Knowledge Bridge

//Peter Whitehead /September 22 / 2014

The Guardian launches membership scheme to finance its ‘open’ digital development

The Guardian, the world’s third largest news site, has launched a membership scheme putting community and events at the heart of its plans to finance its paywall-free digital development.

Inviting readers to join one of three tiers of membership, the British newspaper is relying on a combination of readers being ready to pay to belong to a community of ‘diverse, progressive minds’, and the attraction of privileged access to events and a vast new venue, ‘Guardian Space’, where many of the workshops, activities and courses will be held.

This is how Editor-in-Chief Alan Rusbridger explained the membership plan and vision to readers: http://www.theguardian.com/membership/2014/sep/10/-sp-guardian-editor-alan-rusbridger-welcome-to-guardian-membership?CMP=twt_gu

Ken Doctor in Nieman Lab points out that by building an actual (rather than purely digital) community with a central venue, The Guardian is betting that the answer to newspapers’ digital woes are to be found in the physical world. The newspaper plans to hold hundreds of events a week across the country by partnering with education and cultural institutions to produce and co-produce events. “What makes The Guardian initiative stand out at this point is its sheer scope. Currently, seven to 10 people staff the events/membership business, [Deputy CEO David] Pemsel says he anticipates a ramp up to 30-50.” There are also plans to extend the scheme to some of it 105 million global users in the U.S. and Australia in 2015.

Jasper Jackson in the Media Briefing says The Guardian is “offering access to events and other perks aimed at building a third revenue stream to complement the cover sales, print and digital advertising that currently make up the bulk of its revenue, while also tying a core of readers closer to the Guardian brand.”

The three levels of membership range from free ‘Friends’, through ‘Partners’ at $25/month, to ‘Patrons’ at $100/month, “but will not include any additional access to the Guardian’s journalistic output in print or digital, which is currently available free on the web”.

Converting a 30,000 square foot space in the heart of London will have “an impact on the overall commercial narrative”, but the initiative is projected to contribute revenues within five years. Jackson also quotes Pemsel as saying:

“The revenue from the £15 tier and the £60 tier, in the modelling and all the research we’ve done, breaks even at some point and starts to contribute a quite significant amount of money. The days of legacy print organisations being able to monetise anonymous reach are obviously under severe pressure, therefore one has to look at multiple business models to address that.

“Growing anonymous reach is great for spreading the message but converting that into money is hard. If you don’t deepen the engagement – time spent etc. which are very important benchmarks of how people are engaging with your content – and then through that converting that data into knowing people is very important. Trying to do all three of those things globally is quite an interesting job, but from a commercial perspective, we continually talk about doing those three things equally because you can’t do one without the other two.”

Jackson thinks it’s “a big ask for intangible value … The paid tiers appear to offer limited value for a relatively steep price. Both resemble very expensive loyalty cards (with the added bonus of being able to call yourself a “card-carrying Guardian reader”). And for the moment at least, the events portfolio will mostly appeal to those within easy reach of London.” He compares it with The Times’ subscription scheme at $40 per month, which offers an events programme and exclusive access to digital content.

In addition to the direct revenue created by the two paying tiers of membership, members’ details will be used to personalise ads and content.

Pemsel noted one area where The Guardian is going to have to learn fast – managing relationships: “However, through our multi-platform reach we’ve now got more relationships with more people than we’ve ever had before and we need to try and convert that into something, not just because we want to make money, but because our readers want us to.”

Overall, Jackson’s take on the scheme is that there is too little value in membership to make it work on a rational consumer level, but that isn’t the point – the paper’s strategy is to appeal to emotion: “Yet the way both Pemsel and the wording on the Guardian’s membership site emphasise that Patrons, Partners and even Friends, will be ‘supporting the Guardian’s journalism’ makes it clear this is aimed at more irrational impulses. It’s an appeal to the emotions of those who identify with the Guardian brand. It is reminiscent of the way loyal print readers did, and in small numbers still do, consider the idea of being a Guardian (or Times or Telegraph) reader a core part of their identity.

“The Guardian is effectively saying to its most loyal readers: ‘we won’t make you pay for our content, but we will ask you to in return for a few, mostly intangible, perks, and the knowledge that you are contributing to what we do’.”

In a country where terms such as ‘Guardian-reader’ and ‘Mail-reader’ are regularly used as both badges of honour and abusive stereotypes, “Building a business model around the affection some of its readers feel for that voice makes sense for The Guardian in a way it wouldn’t for most competitors.”

Article by Peter Whitehead