First, our goal was 20,000 subscribers by the end of the drive, which finished yesterday. We didn't quite get there. But it was still a big success. 20,000 was always an aspirational goal. We got really close. And as I think you'll see from this chart, we made big strides in our goal of shifting our funding base away from its exclusive reliance on paid advertising.
We launched Prime in announced Prime in October 2012 and launched the service in December. We had a lot of kinks to work out in 2013 (thanks to all who were patient!). So we really got underway with the service in a good way in 2014.
So why do we do this? Why is Prime so important? There are several interlocking reasons. The most obvious is simply that we're a small, independent company and more revenue allows us to do more. But there are more important, more specific reasons.
Digital publishing is extremely competitive. The entire digital publishing industry is defined by the over-supply of publications vs ad dollars. That's why publishers see ad rates always falling and readers see ads becoming ever more intrusive. It's all a buyers' market for advertisers. One of the benefits of being a small publisher is that we have no time to indulge the fantasy that we can buck industry trends. Bigger publications can't either. They can just pretend longer. Given this structural challenges on the advertising front, a few years ago we shifted our way of thinking about the business as a whole: what are the specific things about this business that give us competitive advantages as a business? What are the things that are unique or at least uncommon about TPM, advantages we have and will hopefully continue to have that will allow us to flourish as a business and thus flourish as a publication? And once we've identified those, can we reshape our business model around them?
(Shouldn't you always be doing that, pinpointing your key advantages and focusing on them? Of course, and we did. We always have. But seeing turbulence in the industry which is your primary source of revenue has a way of concentrating attention.)
This first of all led us to totally change the way we approach the advertising side of our business. But the big thing that came out of that rethink was our audience. Every publication and publisher says their audience is amazing and they learn from them and a bunch of other stuff. For us, it's actually true and in a very concrete way.
If you look at TPM's traffic patterns, they're very different from most other news websites. People overwhelmingly come to TPM via the front page of the site. Our core readership comes to the site multiple times a day. For our readers, we're not just one of many sites they happen to browse or something that pops up a lot in their social feeds. Our readers have a real relationship with the site. There are downsides to that traffic structure. But the upside is having a strong and enduring relationship with a slowly growing group of people. For a lot of people, TPM is not easily interchangeable with other sites.
That's what makes Prime possible, that relationship. Most sites don't have that. We do. Other sites that are larger or have a major media corporation behind them (often both) have big advantages on the advertising front that we don't have and never will have. (I could spend a dozen posts explaining all the ins and outs of how that works - I've now spent a decent chunk of my professional lifetime learning those ins and outs.) That's their advantage. But this is ours. So given the cutthroat competition of digital publishing - for advertising, for staff, for stories - we need to focus on that: a place where we have an advantage and the advantage is likely to be durable.
So membership is critical for us not just for the dollars for running and improving the site but because it's an opportunity to play to one of our strengths to compensate for inevitable weaknesses. Another thing that is almost as important: stability of revenue. Revenue sources that are unpredictable are inherently dangerous, precarious; they're also very hard to plan around. A vital and growing Prime membership program makes our growth and expanded reporting ambitions possible; just as importantly, if we face unexpected reverses or shortfalls on other fronts, it's a critical safety net.
More broadly, I think we'll eventually learn that most publications will require some sort of membership/subscription component to be viable. (Not all of them, mind you. I believe in a diversity of models.) That is after all the historical norm. There have always been some purely advertising based publications. But they were always the exception. The stability of advertising revenue which people associate with the 'good old days' of print was almost entirely a factor of the geographical monopolies or near-monopolies most news publications enjoyed. And even those publications with geographical monopolies drew a significant amount of their revenue from subscriptions. The ability to command a perception of value from a significant number of readers will be a key differentiating factor in determining which publications are viable and which are not. It may be what takes the place of geographical monopoly.
In any case, whatever the big picture is, the small picture is that Prime membership is a critical part of this site's present and future and helping us to near 20,000 subscribers is a huge part of keeping us viable, vital and growing. So thank you. Thank you very much.