Nonprofit News Site Texas Tribune Finds Stability with a Mixed Membership and Subscription Model

The rumor mill says local newspaper are dying, but The Texas Tribune is demonstrating how digital-native local news can flourish, even with a nonprofit

The rumor mill says local newspaper are dying, but The Texas Tribune is demonstrating how digital-native local news can flourish, even with a nonprofit model. Publisher Tim Griggs spoke with us about the site’s multiple revenue streams, including subscriptions and memberships, and how the site is bringing general political news to a niche market. This is a great Case Study for anyone interested in using both membership and subscriptions (and yes, they’re different) to boost their bottom line, or looking for a business model to support mission-oriented content. Finally, get tips on paywall optimization, the effective use of crowd-funding, and why social media does matter (even if it won’t make you a dime).

Company Profile

Founded: 2009
No. of Publications: 1
No. of Employees: 45 full-time
Business Model: Hybrid — subscriptions, memberships, sponsorships, major gifts, events
Paying Members: 3,000
Paying Subscribers: 600
Location: Austin, TX
Website: https://www.texastribune.org/

Target Market

The Texas Tribune is a nonprofit regional news site dedicate to filling the gap in news coverage about state politics, policy and government. While there are 19 million adults in Texas, the Tribune considers its target market to be those adults who are engaged in local and state politics, sometimes affectionately referred to by Griggs as “policy wonks.” The Tribune estimates this number to be a little higher than the 2 million who voted in the last state primary.

However, the Tribune is in a growth stage and trying to identify the ceiling for this audience and what the broader audience may be if it expands its portfolio.

Content

The Texas Tribune primarily covers state politics through text and video. News is added on a daily basis, and produced by the newsroom’s 25 employees (15 are full-time reporters).

The Texas Tribune is unique in that it was digital from the start — there was no print paper to transition over. For that reason, everyone in the newsroom has a serious social presence and use social media as part of their reporting. “It’s not required,” says Griggs, “but it’s part of the ethos of the organization.”

In addition, because of the site’s digital roots, it weaves data into daily coverage. “For an organization this small, it’s impressive,” says Griggs.

Finally, not just video, but live streaming, is integral to how the site reports the news. It has a robust live streaming platform that was paid for by a Kickstarter campaign and was subsequently used to live stream Wendy Davis’s filibuster and other important events.

The Tribune has also created microsites which attract niche-specific audiences (Best Practice Alert for news sites!): The Brief (daily news round-up), Trib+Water (a co-publication with an environmental organizational called The Meadows Center) and Trib+Edu (a co-publication with University of Texas-Austin), and an OpEd site called Trib Talk.

However, the only premium content on the site is for Texas Weekly — a newsletter that was run by Ross Ramsey since 1984, and became a digital-only subscription product after Ramsey joined the site in 2009 as a executive editor. All other content is free, and membership is voluntary (there is no meter, required registration or payment to view articles).

Membership has the following benefits (depending on which of the nine plans you select — see Revenues for more details):

    • Texas Tribune monthly newsletter
    • Invitation to Tribune happy hours
    • Member discount for ticketed Tribune events
    • Member’s name as a donor on the site
    • Dual/household membership
    • TribMonth, a monthly roundup of the Trib’s best material
    • An invitation to the end-of-year cocktail “State of the State” reception
    • The Texas Tribune Yearbook
    • Donor Board Recognition at Tribune conversation series events
    • Invitations to exclusive social events during the Texas Tribune Festival
    • Reserved seating at select events
    • Opportunity to promote the nonprofit of your choice on the Tribune site for a year
    • Invitation to small VIP Tribune gatherings
    • Reserved seating and parking at Tribune conversation series at the Austin Club

Note that the Texas Weekly subscription remains independent of membership, even if someone contributes $5,000. Because of the small number of sites carrying out anything like this, we are unsure at this time if this is a best practice or not, although we suspect the clean division between the two types of recurring billing makes it easier for consumers to understand the difference between membership and paying for content.

Revenues

Despite being a nonprofit, The Texas Tribune generates $5 million to $6 million in income a year. The estimated breakdown from multiple revenue sources is:

    • 15% from major gifts
    • 15% from foundations
    • 15% from individual memberships
    • 30% from corporate sponsorships (underwriting, a little bit of advertising)
    • 20% from events
    • 5% from subscriptions from Texas Weekly and other syndication

 

As you can see, subscriptions make a small percentage of revenues, while voluntary membership accounts for 15%. And while fundraising is significant, half of the site’s revenue is from “earned” income (memberships, sponsorships, events, subscriptions syndication, etc.) It’s worth noting that individual memberships, which can be sold and marketed like subscriptions, are essential to gaining major gift grants, corporate sponsorships and other fundraising dollars, since individual membership numbers are cited in grant requests and to corporate sponsors looking to make an impact on a targeted audience. In rare instances, an individual member can eventually become a big donor. More commonly, it’s possible to move them up the ladder from small donations to circle-level pledges (see membership levels below)

Griggs explained that The Tribune sees three ways to monetize consumers and/or donors:

    1. Contributors — Audiences members who believe in a cause, but may or may not be regular readers. These readers need to be captured with point in time donations.
    2. Members — Readers who want to join us, be part of the family. They are primarily targeted through the tiered membership plans described below.
    3. Subscribers — For now, subscriptions are limited to Texas Weekly. This audience values insider content enough to pay for it, and The Tribune is working on alternate subscription products to attract this crowd. It’s unclear whether this will take a B2B approach, or simply target consumers with niche interests.

Members have the option of choosing a number of annual membership plans (the accompanying benefits are displayed smartly through this dynamic landing page):

    • Student – $10
    • Enthusiast – $35
    • Activist – $60
    • Advocate – $150
    • Diplomat – $250
    • Benefactor – $500
    • Editor’s Circle – $1,000 (3 year commitment)
    • Leadership Circle – $2,500 (3 year commitment)
    • Chairman’s Circle = $5,000 (3 year commitment)

Griggs told us the $60 Activist level was the most popular plan (also the default choice on the landing page).

Texas Weekly subscriptions are priced at $349/year.

The Tribune also has 60 paid live events a year, culminating in its signature three-day event – The Texas Tribune Festival — which Griggs describes as a combination “Woodstock/SuperBowl for policy wonks.”

Finally, The Tribune syndicates its content to The New York Times (Griggs is a former employee, and struck a deal that two pages from Texas Tribune appear in NYT on both Fridays and Sundays) and other newspapers, television and radio stations throughout the state.

Marketing Tactics

Because it’s still getting off the ground, The Texas Tribune has not been aggressive in pursuing paying subscribers since it has so much ground to cover in its building up an audience. However, since publication, The Tribune has hired a consumer marketing director, indicating its investment in growing its subscription base.

Furthermore, the site did receive a grant from the Reynold’s Institute for a “growth hacker” to help them test ways to drive audience through marketing and technology. Griggs also spoke about the need to deliver the right message to the right person at the right time to spark contribution, membership or subscription sales. “Right now we’re not sophisticated enough to do that because we’re just starting, but we have it planned to get those three types of consumer revenues in perfect harmony.”

In the meantime, the site engages in the following marketing tactics:

SEO
Most of the reporters are trained to optimize their own stories, a practice we rarely see at news sites. But Griggs mentions that there’s room for the site improve, especially in terms of site architecture and getting down to specific metrics, like load time.

Social Media
Griggs says social media is “hugely important” to The Tribune. “When you’re a new organization, it’s critical for us to meet people where they are. Our brand is still unknown in pockets of the state, so it’s going to be critical for us to build a community. Even if [social media] doesn’t amount to a nickel in revenue, it matters for impact.”

Griggs reports that about 15% of the site’s traffic is through social media, but special sections like TribTalk are getting about 50% of traffic through social. “We’re continuing to getting smarter about timing posts, geo-targeting, re-posting.”

While the site has more than 46,000 “likes” on Facebook, Griggs says Twitter is where the news site really shines (nearly 87,000 followers), where the site uses Twitter cards to highlight posts and increase engagement (see our How-To on Best Practices for Twitter Cards). In addition, the cover images on Facebook and Twitter are used to advertise the upcoming Texas Tribune Festival, a smart tactic for marketing events (see our How-To on Marketing Events). The site also has a presence on YouTube, Instagram and LinkedIn.

PR
The site uses a PR firms for its live events, which are throughout the state. The PR firm also helps with brand awareness and advertising the site’s recent award wins.

Postal Direct Mail
The Tribune primarily uses postal direct mail for membership renewals (see Retention Marketing), which is an unusual and smart move for a digitally native site.

Conversion Tactics

While The Texas Tribune does not require email registration, it does offer a number of email newsletters, including ones specifically designed for its microsites (Trib+Water, TribTalk, etc.). 

Notably, the membership conversion page, with its dynamic listing of membership benefits, is more optimized than the conversion page for Texas Weekly subscriptions.

However, the subscription conversion page for Texas Weekly does include a specific headline (Best Practice Alert!). On the other hand, removing navigation bars, footers and other distractions could further optimize both pages. The only click-able feature on a conversion page should be your “Join” button.

Note: Griggs mentioned that tangible products (e.g., tote bags, mugs, tchotchkes) don’t “move the needle” on membership sign-ups. This is an important lesson since we’ve seen other sites with membership models assume the NPR/PBS tote bag is a critical conversion factor when it usually isn’t at all.

There are no trial offers at this time, though Griggs said they are planning on creating one for Texas Weekly. Given the plethora of free content on the site, we strongly recommend a paid trial in order to get more qualified prospects.

The site is also starting to test email deliverability timing (6am vs. 7am vs. 8am), and is in the process of integrating Optimizely to conduct landing page testing.

Retention Marketing

Griggs reported that The Texas Tribune gets a 67% retention rate on annual memberships, and a 78% retention rate for Texas Weekly subscribers. This is impressive for a B2C publication.

Postal direct mail is used to renew members, although the site is switching to auto-renew on memberships. Griggs also told us that email marketing and some telemarketing (as a last resort) has helped boost retention rates.

Cross-Sells/Upsells

Griggs states that the site’s live events work as both a cross-sell and retention tactic, since members are given discounts. In addition, the site often tries to upsell higher-level memberships at renewal.

About Tim Griggs

 Tim Griggs was the Executive Director of Cross-Platform Monetization at The New York Times before he was awarded a Knight Foundation fellowship to work at The Texas Tribune. Six months later he was named Publisher & COO of The Tribune.

He says the biggest lesson he’s learned in this business is that there’s no silver bullet. “Every brand is different and every execution is different, but if your content has value, people will pay for it.” He states this is true across the board — whether you’re speaking about The New York Times or a nonprofit like The Texas Tribune. The revenue models may be different, but it’s possible to find one that works so long as your content is valuable.

When asked what advice he has, he says he has a 50-page slide deck of advice, but offered two gems:   1) Listen to your users. We knew people didn’t want to be sold, they wanted to be wooed. That’s why we integrated the meter count at the Times — alerting them was better than surprising them with a paywall. So listen to them qualitatively and quantitatively.  2)  Make the revenue model core to your organization — you have to have technology, editorial, creative, working together. And it has to be a priority. Too many orgs slap up a paywall and then wonder why it doesn’t do well. It takes constant experimentation to keep it growing — the money doesn’t grow on trees, you have to work at it.

Vendors & Technology

Hosting — Amazon Web Services
http://aws.amazon.com/

Payment processing — Authorize.net and experimenting with Tinypass
http://www.authorize.net/
http://www.tinypass.com/

CMS- Homegrown system called Armstrong

Email — MailChimp and CMS
http://mailchimp.com/

CRM — SugarCRM
http://www.sugarcrm.com/
Although Griggs notes that the site needs to evaluate how to have a central registration database for emails, events, and memberships. Right now, the existing systems “aren’t talking well to one another.”

Analytics — Google Analytics
http://www.google.com/analytics/

A/B Testing — Optimizely
https://www.optimizely.com/

Subscription Insider Analysis

We loved this Case Study because it demonstrates how innovative news sites can still thrive in today’s disruptive digital environment while still providing a much-needed public service.

Seven things The Texas Tribune is doing right:

    1. Understanding and narrowing its audience to the engaged, voting populace, instead of a delusional sense that it’s relevant to all Texans. We also like that Griggs was able to identify three types of engaged audience members, with a need to monetize each differently.
    2. Investing in live streaming. Since computers are the second screen, it’s foolish for any news site to think that it will survive without video coverage of news events. Plus, we like that the site was able to get the funding for video equipment through Kickstarter — this is an appropriate use of Kickstarter, as opposed to sites who think they can fund their entire operation through crowdfunding.
    3. Creating micro-sites on niche-specific topics that will drive more targeted traffic. Other sites could use this method to serve up more targeted advertising (see our On-Demand Video on Using Subscriber Data to Boost Ad Sales).
    4. Making social media and digital skills part of the organizational ethos, instead of a side project.
    5. Exploring and establishing multiple revenue streams, and having the boldness to pursue both subscriptions and memberships.
    6. Offering multiple membership levels, making the publication truly inclusive of all economic levels and furthering its brand reputation of serving the public.
    7. Focusing on membership benefits and foregoing tchotchkes to entice membership sign-up. Other sites would be wise to follow this advice instead of blindly following the NPR/PBS model.
    8.  

There is, of course, room for improvement. One, while we really love the membership conversion page, it could be more optimized, along with the subscription conversion page for Texas Weekly, by removing the navigation and all other click-able distractions except the “Join” buttons. Two, we agree that a robust testing program would help the site optimize revenues in innumerable ways. Three, while we’re happy to hear about the addition of a “growth hacker,” the site probably needs a more integrated, multi-channel marketing plan. Newspapers often don’t have Chief Marketing Officers, which is what makes this function so foreign to many news organizations, but given The Texas Tribune’s pride in being a digital-only publication, we think the organization might be more amenable — and well served — by an integrated marketing plan and department.

Finally, we think everyone should heed Griggs’s parting advice: your readers don’t want to be sold, they want to be wooed.

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