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[upbeat music] This week's episode of the Rebooting show is brought to you by Permutive. The rules of advertising are changing. Consumers are concerned about how their data is being used in advertising.

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Regulators across the globe are closing in, and browsers are blocking third-party data. Publishers and advertisers need to develop responsible marketing practices that protect consumers' data.

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Built on the core principles of privacy, consent, and transparency, Permutive's audience platform empowers publishers and advertisers to responsibly activate audiences without any third-party access to personal data, offering insights, modeling, and activation in cookie-restricted environments.

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The data decisions that are made today will impact your ability to continue to effectively execute digital marketing in the future. Join Permutive in the responsible web. Find out more at permutive.com.

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That's P-E-R-M-U-T-I-V-E.

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[upbeat music] Our strategy now is listener to member, and actually when you listen on a, o-on a podcast, the intimacy of that kind of experience to listen to people, you know, they're inviting you to join the newsroom and support them and get behind it.

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It, it all feels very different. Most people that join Tortoise have joined on an invitation.

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Either another member has invited them, or they're being invited by the person they're listening to in their ear to come join and be part of the newsroom and support us and be part of it.

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So why do you think the text focus didn't work?

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[upbeat music] Welcome to the Rebooting show.

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I'm Brian Morrissey. I'm doing this, uh, from Portugal. I'm actually in Porto right now in an Airbnb. I've been sampling the local delicacies for the last, uh, few days.

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Unfortunately, most of them have, like, two thousand calories each, so I'm gonna go for a very slow run after this.

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But I've been in Portugal because, uh, I was speaking at the FIPP World Congress last week, which was held in Cascais, which is a little fishing village a little bit south of Lisbon.

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It's a great event, and it brought together publishers from all over the world talking about how you build sustainable media models, and it was great to hear different perspectives.

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I gave a, a presentation there last week that spurred this past email that I had sent out, uh, on Thursday about humanistic media. It was a little out there, but if you have a chance, give it a read. I'm...

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I've been trying to sort out where I think publishing is going, but also where I wanna take the Rebooting.

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And I keep landing back on this idea that, you know, email newsletters and podcasts and events are a, a different form of media. They're more personal, and they're more human.

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A-a-and I feel like the scale era in some ways was such a disaster that there's an opportunity to go in a very different direction with smaller, more meaningful, and more human news and content products.

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And I think Substack is part of that, but I think it's far bigger than that. So I was really glad at FIPP that I got to have a conversation with Katie Vanick Smith. Katie's the co-founder of Tortoise Media.

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She used to be the president of Dow Jones and The Wall Street Journal in New York.

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But, you know, she started Tortoise a few years ago, and, and many Americans might not know about Tortoise, but we wrote- would regularly write about it at Digiday, uh, from our UK team.

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But it was founded around this concept of slow, that it would reject the, the hamster wheel of content from the scale era to create a slower and, and more meaningful news product.

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And I love how Tortoise describes itself, and this is how it does. It says, "The daily noise. We are overwhelmed by information. The problem isn't just fake news or junk news, 'cause there's a lot that's good.

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It's just that there's so much of it, and so much of it is the same, in a hurry, partial, and confusing. Too many newsrooms chasing the news but missing the story. There's also the power gap.

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The divide between the powerful and the powerless is widening. We feel locked out, alarmed by the lack of vision, hungry for leadership in business, technology, and society. We believe in responsibility.

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We care about dignity." I think that's well said.

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And Tortoise is doing this with a membership model that's attracted fifty thousand paying members, many of whom are far younger than the people my age and above who typically pay for news.

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This is a particularly notable achievement, actually, in the UK, where people are far less likely to pay for news than somewhere like the US.

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I know at Digiday, we had to charge a lot lower in the UK than in the US, 'cause different markets have different propensity to pay. And more recently, Tortoise has shifted from being mostly

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built around text to organizing itself around podcasts. And I find this fascinating, because when I conceive of, like, humanistic media products, it's basically a triangle.

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And you've got newsletters and podcasts or audio and maybe video too, and, and then you have live events, right?

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And I think all three of them, in their own ways, are incredibly human, and they're ways that you can establish, like, a close connection with an audience.

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And it's no surprise, then, that Tortoise is doing all three in its own way. So the following conversation was one that Katie and I had at the FIPP World Congress.

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So you'll have to excuse any, any audio wonk-wonkiness or, or weird asides that I make that I hope made sense [chuckles] in front of a crowd, but it might not in a podcast.

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Either way, we'll just chalk it up to being human. Let me know what you think of the episode. You can always email me. My email is bmorrissey@gmail.com. Now here's my conversation with Katie.

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[upbeat music] [static] Introduction. Uh, I write the Rebooting.

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It's a newsletter and podcast that is about building sustainable media businesses, and I think what's been good is just hearing todayA sense of optimism, and maybe it's being all back together after a couple of years, uh, looking at people mostly through the little boxes on Zoom.

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But I do think that this is a time in which there are new publishing brands being built that are different from what came before, because I think that there is reason for optimism.

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There's a lot of problems right now in publishing, but I do think that the next generation of publishing brands are being built right now. I'm joined by Katie Vanik Smith, co-founder of Tortoise Media.

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I'm sure you all know Tortoise Media, but just to go backwards a little bit, what was the need that you and your co-founder saw in the market that, that led to Tortoise becoming Tortoise?

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So I think we probably saw a few things that are true today, and we probably saw... s-we probably learned some things.

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So the things that we thought were important as we were setting up Tortoise were, there's lots of great news brands out there doing breaking news. So for us, have this... Uh, hopefully the clue is in the name Tortoise.

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We're slow news. So we felt that there was a space and a place to do a new news brand that was focused on longer form investigative journalism, slowing down, not the breaking news, but the forces driving the news.

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We also thought... I was in Dennis's talk earlier about Daily Mail and the secret war rooms that people...

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Sort of every time you worked on a project, you know, we had very closed editorial rooms where we'd work in secret on projects.

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But we thought there was an opportunity to maybe open up the journalism process and create a system of organized listening. So we're not just a slow newsroom, we're an open newsroom, so we're open to our members.

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So every day we host our editorial conference with our members in the room so that we can listen before we report out.

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So we're slow, open, built with and for members, and we thought that that was a sort of good solution to some of the sort of clickbait, news become noise, accelerated age and constant scroll.

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Although Insta is no longer a constant scroll. That's true. It is true. But in the market, I mean, like, from, you know, from the consumer standpoint, obviously...

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I mean, this started in two thousand and eighteen, right? So, you know, this was sort of at the tail end of the Facebook, everyone pivoted to Facebook. They say they pivoted to video, but they pivoted to Facebook, right?

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And Facebook was sending floods of traffic still, and that was starting to end, but, like, people are used to just this massive fire hose of content. Was there something specifically that you saw that, that people...

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That you saw a reaction against that?

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'Cause anytime, I always feel like, particularly in this industry, like, the pendulum always swings too far, and in my mind, it's, it, it, it swung too far in the direction of we're ju-we're just gonna create more.

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It's harder to make money off ads, so we're just gonna do more page views. We're gonna do... put more ads on the pa- Uh, the answer was always more.

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So I'm a marketeer by training, so I love scarcity because scarcity drives value often in pricing strategies. Also, I run a startup, so less is definitely more when it comes to running the P and L.

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Uh, but actually, the, the... We, we've learned a few lessons around it, which is, I think the lady from the FT Strategies said that subscription businesses are hungry businesses. You need to produce a lot of content.

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So Tortoise isn't subscription on purpose. We're membership because we can't compete in that ecosystem of digital publishing.

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So digital publishing and the ecosystem that has sort of grown up around paid-for subscriptions for many of the brands that we know and love does require you to produce quite a significant amount of content to kind of play the social media game, to be constant, to be top of things.

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So, you know, when we set out, driven by smaller budgets, we, we sort of said, "Right, we're gonna be membership," so we, we do fewer things on purpose. So we do one podcast every day.

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So on a Monday it's our investigative podcast, Tuesday it's our interview with Andrew Neil, Wednesday it's Caroline Corada Perez, Thursday...

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You know, we have a daily, sort of an old-fashioned, if you like, G-two or times two strategy where you had a reason to buy every day. So we have a daily podcast. We have one daily newsletter called The Sense Maker.

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Uh, we also do that in audio because our under 40 audience prefer audio to newsletters, so The Sense Maker is a daily news product. We do one multi-part series a month. So our current one launched on Monday.

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It's London Grad. It's a six-part sort of series, sort of a binge, if you like, a sort of Netflix equivalent, again, as a podcast. We do one news meeting a day that our me- uh, members can join our thinkings.

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We do one book a quarter, and that's it. Right. And it means, you know, y-it w-works for us, but it does mean we can't be a subscription business. We can't... We're not in... W-Once we use subscription techniques, y-y...

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There isn't enough content in that product to, to, to feed the firehose. So can you l-explain the difference between subscriptions and memberships because they're used interchangeably. I mean, I...

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You were at Dow Jones, right? I was. Okay. So The Wall Street Journal claims to have a membership program with a, a million people, which I find is absurd to think about. Like, how is this a membership?

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It's a subscription. It's fine to have a subscription. It's fine to have an audience and not a community. Not everything needs to be a community. Not everything needs to be a membership in my view.

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But, like, w-what makes this a membership and not a subscription? What is your test to whether someone is, it has a membership or a subscription? 'Cause a lot of people say they have memberships. They like the term. Yep.

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So, well, proof point number one is sixty-five percent of our members come through a direct referral from another member.

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So how do you join most membership programs is because you, you'll get invited as a guest or somebody's told you to become a member of it.

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I think the relationship you have with a subscription business versus a membership business is different. A subscription is a transactional value first and foremost.

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You know, that product is something that if you don't use it enough-You will churn. So you heard the FT talk about their recency, frequency and value. You will churn if you don't use it enough Lots of people...

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You know, Tortoise doesn't produce enough for you to probably be using it with the same number of days of the month that you would for, for a daily news product, right? Yeah. So the NPS score really matters.

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So our net promoter score, it's like plus fifty-five percent. You know, plus fifty-five. Most of our people come through a referral.

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And purpose is, is actually one of the main reasons people say that they actually joined Tortoise. They want to be part of it.

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And actually, our strategy, one of the white space things we didn't see when we set up was the fact that we thought we were going to be doing a slow news organization that was the written word designed for the mobile.

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And actually, eighteen months in, we're now doing, as you heard, predominantly audio output. Mm. And that was driven by younger demographic of members.

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It was also driven by the fact that we couldn't compete in that digital ecosystem and the fire hose you talk about. We couldn't get cut through in social media in the same way because we just didn't have the volume.

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But what's been interesting is that in that switch, we- our strategy now is listener to member, and actually when you listen on a, on a podcast, the intimacy of that kind of experience to listen to people, you know, they're inviting you to join the newsroom and support them and get behind it.

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It, it all feels very different. Most people that join Tortoise are joi-- have, have joined on an invitation.

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Either another member has invited them or they're being invited by the person they're listening to in their ear to come join and be part of the newsroom and support us and be part of it.

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So why do you think the text focus didn't work? There's so much good stuff out there. Is it that, eh? It's really hard to cut through.

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So for us, text is still an important part of our output in that it's our daily news habit. It's the Sense Maker newsletter or it's the quarterly book.

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But, you know, for us to sort of find a way to build a business, we tried lots of different things. We did five stories a day at the beginning. We then added slow views.

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We, you know, we did all these different things, and ultimately, the members said, "It's too much. You told us you were slow news, but you're actually behaving like all the others," you know?

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So that was one bit of quite clear feedback. And the other side of it was just that it, that that whole ecosystem doesn't work unless you've got the recency and you're, and you're producing stuff all the time.

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It's not... It, it doesn't work for us. I mean, search works for us in, from an organic point of view. But the rest of social media, you know, it, it wasn't going to fill the funnel.

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And so actually, we're finding our listener-to-member strategy is working much better. Yeah.

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So when did that become obvious, and what signals were you seeing on the audio side that said this is the direction we gotta go in?

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'Cause I think a lot of times, particularly when you're starting something new, you, you have to have conviction, right?

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But then in this, the flip side of that is you just have hypotheses and you have to change direction sometime, whether you like it or not [laughs]. Yeah, we're good at hypotheses.

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So we were lucky actually when we started because we didn't have to rebuild the talent. We actually had employed journalists from a mix of different backgrounds even though we were predominantly in the written word.

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So we had people who'd worked in radio, TV, and also newspapers. So, you know, because you had a bunch of different skills, you know, we were always open to sort of trying different formats anyway from the beginning.

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But why did, you know, why did we pivot? Well, the first was actually go back to the members and listening to what members were saying.

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The first was that members were telling us we were doing too much, yet we were only doing five stories a day, which felt quite odd to people that come from newsrooms that were producing four hundred, five hundred stories a day.

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So we were doing too much, but we couldn't actually get the ecosystem of digital publishing to work to fill the funnel for subscriptions because you need much more content than five stories a day to get all of the machinery working.

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So that was the first thing. The second thing was that most paid-for-news brands, in the UK at least, most of the members or subscribers would be in their mid, early to mid-fifties, right?

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And actually, our members were in their late thirties. And, you know, when you actually spoke to them and you were like, "Well, what do you have? What's your normal news consumption?" All those different things.

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You could see that these are the generation that have their earbuds in the entire time, even when they're sitting at their desk at work. You know, they're constantly plugged in and listening to something.

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And podcasting was, you know, it's been around for a while, but it was starting to really grow at some, you know, interesting levels.

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So it felt like, one, an opportunity because, you know, whilst there are great podcasts out there, there's no one in the, in journalism in the UK that's only really doing it for podcasting.

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That, you know, we've got great UK brands that produce podcasts, but they're part of the mix. So we thought if we focus on that, you know, we could maybe run at it faster. Two, it works for our audience.

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I mean, our average listener is like twenty-eight, and our average member is thirty-nine. So- Hmm... it, the interesting, you know, it's a younger engaged audience.

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And for us, there's something really lovely about audio, which is people spend time with it. You know, we're...

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In the digital world that I grew up in, you know, we were looking at metrics where people were saying, "Great, you know, people are spending four minutes on that article."

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And you'd be like, "Yeah, but if you read the article, it would take twenty-four minutes to read." Yeah. So in audio- And that's extremely high. I mean, most websites have like seventy percent bounce rates.

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That, uh, so when people are, are talking about massive audiences and scale, like these are very, very flimsy- Oh, yeah... uh, relationships [laughs].

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I mean, to be fair though, the, the sort of podcast metric ecosystem is- Yeah, sure... also quite flaky. So but that, it'll catch up, I, I assume. But you can see listen through rates on podcasts.

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You know, like on something like the Slow Newscast, which is forty minutes long, it's got an eighty-eight percent listen through rate.

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Yeah.So I think what's interesting about podcasts, and I think that's similar to newsletters, and I wanna talk about that, is it's a more personal form of, of media because of the human voice, and I think that leads to a different, like, connection.

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And so how do you end up bringing people through the funnel to become members? Because podcasting has been majority advertising-supported up until now. Mm-hmm. It's start...

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We're starting to see, I mean, Patreon's top charts are filled with podcasters. So there is a definite, like, paid component to that. But explain sort of the process. So it's a hypothesis. You like those. Yeah. Okay.

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So the hypothesis is that if you've got, you know, listeners for scale, so it matters from a journalism point of view that you do have a scale in your business.

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So, you know, when you're building a paid-for model, you have to understand, you know, what's the ambition for scale, but also what the ambition for paid-for members or subscribers.

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So for us, we're very comfortable if only one percent of our listeners become members. So that's the sort of... It doesn't sound, doesn't sound too scary. As a hypothesis, it sounds kind of doable.

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Because you have more than a thousand listeners on the podcast. [laughs] Totally. So we're at about three million a month. Good, good. Better. Uh, so, so the,

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so, so, so we start from a premise that actually we're really increasing the amount of audio content we do, and if one percent of our listeners become members, then that's good, right?

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So in the listening world, there's a bunch of things we do. So first and foremost, we behave a bit more like a film company or a TV production company in terms of how we release content.

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So our members will always get the content first. They'll always get ex-exclusives. They'll always get extras. They always get it ad-free.

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So if you're a paying customer of Tortoise, you don't get any of the other elements to it. It all goes off-platform, but obviously then we do take ads, so we'll... We're happy with that, but that's not our core business.

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That's just kinda nice money that comes in at the end of every month, and we were like, "Oh, that's nice. Thanks for that."

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The intimacy, the point you make about that, is it works really well for us because I could say most people are invited to become members of Tortoise.

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And so when you're, when you love Bashir Cummins, who's the host of the Slow Newscast, and Bashir says, "Come and join me, I'm hosting a Think In", which is our news conference, so a live event, "Come and join us in our newsroom.

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I'd love you. Join as my friend."

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So everybody-- So I think the FT this morning shared that people are more likely to want to subscribe or pay for your content, having listened to your content, but they don't like the price that you're charging.

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So what we've done is we've actively priced our content so that the way that you're invited is always on a code. So we have an advertised price, but we don't expect anyone to pay that.

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And actually, we then have a sort of come in on my code, come in as my friend. I'm Bashir. Join as my friend, Bashir fifty. So we build it into the reads. We build it into the way they talk.

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Because the podcasts are often outputs of our Think Ins, we link it back to the fact that, oh, if you'd come to the Think In as a member, so you can be part of the newsroom, part of the conversation before it's the Think In.

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So it's interwoven into the product. It's a personal invitation from the host. It's r-realistic, ambitious goals. You know, we don't know. It's leaning into the platform.

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So, you know, Apple, the FT guy said earlier he didn't, he hasn't gone onto the premium Apple platform, right? Mm-hmm. Our view is do it because you need to learn.

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This is quite a new ecosystem, but there's a lot of interesting data out there.

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You know, there's, I think, actually some of the Reuters Institute data that said we know that seven percent of the UK audience are prepared to pay for news, but twenty-one percent of podcast listeners are prepared to pay for premium

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in the UK. Hmm. So the UK has one of the lowest propensities to pay for news in the world. Seven percent. Why is that? BBC. [laughs] Could be.

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So, but actually the podcasting, twenty-one percent, so you're three times more likely to pay if you really love what you're listening to. I think all of it... It's really early- Yeah...

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but I think all of the data is there to show you that this can be a really good way of taking an audience who's far more engaged than the audiences that we've been chasing in other forms of journalism and, for the right people, bring them into your paid-for proposition through events, through- Yeah...

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subscriptions, whatever it would be.

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And the interesting thing with Apple is, you know, i-if they start to see it working, right, and they start to see that happening, the next thing you would want Apple to do is connect the dot between someone who's paid for you and Apple Plus- Mm-hmm...

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in their premium podcasting to downloading your app so that you can actually join up the full membership experience from the- Yeah... frictionless pay there.

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So I mean, previous era, it was, like, super dependent on big technology platforms, and now you're sort of super dependent on big technology platforms? I am. [laughs] Meet the new boss, same as the old boss, I guess.

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Yeah. But we've learned some lessons- Okay... from the old behaviors. Well, one of the lessons I feel like we learned before, maybe on the flip side of this, was not to depend on one source of revenue. Mm-hmm.

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Like, you know, everyone put their, all their eggs in, in the advertising basket, and then it was like, uh-oh, maybe that's not the way. Now we need to have diversified revenue streams.

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But it sounds like you're not doing ads? We do have ads off-platform, but it's just nice money in bunts at the end of... I mean, it's when they say it's bunts, it's like six figures of bunts. It's quite nice money.

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But we don't really think about that as strategic revenue. So when we set up the business, to your point about diversification, we were very clear we needed two known, thinking that that might develop into others.

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So we started off by saying membership and partners.

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So we built a business that said membership ultimately will pay and underpin the independence of Tortoise, and we'll get to a point, but it takes a really long time to build a membership business, right?

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So whilst we're doing that, we're also gonna work with partners, and we made some mistakes. We, we did partner-branded Think Ins in the Tortoise world. We don't do those anymore.

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We basically are a content agency of recordFor corporates who want to have smart conversations and produce great content in their world.

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So they can employ Tortoise as a-- But we don't do any custom content in terms of we don't provide any media or access to our audience.

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So we've broken the custom content model from the media delivery side, but we still produce great conversations, great content, but we're like a content agency of record. So we don't have- Is that like white label?

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They're- Yes, in their world. Okay. For them, but it's our journalists and our quality. Like what's an example of that? So we have quite a number of retained clients, and they pay monthly retainers.

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It's an agency model- Okay... from Santander to Bank of America and others. And what percentage of revenue is that versus memberships? So we are fifty-fifty, sort of B to B and B to C.

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So B to B, we've now got ad revenue off platform. We've got the content agency of record model, which is sort of in their world, and we also have in, in the public space of Tortoise, we have coalitions.

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So where we want to have a conversation over time, a slow conversation around accelerating net zero, for example, we've got thirty-eight businesses and brands who are members of our coalition.

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So they basically join that coalition. They are part of those conversations, but no one brand sort of owns the conversation or sponsors it.

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But they bring their audiences as members to Tortoise, so it is a membership proposition, but it's linked to content. Yeah. That's the B to B model. Right. And it's fifty-fifty.

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I wanna get to, to, to other questions from the audience, but one of the things that I, I'm interested in is that this model, you usually see it wi- in niche topic areas, right?

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Like memberships can really, really work within niches, right? Yeah. But the editorial mission of Tortoise is a lot broader than that. Explain that sort of balance because it's, it's hard to be both, right?

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So like you, you tend to have to like optimize to something, and like a lot of times, you know, wi-with niches and membership models, it's just easier to optimize to that, where you have a breadth of content.

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We do have some niche membership products. Yeah. So there are sort of professional membership products. So I should have probably touched on.

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We have a responsible business suite, and they've got AI, food, investment- Yeah... and those people sort of pay sort of tens of thousands of pounds for a membership- Yeah...

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versus- But I mean the brand itself i-is- The consumer brand? Yes. Yeah, but we organize around... We're slightly less... We've got slightly less sections than a normal newspaper would have.

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We have five broad themes that we organize around, so our planet, the hundred-year life, capital, new things, belonging, identity, and culture. And that's- And as long as it-... everything. That's like life...

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fits into that- [laughs] Okay... then we're fine. Okay. [static] Thank you for listening this week. We will be back next week with a new episode. The Rebooting show is produced by Podhelpus.

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Podcasts are a great way to expand your client base. Podhelpus lets you focus on having engaging conversations, giving your brand the full stack of services needed for a professional look and sound.

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Start your podcast today at podhelp.us. [upbeat music]