Communiqué 23: Daily Maverick and the case for a membership model in journalism
What can South Africa's Daily Maverick teach us about the membership business model?
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Daily Maverick and the case for a membership model in journalism
One of the biggest questions journalism struggles to answer today is how it’ll sustain itself. The era when journalists and publishers didn’t have to think too deeply about business models, when they could just do good work, write their stories, publish them, and subsidise operations with advertising revenue is ebbing away.
For many decades, newspapers, magazines, radio, and television were the most prominent mediums of mass communication. They dominated the share of advertising spend. If companies wanted to connect with customers, they would often do so via these mediums.
Then the Internet and smartphone entered the equation, handing over power to a new set of players. Suddenly, the once-dominant players were no longer so. Power was taken away from one empire and given to another.
In addition, advertising technology became more accessible, and any major company with a suitable customer base and reach could build out its own advertising business.
As the Internet, smartphones, and advertising technology improved, so did the allure of these new platforms. Companies could reach millions of customers on Facebook, Google, and other dirt cheap digital channels. Measuring the reach and impact of their advertising became more affordable too. Consequently, companies could spread their ad spend across more channels, with less of it going to the media companies that produced journalism.
Google and Meta (formerly Facebook) are now the two biggest advertising companies globally, and neither one existed 25 years ago.
In 2021, Alphabet, Google’s parent company, banked $257.6 billion in advertising revenue, up 41% from 2020. Meta generated $114.93 billion, and Amazon, which we typically don’t associate with advertising, banked $31 billion. Even Walmart made $2.1 billion.
The point is that the competition for advertising dollars is at an all-time high, and journalism is one of the industries hardest hit by this development.
One region where this is having the most significant impact is Africa. Journalism has never really been the most lucrative business on the continent, even in its biggest economies like Nigeria, Egypt, and South Africa. But beyond its economic frailty, political dynamics are also at play. Across the continent, business success is largely influenced by proximity to political power. Robust journalism can’t thrive in such an environment.
There have been a few attempts to remedy this problem, including donor-backed journalism and subscriptions. But neither has proven to be a magic bullet, not that anyone thinks they can be.
Now and then, a business model springs up that provides a little ray of light on a gloomy horizon. In the case of today’s newsletter, it’s membership. More specifically, we’ll look at Daily Maverick’s membership model.
How Daily Maverick uses the membership model
“South African publication, Daily Maverick, understands this dynamic well. In late 2018, it launched a 200 Rand-per-month ($14.73) membership model, which now has over 8,000 members. Its content remains free-to-read, but the membership option takes things up a notch. It eliminates ads and gives access to discounted event tickets, members-only webinars with Daily Maverick journalists and editors, the ability to comment on articles, and exclusive newsletters. It also offers members Uber Eats and Uber ride vouchers.
While this may not be ideal, it still shows what is possible when the media is willing to move beyond advertising dependency and think more creatively about making money.”
In December 2008, with the world feeling the pain of a global financial crisis, Branko Brkic’s magazine, Maverick, went under. For those three years, it provided South Africans with hard-hitting journalism, much like Dele Olojede’s NEXT did in Nigeria. By 2009, Brkic had redesigned a new publication to mirror what he’d done before, but this time fully digital. The product? Daily Maverick.
For ten years, Daily Maverick struggled to find the right revenue model. First, the South African market is, in Brkic’s words, “already small to start with”. And while advertising is the perfect fit for many other media and content types, it’s usually at loggerheads with platforms providing the kind of journalism Daily Maverick does.
Putting stories behind a paywall was out of the question, mainly because it’s a disservice to the people who can’t afford to pay for access for one reason or the other. As a solution, Daily Maverick launched a membership programme that offers readers the opportunity to support the publication for a fee and get access to some benefits in return.
Those benefits include access to the Daily Maverick’s journalists, bi-weekly behind-the-scenes newsletters, ad-free reading experience, ability to share feedback and comment on articles, early bird registration and discounted tickets to events, always-on 10% discount at the Daily Maverick shop, and monthly Uber vouchers.
Daily Maverick now has over 13,000 members who pay at least $4.50 per month.
As I wrote in the previous essay, while the Daily Maverick’s design of its membership program may not be the most compelling, it offers a glimpse of what is possible when we dig deeper.
Digging deeper into the membership model
I find the membership model interesting because it’s the one that’s most symmetrical with my perspective on how journalism can become sustainable on the continent. I don’t think subscriptions are scalable (we have a few success stories but no more). Plus, they’re exclusionary and threaten to cut out a low-income majority who can’t afford to pay multiple times for content.
I don’t believe donations or donor-based businesses are sustainable either. The economic dynamics are far too arbitrary.
And obviously, it’s tricky for journalism to rely solely on advertising (even though it will remain the lifeblood of media for many more years). But membership? I think it’s worth doubling down on.
Styli Charalambous, Daily Maverick’s publisher and CEO, writes about this:
“Membership implies an exchange of value beyond a transactional gateway to content, and in our opinion is the hardest of the three models [including donations and subscriptions] to get right but carries with it the potential to be the most rewarding.”
The keyword there is “potential”. There are no guarantees of success. In “The subscription playbook”, I argue that in this market, providing content worth paying for is not enough. There has to be more. This is particularly true for journalism, mainly because the market has been habituated to consume heavily subsidised or free content. This behaviour is even more conspicuous when the content is from online sources.
The membership model can solve this problem if done right and scaled properly.
I base my argument for the membership model on two things. The first is that, given the economic realities of the media business in Africa, most people would rather not pay directly for content. However, they’re more comfortable doing so indirectly. There are, of course, some exceptions (Multichoice being the chief), but this is largely true across the continent.
Purchasing data subscriptions and buying the smartphone or equipment needed to consume the content already take up a huge chunk of income. A subset of consumers is willing to pay directly for the content they consume. But subsets are limited by definition. Nevertheless, even with this economic reality, it makes no sense to be defeatist and conclude that creating content that can pay for itself is not a worthwhile endeavour.
The other point is that, from time immemorial, people have paid for access to benefits that improve their lives. These benefits range from base things like food, transportation, leisure, and entertainment, to more sophisticated things like social capital, career advancement, and improved financial odds. Offer a person the chance to climb up the social ladder, get ahead in their career, or make more money, and see what they’d be willing to give up in exchange.
The membership model has the potential to combine these two facts of human behaviour and build a business upon them. After all, country clubs and trade associations have proven over many decades that this is possible. Why can’t journalism at least try?