“This was the first time that we built an event from scratch from the ground up,” says KSAT-TV San Antonio News Director Bernice Kearney. “We were schlepping pumpkins at 6:30 in the morning.”
For the nearly 700 people who came, KSAT’s “Spooktacular” was just a nice way for the family to spend the Sunday before Halloween. But for the station, it wasn’t just about selling tickets to a community event. Spooktacular was another step towards a distant goal that skeptics might say doesn’t have a ghost of a chance: to develop an ongoing membership model for local TV stations. The concept is to identify loyal digital fans and “super-serve” them with layers of distinctive value that they will pay for. Now KSAT’s owner, Graham Media Group, is doubling down on the idea — and getting some help from Google to do it.
Graham was just selected by the Google Local News Initiative Innovation Challenge for its ‘Membership for Broadcast Project’ — one of just 34 proposals in North America to attract funding in a competitive field of 269 applicants. From Google’s online description:
The Membership for Broadcast Project will demonstrate that local broadcasters can develop their relationship with their digital audience into a sustainable business model that offsets expected declines in retransmission and advertising dollars. It’s a crucial lesson for local broadcasters who need to act now while they still have the resources, audience and clout to build new businesses. Local newspaper companies waited too long and now face steep declines not only in revenue, but influence and impact. Broadcasters have time to build an audience-based revenue model through user funnels, which will allow them to maintain their leading role in local news.
While newspapers and digital news sites have subscriptions and paywalls, and public radio and television have long relied on paying members to fund their efforts, over-the-air TV has always been free — an inherent part of its appeal.
No one is suggesting a paywall or paid subscription for local TV newscasts. But Graham innovation chief Catherine Badalamente and her colleagues believe that local TV’s unique connection with its viewers and users has monetizable value that stations must tap into as traditional revenue sources erode. “When I’m looking at our business and all of the obstacles that we have and all the disruption, it is the clearest path towards a sustained business model,” Badalamente says. Graham’s audience development head Dustin Block agrees: “Local TV is the most preferred and trusted source of local news in America,” he says. “And we need to take advantage of that while we still have a chance.”
The Graham experiment will involve all seven of its stations, but Badalamente says the main focus will be in Jacksonville (WJXT-TV) and Detroit (WDIV-TV). “And we can take that same sort of relationship that we’ve built around the trust of our content and have it stand behind products or services that we can feel proud to offer to them and that are actually going to make their lives better,” Badalamente says. “If you’re doing membership correctly, you have to take time to really explore those relationships with each kind of audience segment. And that’s what’s really going to help us as an industry long term.”
Badalamente and Block say they plan to use the $300K in funding from Google for the technology to support a robust database of loyal viewers and users — a resource that’s critical for the plan to work. “We’ve never really built up a lot of user data,” says Block. “And so shifting to that is a great opportunity. In the nonprofit world, they don’t even think about it: it’s so fundamental to their business. But for us, it seems so innovative, right?”
KSAT’s Bernice Kearney paved the way for the new initiative with an aggressive events strategy called KSAT Insider — a project that grew out of the station’s participation in Table Stakes, a year-long challenge-based transformation program that’s part of our Knight innovation project here at the Cronkite School. “We already have a really deep connection to our audience,” Kearney says. “And this is a way to solidify and continue to nurture that relationship. In a fractured world where there are so many media choices that don’t involve the personality and the human touch that newscasts and newscasters and reporters and meteorologists and sports anchors bring to life for people, that’s more important than ever.” (Read the Nieman Lab’s take on KSAT Insider here.]
Frank Mungeam, Knight Professor of Practice in TV News Innovation at the Cronkite School and our colleague here at the Lab, has written about what KSAT and the other nine stations in the first Table Stakes cohort learned. Frank will be an adviser to the new Graham initiative, and one of his own Cronkite projects, the ‘Interactive Story Wall,’ also received Google News Initiative funding. (Read more on that here.)
One thing Bernice Kearney learned was be prepared to make mistakes and adjust on the fly. Example: KSAT arranged a theatrical screening of a documentary about a controversial murder case but discovered that the only people buying tickets were the families of the murder victim and the accused killer. “We realized that we were getting set up for a potential Hatfields and McCoys situation,” says Kearney. Screening cancelled. “If you’re thinking about going down the road of a membership program, you have to be willing to shift gears. Often.”
To reiterate: Graham isn’t asking newsroom fans to become paying “members” — at least not yet. KSAT Insider, which includes special access to events and other perks, is free. The new Graham project will go well beyond events, but the executives acknowledge that getting “members” to pay for the privilege is still a distant goal. There’s a lot of work to be done first, and it comes down to an essential question: just what is it that’s worth charging for?
“I think the one place where all this experimentation is going to lead is that we’re going to figure out what that value proposition is,” says Badalamente. “And then we’re going to be able to say to the audience: ‘You know, if you become a member or a paid member, you’re going to have this amazing value,’ and it’s going to be a no-brainer for them.”