Can Newspapers Evolve Into ‘Local Membership’ Organizations?

newspaperIn the days before MapQuest and Google Maps, the first stop you’d make when planning a long road trip was often your local AAA office. There — if you were a member — you could get directions, maps, listings of hotels and attractions, and information on discounts at some of the places you were headed. And, of course, if you got stuck somewhere along the way, AAA would give you the tow, jump or gas you needed to be on your way.

And today, even with the the popularity of digital maps (and the prevalence of insurance companies and car manufacturers providing roadside assistance), AAA’s membership base remains strong with about 53 million U.S. members, up about 50% from ten years ago. Each member pays about $60 annually, allowing the organization to more or less “own” the market when it comes to automotive travel membership.

Meanwhile, AARP “owns” the market on membership for senior citizens, and countless other organizations have a similar lock on their own niche areas — charging yearly dues and providing value through discounts and services.  But, so far, I don’t think anyone has really nailed a local membership model, and there are two organizations that have great potential to dominate in this area — local newspapers and the YMCA.

Before we get into their opportunity, though, let’s talk about what I mean by “local membership.”

What makes the AAA model so successful is that they offer a core service (roadside assistance) with other perks. Some people pay for the core service but stay around for the perks — a couple of hotel and restaurant discounts and the membership essentially pays for itself. And a timely towing when stranded might inspire someone to hold onto their membership for decades.

On a local level, families always have products or services they need, and information is one of them. “What to do this weekend? What daycare to use? Are there safety concerns in my neighborhood? What neighborhood should we move to? What summer camps are available for my child?” From a product standpoint they need those home services, day cares or events to attend.

Many families will pay $100-200 annually to join their local science center or zoo so that they know that on any given weekend that can have something to do. That’s a lot of money, but after a couple of visits the membership dues pay for themselves. Getting someone to say just that “it pays for itself” is the key to any successful membership program. Discounts are another key part to a local membership program — but maybe more important are included services. This could be anything from oil changes and home warranties to monthly flowers or free lattes at the local coffee shop.

Newspapers are well positioned to start these kinds of programs. They have great brands that are well-known in their communities, they already have a membership base in the form of subscribers, and they have strong relationships with local businesses and organizations.

We’ve seen newspapers launch “perk” programs to complement their subscriptions — but this isn’t enough. A membership organization actively understands the needs of its core members and provides an array of products and services targeted to them. It’s also important to separate a membership program like this from a print subscription. The membership should be valuable enough that you don’t give it away to all newspaper subscribers for free — but instead is packaged as part of a larger offering with additional fees.

The other organization that could jump in on the local membership program would be the YMCA. Ys have a huge membership base of over 20 million members, and the local branches already understand that people join for one reason (say a gym to work out in) but stay for other reasons (e.g. programing or childcare). Having a variety of services packaged under one product is key to their success. The only thing they really haven’t done much is to branch out to work with other businesses and local organizations to make them part of the membership.

Most YMCAs haven’t done this because they don’t need to — they have strong memberships in their community because they offer valuable services. Meanwhile, newspapers used to have a service that was in demand; but as that demand decreases, it’s becoming increasingly important that they diversify their revenue streams.

Newspapers could potentially find more revenue in membership programs than from the SMB marketing services that many are jumping into. Instead of trying to get more revenue out of local businesses, it’s possible that newspapers could do better if they look to their core audience — families in the community — and offer new products and services that they need.

Matt Sokoloff is a 2012-2013 Reynolds Journalism Institute fellow working on a project to help local independent websites and bloggers gain additional revenue opportunities. His background is in building digital products for media organizations. Read more about his current work here and respond in the comments or to or @MattSokoloff on Twitter.

  1. March 22, 2013

    AARP and AAA are nonprofits. Check out the new business model for reader-owned news co-ops at One on-line site — the Hawaii Independent — has reincorporated as a co-op, and one community newspaper is considering conversation as well,

  2. March 22, 2013

    Very insightful, Matt. And in fact, The Day in CT does something like this with their Passport program, which we review in-depth on our site.

    1. Matt Sokoloff
      March 27, 2013

      Thanks SubSite gang.

      I think that what The Day is doing is great. However what they are doing is offering a perks program and not trying to establish themselves as a local membership organization. Here are a couple of areas where they fall short of a LMO:

      1 – I took me a while to figure out where to get to a page that tells me what membership options there are without creating an account.

      2 – They don’t really sell the rewards program as a key part to the membership. It’s just and add on. (No mention on the subscription page on what the perks program really offers and very little house promotions on the program)

      3- Rightfully so, they currently only have two rewards which are both 15% discounts to local arts performances.

      4 – The goal of a local membership should be to help folks understand the value of having a digital only membership yet less than 5% of The Day’s members are digital only (that’s great for a newspaper but not so great for a local membership organization). It means people are still just buying the paper. Something that we need to shift.

      I don’t mean to pick on them because I think any advancement is better than nothing and I think they are accomplishing what they set out to do…offer a perks program for subscribers. However if we want to become local membership organizations it’s going to take a much bigger push than what current papers are doing with “perks” programs.

      1. Richard Brest
        April 4, 2013

        Hi Matt,
        First off – awesome article. I am a company that specializes
        in newspaper loyalty programs and have worked with some newspapers out there
        “bundling” the rewards into a member concept with rewards as a
        component like the Post and Courier in Charleston, SC for example. Others that
        I provide programs for are using it primarily as an acquisition and retention
        tool. Point of sale (kiosk, telemarketers and inbound customer service centers),
        website and in-paper promotions are used to inform the readers of the program. The
        discounts are a wide variety and combination of local and national businesses
        of all types. Some are also embracing the program as an Advertiser outreach
        program to form a relationship with participating businesses by allowing them
        to post an offer for free and build that relationship into a value added
        service or create a relationship that hopefully will result into advertising
        revenue down the road.

        The member loyalty concept is something we believe strongly
        in as well as the technology end of things. I am surprised at some of the
        programs I come across that don’t allow the users to show coupons from a tablet
        or smartphone to redeem or rely on a physical card or a hard copy coupon or certificate
        that comes in the mail. As well programs that aren’t collecting the user
        specific data of who is using what, when and where, is missing out on a huge
        opportunity to know their subscribers, their buying habits and leveraging
        Advertising opportunities.

        Not all of the newspaper industry gets it right now but like
        other challenges in the industry they eventually will I believe. Take pay walls
        or metered online sites for example.

        Again – awesome article! I subscribed and look forward to
        reading more.

        Rich Brest

        1. Matt Sokoloff
          April 4, 2013

          Thanks Richard. I appreciate it. If you have a second shoot me a note I’d like to chat more.

  3. March 22, 2013

    Check out my related comments about the membership model for newspapers at NiemanLab:

  4. March 22, 2013

    Matt, I always enjoy your articles, they’re full of brass tacks and specifics. You’ve proposed a solution which echoes what the Banyan Project is doing, which I think is probably the future of local journalism. The problem it solves is a problem created by the newspapers themselves enabled by the universal openness of the Internet: The fact that people are willing to pay $4 a day for a coffee from Starbucks that they could easily make themselves at home, but are somehow outraged at being asked to pay $4/month for local news that they could never produce themselves. And which they are eagerly paying $45/month to Comcast to be able to access in the first place. Why are Comcast and Starbucks getting paid, and we’re not? Okay, so don’t call it a monthly “fee”, call it a membership, and add some branding sizzle to make people happy to pay it. The velvet rope approach to paywalls is sort of like this.

  5. March 22, 2013

    Articles like these are rare, sound solutions to save the quality local journalism newspaper newsrooms provide with profitable business models. From one former Sentinel employee to another, excellent work Matt.

    1. Matt Sokoloff
      March 24, 2013

      Thanks David.

  6. March 25, 2013

    Always interesting. Newspapers aren’t the only ones with this depth of potential, though. (And I am not just speaking about market-leading online sites like ours; around here, I’d think more of TV stations than of “newspapers.”) Meantime, Julie misses a point: From here in the espresso capital of the world, I can tell you the $4 latté many buy CANNOT be replicated at home, and it’s frivolous to keep tossing around the “why will ‘they’ pay for coffee and not for news?”. I’m not nitpicking – it’s an important point to ponder. You CANNOT buy a home espresso machine that produces what the multi-thousand-dollar machine at your favorite coffee shop creates. And you’ll probably scald yourself with the milk steamer. Plus, who wants to take 15 minutes fiddling with all that when you’re in a rush in the morning? Compare the convenience you pay for with the $4 latté to what you think you are giving people whom you want to charge people for online news and information – is it really comparable? what satisfaction are they getting out of it? what trouble are you saving them? – and THEN maybe we can have a serious conversation. I’m going back to my mug of home-brewed drip (with espresso-intended beans roasted by SBUX, purchased at Costco) …

    1. Matt Sokoloff
      March 25, 2013

      Agree Tracy. I think there are lots of organizations that can take advantage of their brand and knowledge to become local membership organizations. I used Newspapers mainly because they are already trying and investing in new revenue opportunities that are larger. TV stations for the most part just aren’t there yet. I also think that without the buy-in for corporate most TV stations will struggle to try something new like this but you never know. And yes I’m not a fan of comparing the price of an unrelated product to justify the price another. People just don’t think like that (for better or worse). We have to provide unique value if we want people to pay AND we have to market to them to convince them to pay. People didn’t just show up one day at Starbucks willing to pay those prices…Starbucks understands marketing….and coffee 🙂

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