How Talking Points Memo has converted from an ad model to paid subscriptions

Readers now supply more than half the site's revenue.

Josh Marshall started out as a political blogger in 2000, made a business of it in 2003, won a George Polk Award, and has managed to stay independent through all the wild swings of the digital pendulum.

So his reflections on how to transition from an advertising business model to paid subscriptions have a certain authority.

He talked about the evolving business model of his site, Talking Points Memo, in a 47-minute podcast with Digiday Editor Brian Morrissey. Among Marshall's observations that are relevant to other would-be news entrepreneurs:

• Small, independent news sites cannot rely on scale to drive revenue. They need a strong relationship with their users. Many digital media organizations that have massive audiences will not be able to make the transition to paid subscriptions because they don't have that relationship, he believes.

• Many of the 26,000 paid subscribers to TPM, which are now supplying just over half the site's revenue, pay because they support the mission of the publication, which "draws on readers' knowledge to break stories." The sales pitch for the $50 Prime product is that you get "warm, fuzzy feelings from supporting independent journalism".

2 niche startups that attracted investors

Email has an intimacy that TheSkimm has used to build a loyal base of 7 million subscribers.

Digiday has a weekly podcast about the business of digital media, and two recent interviews with founders of startups had nuggets of wisdom applicable to any media startup.

Digiday's editor-in-chief, Brian Morrissey, interviewed The Business of Fashion's Imran Amed about its move to a subscription model, and the founders of TheSkimm, Carly Zakin and Danielle Weisberg, about how they used email to build a loyal community.

Elements of their success formulas

1. Passion for a topic that you can develop in a way that no one else is doing.

a) Amed, then a consultant for McKinsey &. Co., began writing a blog in 2007 that talked about fashion as a business. He felt that no one was exploring the meaning of the numbers behind the leading fashion businesses. Over time, he developed a loyal audience who began suggesting ways he could monetize that audience.

b) Zakin and Weisberg were both 25 years old and producers for NBC television news when they decided in 2012 to launch TheSkimm. They were frustrated at the time that none of their friends were seeing their best work. Their friends didn't watch TV news. So they started an e-mail newsletter that aggregated what they thought was the most significant news that young professional women like themselves needed to know for their professional and personal lives.

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2. Build community first. Opportunities for monetization will present themselves.

a) Amed told Morrissey that he had been blogging about the fashion business for years in his spare time and had to hire an assistant to handle all the inbound traffic and questions. It was only after six years, in 2013, that Business of Fashion launched their first commercial product, a careers platform in which brands could advertise themselves and their open positions to the publication's audience. This platform was financed with $2.1 million from various investors.