These media outlets diversified their revenue with live events. Then the coronavirus hit.

How alt-weekly The Stranger, public sector-focused Government Executive Media Group and membership-driven WhereByUs are holding events in the pandemic

May 18, 2020
Category: Business & Work

A cluster of bookish Seattleites dodged winter raindrops on Feb. 5 and filed into the cozy confines of the Fireside Room in the stately Hotel Sorrento. Settling into wingback chairs and squeezing together on couches, the eager readers ordered drinks and hors d’oeuvres off a checklist while a baby grand piano played softly in the background. They opened their books and devoured pages. Silently.

For 11 years, the Silent Reading Party has been a monthly tradition started by Christopher Frizzelle, then books editor of The Stranger, Seattle’s alt-weekly newspaper. But the late winter edition proved to be the last. By the first Wednesday in March, the coronavirus was sweeping through the Seattle area, canceling events left and right.

When Washington Gov. Jay Inslee banned all public gatherings over 250 people on March 11, The Stranger entered into a tailspin. 90% of the paper’s revenue stems from advertisements for live events — the bread and butter of alt-weekly newspapers — as well as fees from the publication’s white label ticket sales platform and The Stranger’s own live events. All of it had evaporated.

On March 13, The Stranger furloughed 18 employees, suspended its print edition, and added a banner that asks for donations to the top of its homepage.

“It was the hardest day of my career for sure,” said founder Tim Keck, president of Index Newspapers, which owns The Stranger and sister paper The Portland Mercury.

As April rolled around with the state of the world growing grimmer by the day and no end in sight to stay-at-home orders, Frizzelle, still an editor at the paper, proposed converting the Silent Reading Party to Zoom, like countless other live events that have switched to the digital platform in recent months. The paper’s CFO warned that if more than 100 people showed up, he would have to upgrade the Zoom membership. But, he scoffed, “We’re not going to get to 100, it’s reading.”

The April 15 virtual event sold 231 tickets with silent readers tuning in from all over the world while pianist Paul Matthew Moore played over the stream. Of the unexpected success, Frizzelle said, “It’s the only party you’re legally allowed to go to.”

“I received an avalanche of emails, people writing in tears that this is the only connection they’ve had to other people in weeks,” he said.

What’s more, even though the event was virtual, The Stranger sold tickets — using its proprietary platform — on a sliding scale from $5 to $20. Most patrons selected the $20 option and the event generated almost $4,000 with zero costs other than an upgraded Zoom membership.

The Silent Reading Party is now a weekly event. Attendance has fluctuated in the roughly 150-200 range. At a time of financial desperation, the revenue is a godsend.

Since then, The Stranger has received a federal payroll protection program loan and brought several writers back on board. But the move to digital events may become a longer-term play.

Running on what Keck calls “Hillbilly Netflix,” a ticketing-and-streaming system jury-rigged in-house by the paper’s development team and broadcast on “an industrial version of Zoom,” The Stranger rebroadcast the 2019 edition of its stoner film festival Spliff and sold $13,000 worth of tickets, with 20% of gross paid to the filmmakers. Spliff 2020’s in-theater run was canceled, but it also became a streaming affair. It added a live host, local drag performer Betty Wetter, and grossed another $15,000, including pre-sold live tickets that were converted to streaming tickets.

With such success, The Stranger is now moving to an enterprise version of Vimeo, the video hosting platform. Revenues are lower, especially for nationally-touring events like The Stranger’s flagship amateur pornography film festival HUMP!, which had to cancel dozens of live dates. But costs are lower, too, without theater rentals.

Keck is also looking to package The Stranger’s streaming system into a local content platform for artists in Seattle and Portland who are desperate for audiences and struggle with clunky livestream platforms. The Stranger will offer a 70/30 split in the artists’ favor.

For Keck, who also co-founded satirical newspaper The Onion, the need to innovative revenue streams is not a new challenge, even if the coronavirus packed a particular wallop. Keck remembers when Craigslist evaporated the classified market around 2004, which prompted him to diversify The Stranger’s revenue into live events in the first place.

“When you have the cold barrel of a gun at the back of your head, you start to dance,” Keck said. “As it was with Craigslist, it is with coronavirus: We have to figure something out or we’re going to die.”

Government Executive Media Group already had a well-honed playbook

Government Executive Media Group, which publishes four titles focused on the public sector, found the move to all digital events was a less drastic change of course. The company has been in the events business for 22 years and has been producing webinars since 2008. Live offerings comprise some 35% of the company’s revenue, compared to 50% for the publications themselves: Government Executive, Defense One, Nextgov, and Route Fifty.

GEMG has been filming all of its live events for several years. Even though Washington, D.C., is the seat of the federal government, 66% of the company’s audience is spread across the country.

“There are 3,000 federal employees in the L.A. area,” said publisher Constance Sayers. “They can’t come to events in D.C. all the time.”

At the beginning of 2020, GEMG set a year-end goal for digital events to make up 35% of event-based revenue. In early March, they quickly realized that live events were off the table and reached out proactively to all of their clients — many of whom hope to sell products to government agencies — encouraging them to plan immediately for a switch to virtual events. For example, a highly anticipated March 19 session on the future of artificial intelligence with a full slate of main stage programming instead became a live webcast with no audience. Once governments issued shelter-in-place orders, even those were no longer feasible. But webinars and virtual conferences hosted on a combination of Webex, WorkCast, and BrightTALK — Zoom is a no-go for government employees due to privacy concerns — have exceeded expectations.

Now the company is figuring out how to break up daylong conferences into digestible chunks more appropriate to digital attention spans and mimic in-person features like breakout sessions with virtual “rooms” for small-group discussions. The company expects to meet its 2020 events revenue goal with just virtual offerings.

“This is the new normal,” Sayers said. “Businesses need to reach buyers, so they’re going to be looking at a combination of digital offerings and we feel well-positioned.”

WhereByUs’ events focus on membership

Events were less essential to the business model of WhereByUs, which publishes a daily e-mail newsletter in five U.S. cities — Seattle, Miami, Portland, Orlando, and Pittsburgh — designed to connect residents with local news, events, culture, history and civic life.

Pre-coronavirus, the company averaged $10,000 per month in total event ticket sales across the five brands, which accounted for about 7% of annual revenue. But they were less about making the bottom line.

“For us, events were not only an opportunity to get the community together and meet people in person, but also to create another point in that feedback loop to help people feel connected to the community,” said founder and CEO Christopher Sopher. “A lot of people attend and then become members.”

Membership, ultimately, drives WhereByUs’s business model. The network of brands is profitable based on membership alone. Losing live events has reduced one way of generating members, but the thirst for connection during the pandemic has actually boosted membership. With people at home more, they are reading their e-mail longer and looking for relevant local information. Open and click rates are up.

When Sopher’s staff first approached him about hosting free virtual events on Zoom, he erroneously dismissed the idea based on his own personal fatigue with videoconferencing as a poor replacement for meetings.

“Those of us who do it for a living are overestimating the percentage of people who are on Zoom all day,” he said. “Besides which, for a lot of people the experience of Zooming into a work meeting is: I’m being talked at for an hour.”

But newsletter editors insisted they knew their communities best.

The Incline, based in Pittsburgh, threw a virtual version of a popular live event — a haiku party where attendees write poems about Pittsburgh. The pandemic forced The New Tropic in Miami to scramble an alternative for an upcoming art exhibit at The Bass Museum, for which the museum had already paid to place advertising in the newsletter. The result was a 70-person discussion of the work over Zoom that ended up deeper and more participatory than it would have been over the clatter of an art opening with drinks.

While WhereByUs doesn’t plan to invest heavily in virtual events, its newsletters thrive on curating events listings for readers. Sopher is bullish those will come back with a vengeance.

“On both the ad and event side, there is going to be a build-up of steam, of people wanting to go out and do stuff,” he said. “Local media can be useful in helping people discover which ways are safe, smart, and still allow you to get out into your community and support the economy.”

Ultimately, the magnetism generated in those virtual events and the increase in reader engagement with the newsletters gives Sopher optimism after years of market research and membership drives through programs like Facebook Membership Accelerator.

“As we dug into our work, particularly with younger people, we saw a desire to get out, explore the city, meet people and plug into it in that physical way. If that chain breaks, how do the rest of the pieces work? Well, it healed itself.”

“I thought I had some unique idea of what cities are and how people related to them: a combination of inherited storytelling ideas passed down from person to person, then going out and physically seeing something,” he said. “The city appears to be a stronger idea than ever in many respects, even as the physical plant is weaker than ever.”

Gregory Scruggs is a freelance writer based in Seattle. He can be reached at news@poynter.org.