Thriving without ads: How inside story sustains investigative journalism on subscription revenue

The likelihood of people paying for online news has become stagnant over the years according to the Reuters Institute’s Digital News Report (DNR) in 2023. As the cost of living rises, readers have been seen cancelling their existing subscriptions. 

Within Europe, Nordic countries have the highest percentage of people paying for the news. Norway sees 39% and Sweden 33% of its population paying for online news. One cause for this may be that many publishers in these countries charge their readers in some form for online news. 

From the DNR’s sample, in the European Union France, Portugal and Germany rank lowest with only 11% of their population paying for news. The study states that in these countries, readers have plenty of options to get access to high-quality news for free. 

The same study highlights the characteristics readers who are willing to pay for news have. Readers willing to pay for a subscription model tend to be more interested in politics and news. They are also more likely to be older men. They possess high education qualifications and come from a high-income category. When it comes to making donations, it is the younger readers that are more likely to pay.

The report suggests that knowing your audience is key and media publishers should target readers who are already considering paying for news. A reader paying for the news will select news sites with distinct characteristics. They will seek news content that is exclusive, expertly curated and of high journalistic quality. The paying reader also looks for a premium user experience with fewer or no ads. They also look into the ethics of the platform and have a desire to support independent journalism.

One news platform that has been able to incorporate these elements and function solely on audience funds is inside story. The Fix spoke to their co-founder to understand how they have been able to fund investigative journalism with subscription revenue. 

News organisations were the first to feel the heat of the financial crisis that broke in Greece in late 2009. Dimitris Xenakis, a strategy and management consultant for media organisations in Greece, recalls the situation media publishers faced during the crisis.

“A precipitous drop in ad spending, drastic lay-offs of journalists and the steep reductions in all news budgets that followed resulted in a severe crisis for journalism in Greece that was compounded with the already advancing world-wide media crisis.”

At the height of the crisis in 2014, he found himself laid off. Instead of continuing in a profession that was deteriorating, he decided to find a way to produce healthy journalism. Together with Tatiana Karapanagioti, a television producer for news shows, they decided to launch inside story in the spring of 2016.

The investigative work of inside story has helped them gain grants from the Investigative Journalism for Europe and Journalism Fund Europe. Other organisations from which they have received funds are the European Journalism COVID-19 Support Fund and the NextGenerationEU. Together with EEA Active Citizens, they have conducted workshops which also helped them generate revenue. 

Below are the four lessons that helped them stay financially afloat without relying on advertisements. 

Researcher Tim Kormelink found that many skip the underlying reader’s motive to go for paid news. Pinpointing the needs of the audience can help news organisations draft strategies to attract them. The audience’s need could be to support independent journalism, get a smoother viewing experience, or get news that is curated (eg. as a newsletter). 

inside story’s co-founders realised that in Greece there is a market gap in the form of lack of trust in journalism. They decided to fill this gap and establish a platform “that would help increase trust in journalism and give life to investigative journalism,” Xenakis says. 

As the Reuters Institute’s report found, audiences in the UK and Germany are less willing to pay as there are plenty of free news alternatives. Realising this Xenakis says, “people have other channels to learn what’s happening, that are better equipped for real-time coverage. Being a small media organisation, we decided early on that we should focus not on the news cycle itself, but on what affects the citizen.”

They decided to deliver on news quality rather than news quantity. “Our strength – we believe – is in explaining clearly and accurately what, but also, hopefully, why things are happening, or why they are not happening,” he says. inside story publishes one article daily averaging 2100 words and a daily newsletter (which can be weekly based on the reader’s desire).

Xenakis highlights, “People who are receiving free content are one of the most promising cohorts for becoming members and paying for a subscription.” One way to get the non-paying readers to turn into paying readers is to introduce low entry costs, according to the Reuters study. Kormelink’s research also found that an effective price can sway even the price-conscious reader. 

Currently, inside story has around 4000 paying subscribers. Subscribers can either pay €6 per month or €60 yearly. By being a member they get access to inside story’s entire archive and their newsletter. Subscribers also get the option to share their favourite article with non-subscribers.

Xenakis notes, “One important finding is that the paying members are not really concerned with other people getting the same content for free (for example in a freemium or share-to-a-friend model).” Publishers can use this to start sharing more of their work to entice the non-paying reader. 

Media publishers can introduce low-cost starter packages, student discounts and cheaper yearly subscription plans. Xenakis adds, “We offer substantial reductions for specific groups such as students and are in the process of actively targeting disadvantaged sectors of society, that would often be averse to consuming journalism, aiming to find ways to engage them.”

Xenakis states that inside story has gained their audience in two ways. The first is through their work. Over the years they have produced credible and notable journalistic work like the Predator Spyware scandal. This has given them exposure to mainstream media and has increased their trust as an investigative platform. 

The second, more direct way, is by engaging with people. They have conducted workshops in bookstores to make people realise the value of their platform and what kind of work they produce. He says, “All these have been highly effective in getting people to realise the value that we offer and the importance of their contribution. The most important parameter is for people to meet journalists on equal terms and grasp the actual work required for quality journalism to be produced.”

Xenakis mentions that as an investigative platform, it made sense for them to use a subscription model. The model gave them the freedom to report without any editorial interference and helped them gain credibility in the eyes of their readers. 

“Not having ads has served us well up to the present, both in affirming our commitment to independence and in not having to enter the numbers race to increase page impressions to maximise ad revenue. We need much fewer paying subscribers/members to earn enough to sustain ourselves. This is far better than the alternative of striving for large numbers of casual readers and then rely on fickle ad revenue”   

“The willingness to pay comes via a combination of factors. An important factor for example is how much [readers] trust that you will do your job appropriately”, Xenakis sums up.

Source of the cover photo: Photo by Firmbee.com on Unsplash