Journalism is, after all, the news business, and those pursuing an editorial career must equally embrace the second word of this pseudonym, despite the symbolic barrier. At The Daily Collegian, a proving ground for generations of students, there was a literal wall between the business and news divisions in both Carnegie Building, which housed the paper for decades until 1990, and in James Building, located in downtown State College and where the paper called home until this year.
Ironically, the upcoming demolition of James Building marks an end to that divide. The Collegian newsroom will move soon, and eventually into a space in the state-of-the-art Bellisario Media Center, which is designed to facilitate collaboration between students across all communications majors and help develop the next generation of great digital storytellers, when it’s completed in 2020.
That culture of separation “is an old idea that doesn’t stand up,” said Krystle Kopacz, founder and CEO of Revmade, a company that develops audience-centric content and strategies for associations, brands and publishers. In 2016, Kopacz (’07 Journ) started the company with the idea of helping media clients diversify their revenue streams through better editorial and advertising products, including branded content.
New business model
As a Penn State student, Kopacz favored the courtroom over the boardroom, craving the adrenaline rush of covering trials and surprise verdicts while leafing through pages of freshly-printed legal motions. But the court reporting beat – a prize in any newsroom – was seldom available to a new hire, and least of all, a recent college graduate.
“You couldn’t get that job for 20 years. I couldn’t contend with having to climb the ladder for that long,” Kopacz said.
As her peers set their sights on livable salaries at daily newspapers, Kopacz did something bold, accepting her lowest-paying job offer.
“My parents thought I was insane,” she said, reflecting on her decision to join an online healthcare news startup near Washington, D.C., as a web producer. The job involved managing a group of freelancers and editing their work for clarity and intended distribution — from search engine optimization to social media and email marketing.
“I’m so glad I did it now,” Kopacz said. “I prioritized learning and advancement early on over money.”
In 2010, Kopacz took her new expertise – now classified under the umbrella of “audience development” – to Atlantic Media, a Washington-based print and online media conglomerate. Her first task was growing a customer email database, leveraging tactics including onsite promotions and email prompts on popular articles and special reports, with the simple goal of getting to know the reader.
On reputable news websites, it’s difficult to click a few links without eventually hitting a pop-up form touting the opportunity to “learn more,” “get the top stories every morning,” or to “make your inbox more interesting.” Supplying an email address allows audience development teams to identify a reader, track their viewing habits and serve them more engaging content. Eventually – publishers hope – readers might pay for what they’re getting.
This concept behind email marketing traces its beginnings to 1978, the year Gary Thuerk, a marketing manager at Digital Equipment Corp., sent an email promoting his company’s products to 400 users via ARPANET, an early version of the internet. Like the high-waisted “mom jeans” of the same era, email, too, is back in vogue, making its mark as a more valuable tool than ever for keeping journalism viable.
Working in a business-to-business division of Atlantic Media, Kopacz helped launch Defense One, a website tailored for defense and national security professionals, as well as Route Fifty, a site focused on technology and innovation in state and local government.
Both sites serve relatively niche audiences, offering hyper-relevant information and updates readers can’t get elsewhere. At the same time, news outlets prioritizing general coverage and politics stare down a bigger challenge in determining what consumers will pay for. In doing so, they’re turning to a concept built on exclusivity and perfected by fraternal organizations, country clubs and the AARP: membership.
Making membership matter
At National Public Radio, members donate to local stations in return for a T-shirt or a tote bag combined with the feel-good notion of supporting a shared mission.
The Guardian, a British newspaper, revamped its membership program in 2016 and began requesting donations with an emotional plea tied to the current political climate.
“At a time when factual reporting is critical, The Guardian’s editorial independence is safeguarded by our readers,” read a pop-up on the site in March 2019. “If you’re able to, please support The Guardian today.”
The Atlantic, at more than 160 years old, joined the ranks of paid membership models in 2017 with the launch of The Masthead, a premium offering appealing to its die hard readers.
“I had never seen as hardcore of a fan base as the fans of The Atlantic,” said Andrew McGill, a Penn State 2010 graduate in journalism, who is now a senior product manager for the D.C.-based publisher. “On the newsroom end, we wanted to find a way to really engage those people and give them stuff they wanted. On the business end, they saw a market for new subscriber revenue.
“On the newsroom end, we wanted to find a way to really engage those people and give them stuff they wanted. On the business end, they saw a market for new subscriber revenue.”
McGill serves as a liaison between the news company’s technology, marketing, editorial and sales departments in the hope of cementing the success of digital projects.
“It’s one of those classic hard-to-explain jobs,” he said. “I am making sure we have the trains running on time – and that we have trains at all.”
The role wasn’t necessarily on his radar when he graduated from the University and started a reporting job covering school districts for the Allentown Morning Call. Through self-taught coding skills, McGill started creating interactive graphics for the newspaper’s website, later moving to a position at the Pittsburgh Post-Gazette creating web-exclusive experiences.
After joining the politics desk at The Atlantic in 2016, McGill decided to combine his editorial and technical skills into a role on its product team, which coordinates the build-out of the newsroom’s digital presence.
The Masthead, he said, evolved from surveys and discussions with panels of readers that focused on what The Atlantic could offer to become more valuable.
“From there, we very quickly got the sense that people wanted to have greater access to Atlantic writers. People wanted to have deeper dives into policy, and people were interested in talking to each other,” he said.
Many were eager, he added, to support The Atlantic beyond a purely transactional magazine subscription.
“If they could send us more money to fund good journalism, they would do it,” he said. “They just didn’t have a way to do it.”
McGill and his team plunged right in, adopting the lean startup mentality of launching a “minimum viable product” with just enough features to collect feedback and data on user interaction.
“We wanted to get something up and running pretty quickly and put it in front of people to see how it went,” McGill said.
The Masthead initially launched at a cost of $100 per year and included a digital subscription to the magazine, a daily weekday newsletter, access to a members-only Facebook group, event discounts and conference calls with Atlantic staffers.
“We learned, first off, that people did not like engaging on Facebook,” McGill said. “That was a deal-breaker for some of our members, so we moved to an internal forum format.”
The team also learned to prioritize quality over quantity.
“Five newsletters a week turned out to be too much,” McGill said, adding that the conference calls – popular with a small portion of members available at a specific time – pivoted to written Q&As.
After one month, The Masthead’s membership count was reportedly in the thousands, according to Digiday.
While memberships have created a new revenue stream for some media outlets, others benefit greatly from maintaining a paywall in which their products can only be obtained by paid subscription.
Among the leaders in that group is The New York Times, which even offers separate subscriptions for cooking or crossword puzzles. Both include digital apps and monthly fees in exchange for exclusive features. These non-news offerings comprise an increasing share of the company’s growth.
In its 2018 earnings report, the Times announced it had generated $709 million in digital revenue, shy of its 2020 goal of $800 million. Executives decided to set a new goal of more than doubling its current subscribers, hitting 10 million by 2025.
While subscriptions are nothing new, the increased reliance on loyalty as a revenue model is a far cry away from the journalism of the early 2010s – an era where clicks were king and Buzzfeed ruled the world.
“I do think that the economics of the internet being so based on volume automatically forced journalists to think about popularity versus news value,” Kopacz said. “That’s why the pendulum swinging back toward membership is a good thing.”
‘All about the math’
The traditional digital advertising model – getting as many eyeballs as possible on pages to sell ads – faces new challenges.
Digitally-native publications, once heavily dependent on Facebook, report declining traffic numbers as the social network continues to implement algorithm changes that prioritize “friends and family” in its newsfeed.
“I think journalism is being bucked by these big trends in technology and society and information,” said Lee Ahern, an associate professor of advertising and public relations in the Bellisario College. “On one hand, publishers are getting squeezed. The revenue that they can get out of their content is going down.”
Some point fingers at the so-called “Facebook-Google duopoly.” Digital research firm eMarketer predicts that by 2020 these two tech giants, combined with Amazon, will control more than 60% of digital ad spending. This would put a squeeze on publishers to compete for what’s left.
“How do publishers survive in an era where they’ve lost control of their content?” asked Ahern. “The dynamics of this industry and what’s powering it are changing. If it’s me, I’d want to know what the heck is going on.”