Everything I've Learned: Reader Funding and Paid Memberships

Photo by Michael Giugliano from Pexels

This installment should be titled Everything I Haven't Learned, because it's going to raise more questions than it answers. As I write this, Longreads (now 11 years old) has launched its latest Member Drive, to raise another $50,000 for our story fund.

We're now part of a larger tech company, but our product must push to be self-sustaining. Given the volatility of the advertising business, reader funding is still our best path to making that happen. Over the past five years, our story fund has helped pay for reporting and essays from thousands of writers, and it has allowed us produce projects like Leah Sottile's hit podcast Bundyville.


Back in 2013, the first Longreads membership drive was almost our last one. I was in terrible health (I had not exercised regularly in over 15 years), my relationships were suffering, and I was failing at my day job while trying to maintain a side project at night.

Longreads had become a beloved internet community, which made me feel immensely proud. But in real life, it wasn't making enough money to survive, and it was swallowing me up. My friends and family were urging me to shut it down. I knew they couldn't see in Longreads what I saw, but they were right: something had to change.

Thankfully it did, but not before I learned some hard lessons about memberships and reader funding. Longreads still has not solved it definitively, and the technology and best practices are constantly changing. But we need to talk more about what it means to raise money on the internet, what you need to do to make it work, and how to do it in a way that it doesn't crush you physically and mentally.

I wrote a little bit about memberships last year, but I was inspired to expand on it following recent posts from Edith Zimmerman (who's writing about whether she should charge for her fantastic newsletter), Dan Oshinsky (whose Inbox Collective specializes in email strategy for publishers), and Craig Mod, whose How to Run a Paid Membership is an excellent in-depth guide to setting up a membership program—from the technology to the tiered offerings to the physical perks that come with it.

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I made a lot of mistakes along the way, so I'd like to share them here. Nine years later, I'm more convinced than ever that freelance journalists and small publishers should use reader funding to support their work and build sustainable businesses for themselves.

The Breakable, Unmaintainable Perk

I started the Longreads Membership in 2011, after a couple years of trying and failing to attract investor interest in this thing that I had created. Companies like Byliner came later and raised millions of dollars off the same premise as Longreads. (Lesson: The world is full of blessings in disguise.)

It's easy to get mired in the details of a paid membership program, to start dreaming up all the cool T-shirts and stickers you'll send to your fans as a personal thank you. But there is a real danger in doing too much, too soon.

The original Longreads Membership was basically a PayPal button on a WordPress site. PayPal still remains one of the best ways to get started with a membership. It's a trusted payment platform, and it's not going to disappear overnight. (Lesson: Be careful who you let between you and your audience. More on that later.)

The original Longreads Member offerings were:

  • Support us for $3 a month

  • Support us for $30 a year

That was it. For every $30 subscription, I sent them a souvenir Longreads mug and a thank you note. Members also received access to one exclusive story per week—these were usually online-exclusive reprints from magazines and book excerpts. (Longreads originals were still a ways away.) Our website didn't have a paywall, so I distributed the exclusives as password-protected ebooks, linked from a MailChimp newsletter. Every week, members would receive a link to a password-protected WordPress page with a MOBI file (for Kindle) and EPUB (for iBooks).

None of this worked particularly well.

A lot of the mugs broke during shipment (lesson: nothing breakable), so I discontinued mugs and switched to tote bags. (Another lesson: shipping costs—particularly international shipping—can eat up your entire membership revenue if you're not careful.)

The Premium Paradox

What’s more, "premium content" simply did not work for driving memberships, and I still don’t believe it will work for most general interest publications. Over a two-year period, only one exclusive drove memberships for access, and it was a business story—a reprint of Fortune's cover story about the rise and fall of JC Penney.

What worked better were emotional appeals to support Longreads' mission and help keep our service running. People weren't subscribing to Longreads for access to a specific story—they were subscribing because they wanted it to succeed.

Here's the other thing about paywalls: Our members hated the reading experience. I had built a complicated hack, complete with password protected ebooks and detailed instructions for importing the book onto a Kindle. But our readers wanted to access the stories easily on the web, and they wanted to share the stories with their friends.

We have previously considered a metered paywall, and I wouldn't rule it out in the future, but many writers hate the idea (they want their work to be seen!) and I believe it would require us to change our editorial strategy—to become more newsy and publish more frequently. Our experience with the member exclusives leads me to a bigger hypothesis that I still haven't fully tested, which is that if you want to paywall content, it needs to be super useful or applicable to work and business. Simply putting a paywall on general interest storytelling won't be enough.

But our specialty is storytelling that offers readers a much-needed break from the news cycle. Given our size, publishing frequency, and mission, it makes more sense to appeal to our readers on an emotional level.

In the end, paywalled content was hostile to the exact group of people I wanted to keep happy—the subscribers. Eventually we ditched it entirely.

Who Will Pay You? And How Much?

I overestimated how many people would pay to support Longreads. But I underestimated how much people would pay.

By only offering a $3/month and $30/year option, we missed an important opportunity for our most passionate fans to support us in a bigger way.

Once we offered one-time payments and pay-what-you-want options a couple years ago, we started receiving $1,000 payments from folks who truly loved Longreads. Roughly half of our monthly revenue comes from one-time contributions.

One-time payments are a mixed bag. On one hand: hooray, cash flow! Your audience appreciates not being tied to a recurring subscription, and they are more likely to contribute more generous amounts of money.

On the other hand, they're only paying you once, so you are apt to get spikes in payments. This makes it much harder to forecast the long-term health of your business. Eventually, if you want them to keep supporting you, you've gotta keep asking them. Hence our frequent membership drives, which are similar in structure to public radio.

Right now, Longreads promotes a $5/month, $50/year, and $100 one-time option at Longreads.com/join. With any of these options, you can customize the price and pay what you want.

If you spend $50 a year or more, you get a free tote bag. And all members get advertisements blocked on Longreads.com.

The core value proposition of the Longreads Membership has remained unchanged since 2011: When you contribute money, you're supporting outstanding storytelling on the open web.

Membership Isn't Forever

Kevin Kelly once said you only need "1,000 true fans" on the internet to succeed. Remember the "long tail" of the web? It was a similar idea—thanks to the internet, niche communities could unite people around the world, then grow and thrive and even become profitable. But as Facebook and other social media networks took over, the viral blockbuster culture returned.

I do still believe in Kelly's core message, which was that you don't need to be enormous to be profitable. But "1,000 true fans" also fails to capture the transient nature of fandom. Even if you only need 1,000 true fans to pay you, a good percentage of them might only pay you for a few months. Some true fans will simply run out of disposable income, or their credit card will expire and they won't realize they stopped supporting you. Or maybe they won't like your next album or magazine story or podcast.

At Longreads we keep about 75% of our recurring members for at least a year. Over the course of our nine-year membership history, tens of thousands of readers have contributed over $1 million. But our *active* membership in any one year is much lower. We have to do more work to communicate with them about where their money is going and why their continued support is necessary.

This is all to say: reader support must constantly be earned. Plan for customer churn.

When Technology Works Against You

Speaking of customer churn: Let me tell you about the time Longreads lost 1,000 members in the span of three months.

In the early days of Longreads, we signed up to process memberships using Amazon Payments in addition to PayPal. MailChimp offered this wonderful "premium newsletter" integration where people could sign up for Longreads and with a one-click pay button powered by Amazon Payments. Then they would be signed up for our exclusive member newsletter.

A few years later, we received notice from Amazon Payments that they were shutting down the feature. We had thousands of members signed up through this system, and we had just a few months to move our customers to a new platform. We had thought Amazon was a reliable service—after all, Amazon wasn't going anywhere, right? What we hadn't bargained for was that Amazon losing interest in being a payment provider for small publishers.

Worse yet, the date for Amazon Payments service to shut down seemed to keep changing, and if members' cards expired during this period they were simply dropped from the membership with no warning. We lost over 1,000 members during this period and had to work overtime to communicate the changes, create a new membership system, and convince people to start over from scratch and re-join Longreads via PayPal or Stripe.

If Longreads were still an independent business during this incident, that would have been the end of the company. Thankfully, we were part of a larger company by then (Automattic), which allowed us the time and resources to rebuild our membership system.

Are You Actually Ready to Fundraise?

If you've donated to a political candidate, you've seen the most extreme example of what it means to publicly fundraise for your work. I receive dozens of emails and texts a day from the Democratic presidential candidates.

I'm fascinated by the sheer level of desperate emailing. Is it really effective to bug people this often?

It's instructive to see those fundraising emails, because it does show you what lies at the heart of internet fundraising. To be successful, you need to be willing to ask the internet, early and often, to step up and support you. I learned this lesson with my first Member Drive.

Let's go back to 2013—that moment when I hit the breaking point. The membership had been running for two years, but it was a slow crawl of subscriptions.

At the same time I had decided that I could not keep running Longreads on nights and weekends—it was hurting my relationships and my health, with no end in sight. Ultimately, I decided I was either going to raise enough membership and advertising money to make it my full-time job, or I was going to sell it.

If I failed to accomplish either goal, I would shut it down.

In October of that year, I announced the Longreads Member Drive. The stakes could not be higher. I announced that Longreads needed to reach 5,000 members to stay alive, and to stay independent.

The community outpouring was overwhelming. It was both the best and worst month of my professional life, to have Longreads' survival at stake—and also to have thousands of people whose work I admired and respected, speaking out on Twitter and contributing to keep the site alive.

By the end of that month, we had welcomed 2,500 new members. A great number, but only half what I needed to take Longreads full-time.

I had to sell the company.

The End of One Chapter

As it turned out, I would get more chances to try again over the next seven years. Automattic, parent company of WordPress.com and Tumblr, acquired Longreads in 2014. Since that time we have operated as an in-house publisher. Part of our focus is to continue to experiment with reader funding and membership models for publishers. Our current system uses WordPress.com's Recurring Payments, created by my brilliant colleague Artur Piszek.

To this day, the Longreads membership operates a lot like those public radio member drives. We work to raise awareness during a focused 2-4-week period, and we set a cash or member goal that we want to reach.

Last month, Longreads earned its fourth National Magazine Award nomination. Longreads Members helped make that happen.

My Recommendations

Baked into this story is a whole lot of luck and privilege. I was able to take risks with support and encouragement from my wife, whose job was providing our healthcare during key early moments. (If you want to make the startup argument for Medicare for All, this is it.)

In the end, paid memberships present a Catch-22: To build a paid membership you first need a large enough audience and community. That's a lot of unpaid labor upfront with no promise of reward. I ended up committing to an idea (curating #longreads) that would not take so much of my time that I couldn't work a day job, but would still allow me to slowly grow and build a base of followers over several years.

Still, even after several years, I was drained and I came up short.

But, but, but. What if I had been more disciplined and realistic about how much time I should spend? What if I had been sleeping and exercising and eating better? What if I had fiercely protected my private time to put my relationships ahead of my side hustle? What if I wasn't living in the most expensive area of the country, the Bay Area? In retrospect, a lot of factors could have led to indie publishing success.

This is why I love Patreon, Venmo, or a simple PayPal button on a website as a place to begin your journey. If you use the right language, and focus on a mission instead of a specific product, you can set up an optional membership to fit your work as it evolves and changes over months or years. You might be doing a newsletter now, but what if in a couple years you want to move to YouTube or some other new platform? Or maybe hosting live events? As long as your work adheres to the mission that your readers are paying for, you have flexibility to bring them along with you.

If you are a freelance journalist, storyteller, artist, or publisher, you should absolutely start raising money from your community. The sooner you start, the sooner you'll be on the path to creative and financial independence. Or at least a little extra side cash.

If I were starting all over as a freelancer today, I would set up a minimalist Patreon page for subscriptions, and then something else to collect one-time contributions. Maybe it's a PayPal or Stripe button to my website (using a plugin like Memberful), or maybe it's just a Venmo account. I would focus on monthly and yearly subscriptions, with a pay-what-you-want one-time option.

I would NOT tie payments or membership directly to a newsletter, but instead to the broader work that I do. Use your newsletters and social media accounts to promote the membership, but don't make them the central product of your membership.

I would NOT paywall content. It's too complicated to decide what should be paywalled, and it misses the entire point: people want to support you because they like you.

I would NOT offer physical perks. People are paying you for your work. They are not paying you so that 50% of their money will go to T-shirts and shipping costs. The world does not need another tote bag. A thank you note is more valuable than any water bottle.

The Reader Funding Toolkit

Basic:

  • For discovery: Social media (Twitter, Instagram, YouTube, et al.)

  • For legitimacy and search discovery: Website (WordPress)

  • For engagement: Email newsletter (Mailchimp, Substack)

  • For payments: Patreon for subscriptions + Paypal or Venmo for one-time payments.

Getting more serious:

Membership management (Memberful, or WooCommerce Memberships + Subscriptions)

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I hope my story is helpful. If you're thinking of starting a membership, or already have one running, reply to this email and tell me about what you've learned. I'd love to feature you in a future installment of the newsletter.

Now get out there and build your dream! 🙌

Further Reading


Thanks to Jacqui Shine for her thoughtful edits.

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