Free: what membership organisations can learn from newspapers

Simon Jenkins wrote persuasively in yesterday’s Guardian about the future of the paper and of the newspaper model in general.  I read it online, for free, here.  It’s also in print, but that would have cost me 90p [the fact that I had to look this up exposes the last time I felt the need to buy a daily paper] and it’s this problem – "Why would you pay when you can get the same thing somewhere else for free?" – that he’s addressing. 

And the answer he provides is simple – “ensure that "the same thing" is not available elsewhere, that the product is unique”.

In reality, this means identifying that the ‘core’ business model – selling papers – is not actually what brings in money now that news can be found for free elsewhere.  Instead, he says, the Guardian should be concentrating on experiences – for which people are increasingly willing to pay.

This recalls the argument made by Chris Anderson (author of Free: the future of a radical price, which grew out of this Wired article) at a talk at the RSA earlier this year (you can listen again – for free – here). 

He stated that papers should, counter-intuitively, give away for free the most popular content and exclusives (the things which bring traffic and raise awareness). Instead, they should charge for the niche interest areas – otherwise known as the ‘Long Tail’ items (as discussed in Anderson’s earlier book).

Pricing disparities

This is the concept of the ‘freemium’ model – offering some (increasingly, most) of one’s products or services for free on the understanding that a small percentage of your users (Anderson notes that in most online communities it is around 1% of the total user group) will be willing to pay a premium for a specialised (or improved) package.  Anderson suggests that this is an increasingly natural – and therefore anticipated – model for users.

Of course, this is nothing new – it is something that membership organisations have been doing for some time. To take as a random example three organisations involved with the Future of Membership project, the Royal Academy of Arts has a Friends programme which allows you to visit all their exhibitions, yet the average punter can visit the Permanent Collection for free.  Similarly, membership of the National Trust enables you to visit properties year-round, but as a non-member you can still enjoy (for free), for example, walks on land that they own over paths they maintain.  And the very talk at which Anderson spoke was (like all RSA Events) free to the public, but made possible only by the existence of the RSA Fellowship, which brings with it separate benefits.  However, for some membership charities, it will pose interesting strategic questions: rather than a £10 annual membership fee, is it better to provide services for free, with isolated and specific membership benefits at a higher cost?

For charities, this model is effectively a National Public Radio rather than BBC model: a small number of willing donors supporting a wide community of users.  But surely there’s another word for users who don’t pay– freeriders:

free lunch doesn't necessarily mean the food is being given away or that you'll pay for it later — it could just mean someone else is picking up the tab (Anderson)

How do we, as membership organisations, get over the sense of the inequality of this system?  The answer is twofold.  First, we stress that membership is there to support an organisation’s charitable purpose; in other words, to provide those very services, free, to those who need it (and may not be able to pay – indeed, even to those who choose not to pay).  Second, we stress that membership offers something that money can’t usually buy: a sense of belonging.

You don’t get what you pay for

What Jenkins’ article accurately identifies is the fact that the concrete ‘product’ we think we’re buying – a newspaper, say, or software – is actually not the main reason we part with our money.  In effect we’re actually buying into a belief system (Jenkins shows that the Guardian can be perceived as a better brand than it is a product - “To pay was not to read, it was to join”) or entering a contract that if it goes wrong we can fix it.

This is something that most membership organisations know.  We may be saying, in economic terms, “pay to join us, and you get this range of benefits” (such as free or reduced-cost services; a quarterly journal; access to facilities), but what we’re actually saying is “pay to join us, and you’re a part of our club; you can say that you share our beliefs and you can feel part of something”.  Encouragingly, as time goes on and a member becomes more involved, the balance seems to shift more towards a sense of a transactional relationship (“what do I get?”) to an emotional and supportive one (“how can I help?”).

And we can develop this by offering, as Jenkins puts it “what the web cannot supplant, a paid-for exclusivity and an opportunity for a unique participative experience.”  With competition from free sources – and the competition is very real – the answer isn’t “how can we provide these services more competitively” (there’s not a more competitive price than free) but how can we provide services – and, more importantly, experiences – that our members can’t get anywhere else. This comes in the form of highlighting and providing for those other ways of valuing things than in simple pounds and pence – time, reputation, connections, positive experiences and emotions. And then things start to get interesting.

Last updated at 14:00 Wed 12/Aug/09.
AddThis Social Bookmark Button
View blog reactions

Recent comments

AuthorComment

Thank you for posting this article. It really resonates with some of the discussions that we have been having internally in NAVCA recently, and I'm aware that other local and regional infrastructure organisations are also reflecting on their own relationships with their members.

Katherine's picture

Katherine

Specialist Editor

* update *

Particularly interesting perhaps for local and regional infrastructure organisations is the relationship of local news (I wrote a bit on hyperlocal news here) to its readers.

Today local newspaper group Johnstone Press has started trialling a subscription model for its online content, with either trails to online news behind a 'paywall' or only limited amounts online, moving the reader to the paid-for hard copy.

Taking a look at the 'Have your say' part of the BBC's website on this story will give an indication of what some parts of the population feel about such models - perhaps early market research for membership organisations thinking of adopting similar ideas?

Katherine's picture

Katherine

Specialist Editor

A further update - an example of a successful paywall for local news just announced by the Guardian.

A related issue. With newspapers, the cost of the paper has always been heavily subsidised by the advertising. This has been taken to the extreme by the Evening Standard, which is now free. This type of model shows how members can receive membership benefits without paying the full cost (or possibly any cost) if there is a value to someone else of being able to communicate with that membership. With this type of model quantity or type (ie advertisers often like people with high disposable income) of membership becomes important.

Kathryn's picture

Kathryn

Third Sector Foresight

"Not all content is created equal"

Picking up on Barney's point about advertising, I have been reading a precis of some recent Nielsen surveying around how much people will pay for online content. I will talk about that in a sec, but an interesting side point is that a high percent would be willing to put up with more adverts in order to still get their content for free. Intriguingly, the 'western world' is the least willing to put up with this, no doubt due to our already high level of exposure of adverts throughout an average day. However, I think this could be worth thinking about for organisations as there don't seem to be many voluntary and community organisations who host adverts on their websites. The geographical disparity brings this debate back round to the age-old adage: responding to who your 'customers' are. In Asia Pacific, apparently, they would react more favourably to more adverts than in good old Blighty.

Adverts aside, what else did Nielsen discover about online content payment? There was a surprisingly high level of respondents prepared to pay for online content, or to pay more to get more. A key point is that there seems to be greater readiness to pay for content generated by 'Professionals', as opposed to other people who seem no different to the consumer. Hence videos and music have a high perceived value attached, which people would pay for; blogs the least (the irony being, this is arguably a Foresight blog!).

This opens up an interesting discussion around the tension between organisations continuing to position themselves as experts, while still engaging in the growing Web 2.0 world. Web 2.0 is about two-way engagement, bringing your consumers into the conversation and breaking down the authority-recipient traditional system. Do organisations investing in this run the risk of being seen as less of a Professional that a consumer would pay for their insights? The more discussion fora, the less money you'll get?

A tricky line to tread I think.

If you want to read more on the Nielsen report, have a look at 'What's your online content worth?'

Possibly another tangent ( I apologise for the way my mind works). I think there is a real issue here about experts and non-expert advice. It may just be about getting used to a relatively new medium but I am sure we will increasingly find ways to differentiate between expert (and therefore helpful) information and random views. The internet has made it easy to give everyone a platform to express views but equal opportunity to express views doesn't make these views have equal worth.

We have worked out how to sort these views in other situations. In written communications it is often easy to do this (even if it means sometimes judging a book by its cover). If you were in a pub or a party you could quickly work out who is talking rubbish. Likewise I imagine we will find ways to filter out the rubbish on the web. If not life will be like one long journey in a taxi.

However - if you do like the rubbish then I highly recommend you look at the 'Speak you're branes' website.

Katherine's picture

Katherine

Specialist Editor

Barney, Kathryn, I think your comments on the role of the expert are extremely interesting.

An argument I have been making (for example in the forthcoming Future Focus 8 is that membership organisations are - like the old-school newspapers - in a strong position to attract people who are willing to pay. As sources of information grow and grow, we are going to want to know what to trust, and are likely to be willing to pay for such information. As consumers, we are currently in a very welcome position where even authoritative providers offer information and services for free, but with the first movers - such as Murdoch's group - starting to create paywalls, this is unlikely to last long.

There's a lot of coverage of this area - take a look at http://delicious.com/katherinehudson/futureofnews for [an incomplete list of] links to useful articles.

I've been doing some work on making local newspapers membership organisations, on the basis that the cause of their problems is a double whammy caused by the downturn of their chief subsidy (local small and job ads) in the face of the interwebs at a time when many are labouring under a business model which needs them to generate excessive returns to the conglomerates who have leveraged themselves to the max in order to fund their purchase. This is hollowing out quality (offices close, reporters sacked, more churnalism), which in turns hits sales and bon's your ever decreasing circular uncle.

It's not unlike pubs where a lifestyle challenge (home drinking) is exacerbated by conglomeration (pubco leveraging) and concommitant quality dip (untrained landlords, high turnovers, scraping the literal and metaphorical bottom of the barrel). There's been several pubs opened using co-operative structures, most rceently three weeks' ago in Salford at The Star.

Join the discussion!

How will this affect your organisation? Have you considered it during your strategic planning? Can you share any interesting relevant links?

Log in or join for free to comment.