From Donations to Subscriptions: How KB Independent Built a Sustainable Local News Model

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Today we're going to talk about a successful story arc of a nonprofit news publisher. This is the KB Independent, or Key Biscayne Independent down in Florida, and how they went from starting with donations for their local news publication, built an audience with the free registration, and then have iterated into both donations and subscriptions. This is a really interesting story arc. Welcome, Tyler from Newsletter Glue. Glad to have you back.

Yeah, thank you.

Awesome. So I'm just going to kind of intro this a little bit. Correct me if I'm wrong, but the challenge for nonprofits is they many times get focused on getting grants and donations early on in their life. And what they really need to do is to generate additional revenue. And so what we're going to talk about as far as today's podcast is how KB Independent, in their journey, really tackled this and what they're doing in their current phase of growth. And they've gone through this, this arc of donations, registrations, and paid subscriptions, and they're doing this all simultaneously. Their numbers are up. And we're going to talk about how, how they got there and what's going on today. How's that sound?

Let's do it.

All right, cool. Okay. Before we jump in, Tyler, you've been working with them closely. How did they actually start? Now, we did a. This is actually our second podcast on this particular publication. So we're kind of checking in on where they're at. But let's go back to the beginning. Did they have a traditional start?

They were a donation model only when they started. So, no. No memberships, no subscriptions, nothing like that. Yeah. And so as you can imagine, that's a challenge to maintain any kind of subscription or donation revenue when you're just asking people to click a donate button on the site. Most people aren't going to do that. Naturally, you'll have some super fans. Yes. But generally not enough to sustain the publication. And so you're left. You're left dependent on your nonprofit, donor funded startup founder or whatever. Wherever they're getting their funding from, the Knight foundation or whoever it might be, that's who you're sort of left reliant on.

On the donations? Yeah, on the grants.

Okay.

So are nonprofits leaving money on the table at this point, in your opinion?

For sure, for sure. So if you're not at least doing some sort of membership play, you're most certainly leaving money on the table. As far as recurring revenue is concerned, it doesn't have to be traditional transactional subscription based revenue. It can be membership based revenue that's a bit easier for nonprofits to implement in a legal way that doesn't get them tied up in this, you know, more for profit type subscriptions.

So the second phase of the KB independence journey from if you go back and listen to our first podcast, was this novel concept they came up with with the free registration. And that allowed them to really build their email list and paid subscriptions at the same time. Can you explain how that worked?

Yeah, it's a little bit complicated on how they set it up, but essentially you're getting one free article. On the second article, you're getting hit with the sign up for free. And that sign up for free registration prompt plan would only give you limited access, I believe. I forget exactly what they had. Maybe a day's worth of access or even X number of articles, at which point it would expire and you would have the choice to sign up as a member or continue that free access. And you basically have to renew that free access over and over and over and over again. And so the idea was, let's introduce some friction so that we can nudge people gently over to a paid membership type plan.

That was super novel and it seemed to work. So just to summarize that you could go to the site, you could read an article, then you'd have to register for free. After you registered for free, you'd get in and get more content, maybe full access, but at some period of time, it's a day or a week or whatever it is, you'd have to basically resubmit your email into another registration. Right? You'd have to sort of refresh and renew your free access.

Yeah, basically you'd have to renew that free access every so often in order to continue receiving their content.

And what I love about it is that it introduces a piece of friction. Right. And it's a friction in time. It's like, oh, no, okay, so I don't have access, I gotta go and refresh my access. Okay, which is free. And, and, and free is good. And so they do it. But at some point some people decided to pay to not have to refresh their access. Is that, is that essentially what happened?

That's right. That's right. And the free access renewal isn't something they were like putting front and center on their subscribe page. It was a tiny link within their FAQ on their subscribe area. So it wasn't something they were heavily promoting. People still found it. You better believe it, they found it. But, but not everyone. And some people would go through that, that cycle of having to renew and renew and renew and eventually they would just say, hey, you know, it's worth the 99 bucks or whatever they're charging for, for membership.

Right.

To, to stop this cycle.

Right? Yeah. It's amazing how people will pay for convenience. You know, whether it's an ad free plan or just something to make it, you know, easier on whatever experience you're having. People will pay. Especially in local news. Right? Like you, you, you have, you're building a community. People live there, they want your content and they're willing to give you money for sure. Whether it's subscription required or whether it's donation, they both work. Okay, so let's fast forward to today and what's happening because what's interesting is this has now morphed a bit from a sort of free registration, let's make a little annoying re registration process to trigger paid subscri to actually having free content but also having member exclusive content that you can't get to without a free registration. Do you, do you want to tackle how that is set up at this point?

Yeah, so they've got a bit of Associated Press content on their site that is relevant to Florida typically. And then they also have a lot of hyperlocal key Biscayne content. And so what they've done, they've sort of iterated their setup to AP is always free and the hyperlocal stuff requires you to go through that pre registration and eventually you'll have to become a member to continue receiving that content. So that's in a nutshell. They've, they're making a decision on the local stuff. You're going to have to be a member to see. But hey, we've also got free content. There's always free content on our site and that's, that's their current setup.

And is it working?

Yeah, it sure is. People do value their local content and so while they do read the AP content and there's quite a bit of eyeballs on that, the, the local stuff is generally what tips people over to wanting to become a member. In this case for sure.

Now once I'm on the site here and if I click on this, I believe this might be A. Yeah, political article. What I notice as well is that there is still a free registration on the free content.

That's right. And that's key. That's key. This is not a, this is not a lock it down, all free content and forcing people to pay for it right away. We still have the free registration on that content. We're still collecting email addresses off of that content. But over time this free access does end and then you will be nudged to sign up for a membership plan to continue with this hyperlocal content.

So what I'm hearing is that even on the ap, quote unquote free content, you still have to register to get access to the free content. So that builds their email list for sure.

For sure, yeah. Why would you do that? Why would you just make it completely free? You know, people still want to read it, right? You know, if they want to read it, they'll give the email for it. So there's no need to cut that off. And you know, even though you're giving it away for free after they sign up. So.

Yeah, well, I think if you're listening to this, especially as a local news publisher or really any publisher, and you are giving away free content in any category, then this is what you need to do. You need to install a free registration the same way KB Independent is doing, so that you can at least capture an email address in exchange for having access to all your free content in your content category. And why, Tyler, should you be building your email list?

Well, let me just really quick just say that often publishers think they know which pieces of content that their audience prefers to read. And your audience will most likely surprise you on what they're willing to put their email address in for in order to see something. So don't assume that they'll do that on X or Y content. But yeah, the reason that these email addresses are so important is so that we can remarket them newsletters every single day, hopefully. And putting your brand in front of them and then hopefully driving them to sign up for a paid plan over time. So it's just sort of this ongoing blitz of, you know, brand and content and look how great we are, look what we do. And nudging these free registration users over to a paid plan.

Absolutely. The email is your direct sales engine. It is your best direct marketing tool. You are sending your email content and sponsors into other people's inboxes. They don't have to go to your website. They're getting it. It's direct sales. It's the best marketing tool you have in your toolbox right now. And so you want to aggressively build that list. We see local news publishers, magazine publishers, all types, increasing the cadence of their email newsletters because they're getting, they're getting more. Higher level of subscriptions, higher level of engagement. The brand is like you mentioned, is in the box. It is a big key to the success of subscription revenue. Yeah.

And then ultimately you're less reliant on social algorithms, Google algorithms. Any other thing that might change that you have no control over. So one thing you do have control over is creating this free registration and getting folks to sign up. Build, build the list, make that your direct marketing powerhouse and grow your subscriptions.

Bingo. Take control. Okay, so then we have some, the premium only content. So I'm just gonna go, let me just go pick an article here, maybe on a crime, and then that one's free. Do you happen to know what might be in the paid department?

Well, even the paid content at the local level still has a free registration component. So again, it doesn't matter which avenue they're coming in. We still want their email address. And so they just might get more AP content for free within that free registration than they otherwise would with a paid plan.

So that's an important nuance. So even on their premium content, it's still metered and so that they can capture the email as the first step to engagement. Right. Get them on the list and then send them back. And then once they're registered, I will reveal my already registered browser here. Now I'm logged in. So now I'm a free registered reader and I'm popping around to the stories and let's see, I got this one. And let me just go back to. Don't know which one's going to be.

I don't either.

Paid. Here we go.

Okay, There you go.

And when I was looking at this earlier, I noticed that I was running into this, the, the paid subscription message or nag pretty frequently, which is great.

Yeah.

So here it is. You've reached subscriber only content. So now I'm logged in as a free registered reader. I gotten the subscription, the paid subscription message and I'm being nurtured down this funnel. Right. This path. Right. I've gone to the site, I've gotten some free content, I've registered, Yes, I get more free content, but now I'm hitting more the original content. It's the subscriber only stuff. See my options. So let's just hop over here real quick and take a look at what the Options are. One thing I really, really like about this landing page is that there is a singular focus on their main promotion, which is essentially discounting time over money. So it's three bucks for your first month. Great. You get a little bit of a break here, but then it's going to renew at the $10 per month thereafter. So it's actually discounting money over money. But it's a sort of a classic, classic renewal. Would you recommend discounting time, in other words? Maybe $10 for three months versus $3 for one month.

For sure. Yeah. I'm a much. I much prefer publishers to do $10 for let's say two months or three months or even four months and then renewing at $10 per month, let's say after that trial period. So you're not, you're not, you're not discounting necessarily the product. You're just giving some free trial time to try it out and to make sure that you know you like it. So versus the 99 cents for three months of access, which is completely ridiculous that we often see throughout, you know, regional and national outlets.

Yep, agreed, concurred. And it works. Now there are a couple other options if we keep scrolling down that, which is interesting. So you have a, you have an annual plan, which is great. You have a news Guardian which is essentially asking for those that can afford to really support the publication. I was reading in the FAQs that as a news Guardian you actually get to, once a year you get to request an article that you want to have written about some particular local topic. I thought that that was a pretty cool. It's not on here, but I did read it in the FAQs, thought that was a pretty interesting idea. And then here's just the promo that's above. Now I will say that when you get into subscription revenue. And so you know, here we have, I like this, you know, you got this red button subscribe up top and you have sponsorship call outs. And I assume there's a, there's a donation call out somewhere around here. What you, what you unlock with subscription revenue are a couple other things, like gift subscriptions, right? So when you start, if you're just doing donation only, there's really no such thing as a gift subscription. You basically go in and you donate or you go and promote donations. But once you start unlocking paid subscriptions, then me as a paid subscriber, I may and I can be targeted appropriately decide to give a gift subscription to someone else. And that's a whole new revenue stream that Kind of branches off of paid subscriptions that you don't really get with donations. The other thing you get is that you're unlocking with paid subscriptions is group access. Right. So I noticed that the keybiscane was, was promoting group subscriptions as well, which I don't know if that was down here. Here's the gift subscription. And then somewhere I saw group subscriptions. And so if you have like local groups, organizations, government, maybe it's a lot, the local libraries, schools, maybe even cafes, Panera Bread, you know, whatever, you can unlock a whole new revenue stream with paid subscriptions by getting groups of people access to your content. Something you can't really do with a donation model. So that's another sort of unlock a branch from the paid subscription revenue.

I do think they have sponsorships in their newsletter which if you're not doing that as a publisher, if you're not utilizing your newsletter for ad placement, and I don't mean sending a newsletter that only has an ad and nothing else. I mean placing ads within mixed around your content in your newsletter, you should be looking at that as, as an option. But yeah, I know they do have some sponsors on their site.

Yep. All right, sounds good. Well, let's, let's. I want to just wrap this up with a question about. You know, we had talked earlier and you'd mentioned that their numbers were up from when they. From when you have engaged them. And I know you work with quite a lot of news publishers and they have, you know, some of them are donations, some of them are subscriptions, some few are a mix like kb. How does this model of sort of donations with this now paid subscription content, how is it stacking up versus sort of the donation only model or maybe a subscription only model. Do you think it's working for sure?

It certainly outperforms a donation button on the site only by far when you compare to when they first came on board. And I would say what they're currently doing is more in line with traditional subscription based for profit publishers that we work with. And so the numbers are getting closer to what you would typically see in a community of their size. So if you're a nonprofit and you're looking for a way to generate some recurring revenue, but you're not quite sure how to do that as a nonprofit, KB has certainly, I think unlocked something here.

Awesome. Tyler, thanks so much for your wisdom. Great intel. Hopefully it's helpful. If you guys have specific questions, please reach out to us. See you next time.

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