Editors note: We are republishing an article by Faisal Kalim that looks into the role of merchendise for publishers to grow revenue. This piece was originally published on What’s New in Publishing.

Block Club Chicago, a non-profit, subscription-based news publisher generated more than $100,000 in revenue by selling T-shirts connected to a news story, according to a new API report.

This was in 2019 when an alligator sighting in a local lagoon, covered first by Block Club Chicago, went on to generate considerable interest among its readers. The publisher responded by continuing to report on the event, calling it “Gator Watch.” It even gave the gator a nickname: “Chance the Snapper.”

Continued reader interest encouraged the publisher to capitalize on the story with a merchandise campaign. This led to the T-shirt idea – they went on to do thirty stories and sold 4,000 T-shirts.

Unexpected source of revenue

Writing about merchandise that helps build brand, engagement, and community pride, Stephanie Castellano, author of the report, says, “It’s turned out to be an unexpected source of revenue for some news organizations to help support their journalism.”

She shares several examples of newsrooms that have experimented with merchandise strategies to generate revenue and build engagement.

Block Club Chicago repeated the strategy successfully last May by selling T-shirts based on a story about a pair of endangered piping plovers laying eggs on Chicago’s Montrose Beach. The new series of T-shirts and other prints titled “Chicago Is For Lovebirds” earned more than $43,750 in revenue. The publisher’s revenue from total merchandise sales for 2021 was over $80,000.

It ensured a higher profit margin by keeping the supply chain local and managing order fulfillment in-house, notes Castellano. “A local artist designed the shirts, a local vendor printed them, Block Club reporters helped pack the T-shirts into bags, and co-founder Shamus Toomey made the trips to the post office to mail them away.”

The publisher also reduced financial risk by pre-selling the merchandise. “In a presale situation, our [only] upfront cost is what we agreed to pay the artist,” said Co-founder and Managing Editor, Stephanie Lulay in an earlier interview. “We weren’t ordering anything from the company until we knew that sales were coming in.”

Our very local merch strategy has been a win/win/win for our newsroom. It’s brought in revenue so we can produce more critical reporting, doubled as marketing so more people know about our newsroom, and – by working with local artists and printers – has allowed us to deepen our relationships in the communities we serve.
Stephanie Lulay, Co-founder and Managing Editor, Block Club Chicago

Having paid merch for sale also serves as an additional (and cheaper compared to subscription) option to readers who want to support the publisher. “Somebody not being able to afford $59 a year for a subscription, but they may be willing to pay $15 or $20 for a T-shirt,” said Maple Walker Lloyd, Director of Development and Community Engagement, Block Club Chicago. “That may be the only way they can support us.”

Meaningful impact on circulation

The Keene Sentinel, a New Hampshire-based daily newspaper has used merchandise to grow subscriptions as well as improve retention. “For us, pressure sales or deeply discounted subscription starts have led to high churn rates and wasted money,” writes Terrence Williams, its President and COO, in a piece for Better News. “We wanted a more reliable means of retaining new customers and therefore generating more income.”

The publisher developed a program that entailed bundling locally produced goods from local businesses with subscription offers. It partnered with Keene’s Prime Roast Coffee Company to offer a free, one-pound bag of coffee (purchased at 50% of the retail price) with an online-only subscription or weekend print delivery and full online access. The publisher offered a moderate discount of 35% on subscriptions to avoid the high churn that comes when subscribers have to pay full prices after enjoying steep discounts.

The promotion ran for four weeks and fetched 55 subscriptions. Ten months later, the publisher had retained 44, according to Williams. Subsequently, the Sentinel also partnered with a candy company, a baker, a soap manufacturer, an oil and vinegar producer, a maker of rum, and a chocolatier.

Overall, the program has sold 341 subscriptions out of which 300 have stayed which makes for an 88% retention rate. “Total revenue on the retained sales only is $15,282 through October (2021),” writes Williams. “The cost of the program, not inclusive of the discount, is $4,934, producing a profit of $10,348.”

Quite frankly, we didn’t expect the volume of orders we received. Again, we are a small news organization, so high start volumes are not the norm. Getting an average of nearly 50 new orders a month through this program had a meaningful impact on circulation.
Terrence Williams, President and COO, The Keene Sentinel

Moreover, the retail partners had a positive experience as they received significant promotion from the print and online marketing of the program along with payments for their products. Going forward Williams plans to ask retailers to give their products at no cost, or at deeper discounts. Readers also viewed the program favorably as it supported local businesses.

Creates a sort of virtuous circle

Merchandise can also be highly effective in creating engagement. “Sometimes when a story takes off, we’ll ask ourselves how the interest in that topic might translate to a product for the store,” says Elizabeth Hoekenga Whitmire, VP of Audience, Alabama Media Group. “We often look back at top-performing content for merchandise inspiration.”

Alabama Media Group experiments by tying merchandise to popular stories. This strategy “creates a sort of virtuous circle in which the content feeds the sale of merchandise, which in turn creates engagement around the original story that inspired it,” writes Castellano.

The publisher’s lifestyle and community-focused media brand, “It’s a Southern Thing,” featuring regionally focused items from children’s books to T-shirts to card games “has performed especially well,” says Hoekenga Whitmire.

Merchandise can be a conversation starter, in the same way, a really engaging story can be. If someone sees their experience reflected through a T-shirt or another product, they will share it or comment on it just as they would with a story or social post.
Elizabeth Hoekenga Whitmire, VP of Audience, Alabama Media Group

“People also love to suggest ideas for products the same way they might suggest story ideas,” she adds. “Listening to your audience is really important in the merchandise space as well.”

The full report is available at API:
These news orgs are boosting revenue with locally themed merchandise

Photo by Sascha Bosshard on Unsplash

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“Win/win/win for our newsroom”: How merchandise is helping publishers generate revenue, build engagement and grow subscriptions