, 9 Feb 2011 @ 2:22pm

I believe it!
I have worked with customer clubs in Bang & Olufsen and I've studied them with many other brands, and I agree: They can make a huge difference! But I don't think it is just a question of getting access to discounted products. Such clubs/communities only REALLY get sticky when people start getting involved with other people in it, because then if you want to quit, you are not only giving up cheaper products or concerts or whatever, you are giving up the social relations you build through participating at such earlier events.

There are some amazing academic articles available on the topic (that also include studies of "subcultures of comsumption") by Muniz & O'Guinn and Schouten & McAlexander. The latter two have done some fabulous work on Harley-Davidson and Jeep :-) Look them up! They are great reading.
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