Welcome to Racket’s second annual report.
In year one, we told you we might not issue a new Racket report every year, because there might not be anything all that revealing to say in another 12 months. But this has been a year of pretty significant growth for us, and besides, although we’re not a publicly traded company and therefore aren’t required by law to prepare and publish reports for investors, we continue to feel a sense of responsibility to you, our subscribers, without whom we simply would not exist. That’s why we’re once again busting open the books, à la Jon Taffer, to give you an in-depth look at how we spent every dollar in year two.
If you’re new here, hi! This report follows the same format of our first annual report, which in turn follows the format of Defector’s first annual report. Some of the basics, and frankly some of the specifics, will be paraphrased from last year’s report, which you can find here.
On to the numbers!
Financial Summary
Breaking Down The Numbers
Roughly 80% of our year-two revenue came from paid subscriptions to our website, which means reader subscriptions continue to be the fuel that keeps the ol’ Racket engine chugging along. We have 3,606 active subscribers as of July 25, 2023. Of those, 2,946 are at the Lookout subscriber tier ($5 a month, $50 a year); 648 are at the Accomplice tier ($10 a month, $100 a year); and 12 are Racketeers ($99 a month, $999 a year). Our churn rate—the proportion of subscribers who once held a subscription, but no longer do—is at 1.3% this year. That’s far below the average for subscription companies, which a quick and theoretically reliable Google search reveals is between 6-8%.
We’ve continued our tortoise-style, slow and steady growth here in year two, adding around 100-ish new subscribers a month. This year’s biggest growth pop came from our so-called Spring Super Sale, when 375 folks seized on half-off subscriptions. We had 2,702 active subscribers at the time of our year one report, so the numbers are going in the right direction!
Our remaining year-two revenue came almost entirely from website sponsorships with local businesses, venues, museums, and galleries. This was an area of significant growth for us in year two. We’ve continued our partnership with Arts Ink, Inc., a creative nonprofit that does communications and brand strategy for area arts organizations. Arts Ink has helped us connect with a growing number of newsletter and website sponsors that includes many new faces (including the Minnesota Orchestra, Northrop at the University of Minnesota, and The Cowles Center) in addition to long-running sponsors (including the Dakota, the Walker Art Center, Live Nation, and the Minnesota Opera). This arrangement lets us be thoughtful about who we do and do not partner with, and we continue to have full control over the sponsors you see on our site.
This year, we also experimented with our first themed-content partnerships. In October, we celebrated Weed Week, with five days of THC-related stories sponsored by the local edible brand Baja Ontario. (We’re a 100% sponcon-free outlet, to be clear; Baja told us they’d like to partner for their launch, and we agreed to time it to a week of independently reported weed features.) We also joined The Twin Cities Media Group, a collaborative effort between Racket, Southwest Voices, Heavy Table, New Prensa, North News, and KRSM that helps advertisers reach readers in the Twin Cities without relying on Facebook or Instagram ads. Sponsorships sold through the TCMG have netted us $1,200, with more on the way. Also new for us: We made $2,500 thanks to a speaking gig at the University of Minnesota's Communicators Forum on June 7.
Racket’s four owner-editors nearly doubled our take-home pay from year one, which is pretty incredible, and, quite candidly, a huge relief. Have you seen the cost of a dozen eggs these days?? We love the work we do, but we also want it to be sustainable enough for us to keep doing it long into the future. If you agree that the Twin Cities media scene is improved with a viable alt weekly-style presence and you're not among the 3,600 who've already pitched in, please help make that possible.
The Website
Other than paying ourselves and our freelancers, the bulk of our expenses once again went to the operation of the website itself. We’re still collaborating with the independent publishing platform Alley Lede, with whom we entered a three-year agreement at the time of our launch, giving them a percentage of our revenue in exchange for their building and maintaining the technical side of the website.
In March, we moved off the Pico platform, which we had been using for subscription and paywall management, and we now use a proprietary system developed by Alley Lede. We continue to use Coral for commenting (now with new and improved features, like the ability to add an avatar, thread comments, and share GIFs), and the new platform still collects subscriber payments through Stripe. We also pay for a handful of other third-party platforms including Google Workspace, though we’ve transitioned from MailChimp to SendGrid for our daily and weekly newsletters. Cutting ties with Pico and moving from MailChimp has already saved us thousands of dollars since March. (Our MailChimp subscription alone cost $250 a month; Pico charged us $75 a month plus 5% on every transaction.)
As in year one, our soft paywall is the number-one way we attract new subscribers. Any new visitor to the site is able to read a few stories per month before they’re asked to give us their email address, allowing them to read a few more stories each month. At the time they fork over their email, readers are also able to opt-in to our free daily and weekly newsletters: The Flyover, ICYMI, Event Horizon, and The Freeloader. (Subscribers at the Accomplice tier receive access to the enviable Accomplice Advanced newsletter, which shares our weekly feature story the night before its publication.)
How Racket Works
It’s pretty straightforward: We're registered as an LLC (Goof Responsibly, LLC, to be exact). All four co-owners own a 25% stake in the company. There are no titles, and we all pull the exact same salary. We have received no capital from outside investors; we each put up $1,000 of our own money in 2021 to cover the initial expenses involved in getting Racket off the ground.
Additional Operating Expense Details
Still pretty low! Racket’s four full-time staffers handle everything from customer service to merch processing to accounting in-house; if you’ve ever emailed us about a technical issue or a question about your subscription, you know it’s one of us who gets back to you. We don’t have an office space, opting instead to work from home or “in the field” (journalism term), with periodic meetings at local restaurants, bars, etc. This means payments to freelancers and general reporting costs were among the biggest chunk of our expenses this year—Hippo Pockets and Marty’s Deli sandwiches don’t pay for themselves.
One of our biggest up-front costs in year one was insurance, including media liability insurance. We saved $6,000 on that front this year with a new rate customized for online newsrooms. We have again periodically relied on the counsel of lawyer-for-cool-locals Blake Iverson at Eastlake Legal, who helped us finalize our operating agreement, reviews contracts, and provides his insight on stories that might come under legal scrutiny. (He advised us, correctly, to not sweat the Pillow Man’s less-than-hinged informal legal threats against us.)
We stopped experimenting with paid advertising on Facebook; it just doesn’t feel like the minimal conversions from Facebook ads justify the icky feeling we get giving Facebook (and/or Meta) money. We briefly tried out Google Ads, but found we don’t have the expertise to really make it work for us. (Most of the paid visits to the site were for people who had already Googled “Racket” or “Racket MN,” which made it feel… not unlike flushing money directly down the toilet.) So far we haven’t done any advertising with Twitter or Instagram, and at this point it seems unlikely we’ll explore either option.
The Traffic
We didn’t change much with regard to our publishing strategy this year. As in year one, we don’t have pageview or story quotas to hit for advertisers and/or bosses. There’s still no obligation to fire off half-baked takes about the top news story of the day or puke up quick, 150-word blogs and tweet-length posts to chum for casual readers.
Once again, popular stories have been the number-one thing that promotes subscriber growth. Typically, these are stories that Racket has an exclusive on, whether that’s because we’re breaking the news (for example, with our report on the discontinuation of the Nice Ride program), or because it’s a deeply reported feature (like Jay’s investigation into the tailings basin at Milepost 7), or because it’s something really dumb with a unique Racket perspective (say, this first-person account of a college educator who got and quit six summer jobs in six weeks).
Interestingly enough, we’re starting to see that the latter two types of stories bring in more subscriptions than breaking news stories do. Stories like Nice Ride are big for Racket at first—but within hours, other, larger news outlets start to pick it up and publish stories of their own. Some credit us; some don’t. And that means people can find the news anywhere, not just here. It doesn’t feel like a story that’s unique to Racket; it’s just something that’s out there in the universe. The traffic bump doesn’t last long, and we don’t see a meaningful subscriber jump.
This doesn’t mean we’re going to stop breaking news—there’s no better feeling! But it does mean that, yes, to this day, the best compliment one of us can give another is, “That’s a real Racket story,” or something you wouldn’t see anywhere else in the local news universe.
We topped 2.7 million pageviews in year two—up from just shy of 2 million in year one. Most months, we welcome between 150,000 and 200,000 visitors to the site.
In year two, we published 979 articles on Racket, bringing our total number of posts to 1,963. Here are the 10 most-read stories from the last year:
- An Obscure German Drinking Tradition is Taking Over Twin Cities Breweries: 23,892
- Wanna Buy 3 Giant, Vacant Minneapolis Public Schools?: 24,403
- Here’s What Makes Eden Prairie’s New, Massive Asia Mall Worth the Trip: 24,991
- The Lost Lakes of Minneapolis: 25,981
- Wanna Buy This Affordable Hobbit House Just 30 Minutes East of St. Paul?: 26,685
- Hardee’s GM on Lindell FBI Raid: ‘I Know For a Fact It Didn’t Happen’: 27,919
- What We Know About the Death of Khalil Ahmad Azad: 32,485
- Wanna Buy the Most Expensive House in Minnesota? (Complete with Record-Setting Flagpole!): 32,676
- Who Is Brooke Fleetwood, the Airbnb/Beauty Mogul Who’s Often at War with Hudson, WI?: 35,863
- There’s a Massive, Hidden Lake of Mining Residue Above the North Shore. It Might Grow: 47,716
I want to emphasize that high-traffic stories are not necessarily the ones we’re proudest of, or the ones that are most important, or even the ones that generate the most new subscriptions. (Often, it feels like there’s an almost inverse correlation; our most read story of all time is still our ranking of grocery store rotisserie chickens, which soared, un-chicken-like, to 100,000+ views.)
With that in mind, here are some of the year two stories we’re quite proud of that didn’t crack the top 10:
- What Killed the Twin Cities Music Festivals?
- Let’s Take a Ride with a Minneapolis Bike Bus
- It’s Time for Twin Cities Chefs to Embrace Spam
- ‘Passion for the Hole’: The Uptown Sinkhole Has Become a Social Hotspot
- Would You Like Something Notarized with That?
- My Bleak Day at the Star-Studded, Get-Rich-Quick Jesus Jamboree
- My Teen Niece Helps Explain the Taylor Swift Show I Saw on Saturday
- Flea of the Red Hot Chili Peppers Is Right: Minneapolis Has a Public Bathroom Problem
- I Beat Cancer and All I Got Was the Lousy Personal Essay
- Can A.I. Chatbots Replace Racket?
- I Saw 30 Concerts in 30 Days
- What Happens When Progressive Companies Meet Unionizing Workers?
- After 120+ Years, the Minnesota Daily Quietly Killed Its Print Edition
- How Did Covid Change Twin Cities Restaurants? We’re Still Finding Out.
- Remembering One of the Last Punk Houses In South Minneapolis
I’d also like to highlight some of the tremendous work done by Racket freelancers this year. We collaborated with more than 30 new freelancers in year two and continued to work with many of the 50+ freelancers who contributed to our website in year one. Alternative weeklies like City Pages often provided young writers with their first bylines, and we are proud to carry on that tradition of teaching and showcasing budding local talent. (Unlike CP in its later years, which was de-facto owned by a billionaire, we make a point of paying decent freelance rates.)
Stories written by freelancers that generated a large number of pageviews, reader discussion, and/or new subscriptions during this year include:
- We Spent 38 Consecutive Hours Inside the Mall of America
- Meet the Twin Cities Wyverns, Your Local Armored Combat Squad
- How to Become a Professional Wrestler in 5 Weeks
- The City Slicker’s Guide to Twin Cities Auto Racing
- A U of M Reporter Explores BORG, the Latest Binge-Drinking Craze
- The 10 Best Liquor Stores in Minneapolis and St. Paul
- The Worst Bike Lanes in Minneapolis and St. Paul
- Is Minnesota Forever Doomed to Smoky Summer Skies?
- I Baked a Coffee Cake With Local Social Media Celebrity Sam Schedler
- Urban Lights, MN’s Only Black-Owned Record Store, Turns 30
- Why Does the Hy-Vee Bar Fuck So Hard?
Also New in Year Two
Brand awareness remains a hurdle for us, and while we’re no longer using Google or Facebook ads to reach new readers, we are, of course, still trying to reach new readers. To do so, we’re increasingly relying on partnerships with other local businesses and arts organizations. This year, we sponsored a film series at the Trylon and shows at First Avenue and The Fillmore.
Some of these local partners also participated in giveaways, a number of which were accessible to all Racket readers via social media, and many more of which were available exclusively to Racket subscribers via email. We gave away hundreds of tickets to dozens of shows at The Fillmore, The Dakota, and First Ave, for example, and boxes upon boxes of Baja Ontario edibles.
On the editorial side, we introduced new columns including Weed Weviews—Jessica’s monthly roundup of THC treats—and Keith’s weekly playlists of new local and national music. We welcomed a new Doin’ Beers columnist, Nissa Mitchell, who knows a hell of a lot about beer and writes about it in a way that’s a hell of a lot of fun to read. Our popular Money Journal series debuted last October, but after 20 installments it’s currently on life support. (Submit one to help save it!) To encourage commenting, and just to get to know the folks behind the usernames and avatars we love, we started doing Friday Open Threads—come say hi sometime, if you haven’t already.
Oh, and we’ll be at the Minnesota Society of Professional Journalists banquet later this week accepting a few awards on Racket’s behalf. (We didn’t submit any of our work for the MN SPJ Page One Awards last year.)
So How'd We Do on the Goals We Set for Ourselves Last Year?
Pretty well! Let’s take ‘em one by one:
Increase the number of paid subscribers to the site: ✓
In July 2022, we had 2,702 readers with Racket memberships, and at this writing, we’re looking at 3,606 subscribers.
Introduce a tip jar with pay-it-forward subscriptions: ✓
We hoped this would happen before the end of 2022, but the tip jar launch was delayed until May of this year. Everything takes longer than you think it will! But we’re happy to report that from May through today, we’ve collected more than $1,200 in tip jar funds, which covers 24 pro bono subscriptions for students or folks in financial need. Want to throw a few bucks to the cause? You can do that here. Want to take advantage of a free tip jar subscription? Email us here.
Pursue web and newsletter sponsorships: ✓
We had many more sponsors this year than in year one, and believe that this will continue to be an area in which we’ll see a lot of growth.
Work with more freelancers: ✓
Many new voices graced Racket’s digital pages this year: Cecilia Johnson, Brian Fanelli, Farah Habad, Brendan Kennealy, and Sophie Nikitas, to name just a handful of them.
Do… something with video and audio:
We haven’t quite figured out how audio and video fit into the Racket equation. So far, it’s felt like we’re not yet a well-oiled enough machine to introduce a podcast; everyone’s days are filled as it is, and we wouldn’t want to have a podcast just for the sake of having one.
Host more events:
Similarly, events have proven to be one thing too many to organize on top of everything else. We will, however, have a second birthday party on August 26 at Fair State, so mark your calendars.
So how about our goals and schemes for year three?
We’d like to check off those unmet goals from year one, for sure. Part of our plan to make events happen is to host smaller, happy hour/office hour-type gatherings, which would require less planning and less of a time investment, but would let us meet people in the community instead of just online.
Will this be the year we finally get a podcast off the ground? Signs point to yes! We have the technology and the willingness to make them; the last piece of the puzzle will be finding the time to record and edit them. If you have thoughts about what you’d like to hear us ramble aloud about, send us an email.
We want to continue adding new voices to Racket’s roster of talented contributors. If you have a story idea you think would be a good fit for us, please email us at pitches@racketmn.com; we have pitching guidelines for hopeful freelancers here.
Our number-one goal is once again to add new subscribers. With monthly traffic that hovers in the neighborhood of 150,000-200,000 visitors, we know there are yet-to-be-converted Racket readers out there. We’ll get you sooner or later!
And as for Y’all…
We can’t thank you enough for being here. Two years is not a very long time to run a business, and we still spend a lot of time figuring things out on the fly. “What’s a fair speaking fee?” “Google 4xx indexing issue explained?” “YouTube embed block not working WordPress?” These are just some of the mysteries of small business ownership we’ve googled over the last several months.
We’re honestly kind of blown away by the growth Racket has experienced in year two, both literally, in terms of our numbers, and figuratively, in a “look at us figuring out who we are and what we want to do” sort of sense. As we enter year three, we want to tell you again how happy we are that you’re coming on this weird journey with us, and to remind you that you can reach us by email at literally any time. To all of our subscribers, and to everyone who read, shared, commented on, laughed at, or complained about Racket stories over the last year… we love ya.
