It is sometimes difficult for me to believe that we are approaching the five-year anniversary of The Daily Memphian. Some days it feels like it’s been just a few years. Other days, it feels like we’ve always been here in Memphis.
Five years later, we are now the largest newsroom in the Memphis area, with 40 full-time journalists plus 15 freelancers, along with another 15 people in tech, sales, marketing, audience and business.
From Day 1, we embraced a big editorial mission, covering everything from politics to business to arts to food to neighborhoods to professional, college and high school sports. All of it focused on Memphis.
Filling a news gap
That staff and that focus have led to steadily growing reach in the community, including 145,000 unique emails across nearly 40 newsletters and 450,000 unique visitors every month. Hundreds of thousands of people follow The Daily Memphian and our writers on social media. There are 18,500 households – representing nearly 30,000 people – who pay for a subscription to read our news.
We launched The Daily Memphian because of the gutting of our long-time local newspaper and a growing concern among so many Memphians, Memphis-based businesses and Memphis-based community organizations that the paper would disappear completely.
The paper didn’t disappear, but as is the case with so many legacy newspapers, it’s seen continued reductions, down to a newsroom of roughly 20 people now from more than 250 people in 2000.
Launched by philanthropy, but sustained by other means
We formed The Daily Memphian as a nonprofit 501(c)(3) news organization for one simple reason: We knew this would be an incredibly difficult business. Getting investors to put up $7 million to launch a local online news site would be a very, very tough sell.
But getting civic-minded people to invest $7 million in local news in Memphis was – while not easy – successful. Individuals, foundations, local businesses and readers all knew that Memphis needs a truly local news site. One that is based in Memphis. And only covers Memphis. A testament to the impact we’ve had is that we’ve raised another $6 million since launch to support The Daily Memphian, nearly all of it from local people and foundations.
As successful as we’ve been with fundraising, we knew from the beginning that securing The Daily Memphian’s financial sustainability would be inextricably tied to generating revenue from sources other than just philanthropy.
This means that, while in our first year more than 90% of our expenses were covered by philanthropy, this year we’ll cover nearly 75% of our expenses through subscriptions, advertising and sponsorships.
And we are working to reduce that reliance on philanthropy even more over the next two years.
In other words, although we are a nonprofit, we run The Daily Memphian like a business. (While I’ve been on numerous nonprofit boards, I’d never run a nonprofit before we launched The Daily Memphian.) We have to be disciplined about expenses. And we have to constantly seek new revenue other than philanthropy.
Subscriptions and advertising revenue
The most important source of earned revenue for us has been subscriptions. With some exceptions, virtually all of our news is behind a paywall. We charge $13 a month or $109 a year – a price that will increase as we go into our sixth year. We don’t offer “dollar-a-month” discounting. Registered users who want to try out our content get just four free articles per month. But some days, as much as a quarter of our new content is subscriber-only, meaning the only way to read those stories is to buy a subscription.
Why are we so focused on charging for content? Because the work we do has tremendous value. Because our journalists are not volunteers – they deserve a fair wage. And because maintaining a site like The Daily Memphian and expanding its reach to more and more readers is difficult and expensive.
We do also give free access to The Daily Memphian to schools, libraries and community organizations. We also make key coverage free, such as articles about local elections, COVID, and natural disasters. Most of our newsletters are free and include a great deal of local information every single day.
But to put it simply: Without significant revenue from paid subscriptions, we would not be able to fulfill our editorial mission.
And while there is an ongoing debate among national philanthropies and nonprofit media thinkers about the pros and cons of paywalls, I’m struck by how none of the numerous foundations in Memphis who’ve supported us has had any concern about our news being behind a paywall.
In fact, all the local foundations who fund us are incredibly supportive of – and I’ve say they’re deeply relieved about – our focus on earned revenue versus philanthropy. Why? Because they’ve seen too many nonprofits with very important missions across a range of issues ultimately fail because of a failure to generate earned revenue.
The second biggest source of earned revenue for The Daily Memphian is advertising. Virtually all of it comes from Memphis-based companies and organizations, ranging from corner restaurants to local museums to Fortune 500 companies. All of it sold by sales reps based here in Memphis.
It’s notable that while all our advertisers have a great appreciation for the importance of local news, overwhelmingly they advertise with us because of the value they find for their businesses in sponsoring The Daily Memphian’s site, email newsletters and events.
I’m celebrating our successes today. We also made many mistakes along the way. I’ll save those for another column. I’m sure it will be just as long.