The benefits of membership networks versus paywalls

I moved back to Melbourne at the end of last year after nearly 10 years away and since then I’ve been enjoying reacquainting myself with some of the city’s best media assets - its public radio stations.

Melbourne is blessed with two long running public FM radio stations, 3RRR and 3PBS. They cater to a music loving audience, largely inner urban, but with a generous scattering through the suburbs and beyond.

The stations have always been edgy with their programming choices, but in recent years have stepped up to a level of professionalism in marketing and commercial smarts that belies their amateur origins.

Both 3PBS and 3RRR have grown up with their audiences. The programming has matured to reflect this and now includes a number of talk shows as well as the specialist music shows, all of which are available through digital access points as well as on the wireless.

Each station runs an annual radiothon and offers a range of rewards and incentives (as well as a bit of emotional blackmail) to lure and retain subscribers.

It’s a model that is worth serious consideration from a publishing perspective. And recent announcements by The IndependentThe Atlantic and Talking Points Memo suggest that’s exactly what publishers are doing.

The Indy has decided to remove its paywall for North American readers and concentrate on developing an advertising supported model in that market. Meanwhile, The Atlantic has bulked up its events program and TPM is moving towards a US$50 “TPM Prime” membership.

The distinction between a membership and a paywall might be subtle, but as GigaOm’s Mathew Ingram describes it: “A membership layer treats readers as though they are special and gives them added benefits in addition to the regular free news content, while a paywall or traditional subscription simply charges everyone the same amount for the same content. One feels like a duty or an annoyance, and the other feels more like something unique that only those who are really committed to a topic or a site have access to – like a velvet rope instead of a wall.”

The key point is that with a member based system there is a deeper relationship between the brand and the customer. Paywalls, by comparison, are particularly challenging for publishers hoping to engage an otherwise disconnected audience.

The Independent‘s digital managing director Zach Leonard acknowledges this when he says overseas audiences “don’t necessarily stick”.

“So we’re creating new reasons to engage with us,” he told “If we were theNew York Times, and had a real following, particularly a subscription-based audience, I think we might have a different view on that.”

The Atlantic, on the other hand, is thriving digitally as well as growing print sales despite having no paywall. Instead, it follows a revenue diversification strategy that has spawned a number of new sites – most recently a business site called Quartz – a marketing services division and an events business that now brings in 14 percent of the company’s revenue.

‘The key point is that with a member based system there is a deeer relationship between the brand and the customer’

The overall aim is to get closer to readers, to understand them better, and then to sell them stuff. There’s nothing particularly new in that, except that publishers need to be smarter about it than they have previously. The starting point must be that the relationship is mutually beneficial.

Ultimately, consumer payments are unavoidable, but they are not the only form of payment. The debate has moved beyond whether readers should pay, to assessing the right mix of access, offers and price points suitable for individual brands.

Melbourne’s 3PBS and 3RRR understand the value of their brands in creating a cool, member network for music lovers. The cost of a subscription gets you access to a range of standing discounts, special offers and events and the feeling of being an insider at the hippest party in town.

The stations’ programmers share the excitement and enthusiasm for the music they broadcast with their audience. And business subscribers get to leverage that relationship for their own products.

If publishers can tap into this line of thinking they will find real opportunities to invigorate brands and generate solid revenue growth.

Hugh Martin is CEO of Crown Content, publisher of Margaret Gee’s Media Guide

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