Editor’s note: The following is a summary of the case study of the Ukrayinska Pravda membership model, launched in mid-2020. The article recaps key points from the full report prepared by the Ukrayinska Pravda membership team.

Disclaimer: The Fix contributor Alex Sabadan helped Ukrayinska Pravda launch this membership project and advised the outlet on various topics.

There are an abundance of reader revenue model success stories in Western media markets. More interesting, is when these solutions spread across the globe, where they are tested, refined and implemented in more challenging economic landscapes, with comparably lower GDP per capita or without established traditions of paying for content.

Ukraine fits this mold. It also has a distorted media market with political players tied to big money casting a wide net. The prime example is Ukrainian TV, where all the biggest channels are controlled by oligarchs. Independent digital media outlets work hard to maintain and increase their market shares. Ukrainians generally don’t pay for news content so independent news outlets have begun looking to membership as a monetization model.

One of them is Ukrayinska Pravda,or UP, a leading independent digital media outlet.

Why should you care

Case-studies about membership building and implementation shed light on internal processes and challenges the news organization faces during project implementation. Membership implies a voluntary financial contribution on behalf of readers in exchange for intangible benefits. It is instructive for media professionals to see how a given media outlet implements the audience engagement exercise in practice.

The Ukrayinska Pravda case is also interesting because it brings its share of innovation to the industry. Its medium membership level, called Toloka UP, and the concept of bundling, is a rethinking of membership programs that are more common in airlines and financial industries.

Background

Journalists Georgy Gongadze and Olena Prytula founded Ukrainska Pravda in 2000 as a response to censorship under then-President Leonid Kuchma. Several months after the online outlet’s creation, Gongadze was kidnapped and killed. This crime drew nationwide attention and led to “Ukraine without Kuchma” protests against the government in 2000 and 2001.

Ukrainska Pravda covered these and subsequent democratic protests, including the Orange Revolution (2004-2005) and the Euromaidan Revolution (2013-2014). The outlet became the most visited news website in the country in 2004 and since then has retained its place among top five most visited resources.

Donors were Ukrainska Pravda’s main source of funding until 2005. Its substantial audience was difficult to monetize at the time, because advertisers feared political retribution for cooperating with the independent outlet.

The situation changed after the Orange Revolution, which opened the doors to advertisers. They have been the backbone of the site’s business model ever since.

Ukrayinska Pravda now employs up to 70 people and has a monthly readership of 10 million users. It has more than 10 million users monthly and a total of 1,6 million followers across its social media pages.

A year ago, as the first cases of COVID-19-related businesses shutdowns and a digital advertising slowdown hit at once, UP understood it needed to diversify its revenue. It decided to start on the path to membership.

The outlet already had an inner desire to generate reader revenue. All that was left to do was to design, plan and implement the membership model.

More from The Fix: Top Ukrainian media builds travel, payments industry solutions into unique membership model

How UP membership works

A key ethic of Ukrayinska Pravda is that free access to news and information of social importance is a basic human right, so content must be freely available for wider audiences.

With this in mind, the membership team conducted an audience analysis, including questionnaires and focus groups, to understand what tangible and intangible benefits would incentivize readers to become members.

The research led to the creation of a three-level membership model.

The general idea was that the UP audience was too big to be targeted by just one overarching value proposition. In order to have meaningful interactions with readers, the value proposition needed to be differentiated to match with interests of key audience clusters.

Three potential clusters of members were identified and three membership levels were introduced between June and October 2020.

Club UP is for readers who are interested in providing basic support to Ukrayinska Pravda and want some involvement in the editorial process. Its value proposition includes an exclusive newsletter, access to closed events, opportunities for direct discussion with the editorial team and the ability to vote for specific content or propose reporting topics.

The average monthly user contribution for this level is 76 Ukrainian hryvnias, or $2.70 (some 40% higher than the minimum contribution set at 55 hryvnias monthly).

Toloka UP level (Toloka means communal work in Ukrainian) is for readers who both want to support UP and receive something tangible in return for their contribution.

The main membership benefit at this level is a set of discounts and bonuses from UP partner companies — more than 30 businesses, including retail shops, cafes, restaurants, hotels and booksellers.

By creating a bundle of perks the membership team ensured that everyone would find something in it for themselves.

This bundling approach is innovative for the media industry. It was inspired by rewards’ programs like the Star Alliance airline program and Amex Rewards, which offer everything from discounts to cashback.

Readers responded positively. As of March, Toloka UP members represented 33% of all UP members. By subscribing to this tier with a minimum contribution of 125 Ukrainian hryvnias ($4.40) monthly or 1,000 hryvnias (36$) yearly, Toloka UP members increased the average membership value by 29% for monthly payments and by 40% for yearly payments. The approach helped improve the financial performance of the program overall.

While building Toloka UP, the team once again used the power of questionnaires to understand what special bonuses people would actually use. Most of readers voted for books and UP made an effort to bring all major book selling players into the program.

Editor’s Club, the final level, focused on the wealthier side of the audience. With 14 million unique monthly users, a sizable chunk of UP’s audience comes from the country’s elites, but also others interested in deeper engagement.

Editor’s Club is made up of members invited either directly by the editor-in-chief or recommended by one of the existing members. The fee for most members is high at $1,250 per year – $1,000 to cover the core fee and $250 to go into a pool for valuable members who cannot cover the dues. Membership is currently wide-ranging, from small and medium-sized enterprise managers to philosophers.

Editor’s Club members join a private chat for discussions and attend offline events (COVID-19 restrictions permitting), with discussions on important social and political issues and guest speakers – typically prominent historians, activists, or entrepreneurs.

More from The Fix: Are free subscription trials more effective than paid ones?

Preliminary results

Nine months after the launch of the first level of its membership model, Ukrayinska Pravda achieved the following preliminary results:

Nearly 2,500 registered members.
Up to 10 online and offline events for members with the UP team (including open editorial content planning sessions, which recently became regular).
Introduced the UP Club Award and awarded eight Ukrainians for their outstanding contribution to civil society development. Among the awardees were journalists, volunteers, artists and innovators.
Published more than five articles based on readers’ ideas.
The membership model has paid off. As of 2020 revenues from membership covered 12-14% of organization costs.

More information on the UP membership case, including its approach to project implementation, learning and insights can be found in the full text of the report prepared by the UP membership team.

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