How the Brick House Cooperative divides its revenue from media bundle – Business Insider

  • The Brick House Cooperative is a group of nine independent publications that operate under one umbrella.
  • To make clear how the publications would conduct business, they created a 25-page legal document called an operating agreement, which Brick House Cooperative founder Maria Bustillos shared with Insider.
  • The document lays out the unique way the publications divide revenue and split ownership.
  • One month after its launch, the Brick House Cooperative has nearly everything 1,800 paying subscribers and has generated more than $100,000 in subscription revenue.
  • Visit Business Insider’s homepage for more stories.

Last August, nine independent publications joined in a collective experiment: banding together, they formed the Brick House Cooperative, a media company that would be worker-owned, subscription-based, and free of formal investment.

The veteran journalist Maria Bustillos, who is the leader of the project and the founder of “alt-global” online magazine Popula, said the goal was to create a “wolf-proof” media organization whose ownership and payment structures safeguarded against internal division and external threats.

The nine participating publications cover distinctly different subject matter, ranging from investigative news at Sludge and faith at Preachy, to African politics at Olongo Africa and comics at Awry. The common link between most of them is their shared experience at the now-defunct Civil, a cryptocurrency-backed publishing platform that launched in 2017 and shuttered in June. Rather than discourage Bustillos, the closure of Civil pushed her to continue experimenting with new ways to fund journalism, which led to the Brick House Cooperative.

To finance the project, the collective launched a Kickstarter campaign on August 25 and closed it September 25. In total, the effort raised $90,668 from 1,321 backers — 813 of whom subscribed, paying either $7 per month or $75 per year for access to all nine member publications.

When the Brick House Cooperative officially launched on December 8, it also imported Popula’s roughly 500 subscribers, bringing its total number of paying members to around 1,300. By early January, one month into its existence, the cooperative has gained 500 more subscribers, increasing its total number of paying members to just under 1,800 and bumping its revenue up $10,000, to just north of $100,000 in total, according to documents reviewed by Insider.

To determine how this revenue would be split among publications, and to codify the collective’s rules more generally, the Brick House Cooperative created a 25-page operating agreement. This agreement, which Bustillos shared with Insider, describes how the group will divide profits, oust members, decide internal debates, and other operational matters. 

The document offers an intriguing blueprint for entrepreneurship, media or otherwise, by laying out a vision for how individual businesses can work together in a loose collective. Models like these are freshly relevant thanks to the recent proliferation of single-operator newsletters using platforms like Substack and the growing creator economy, as players in both of these ecosystems could use the Brick House structure as a framework for how to bundle independent ventures without sacrificing autonomy. 

Brick House’s fundraising method and its early success are also notable, especially given the skepticism of some toward venture capital-backed media companies, whose nature demands returns on investment that can sometimes prioritize growth over long-term sustainability.

If Bustillos’ experiment is successful, she and her colleagues will have proven another viable pathway for sustainable, worker-centric enterprise.

“Our principal goal is to build a safe haven where journalists, artists, editors, and publishers can generate, not profits, but a sustainable amount of money for the continued freedom to publish as we wish,” Bustillos said. “In time, there should be enough for modest salaries for all participants; there is nobody involved who is looking to get rich from this.”

Nine shares, nine dollars

As its name implies, the Brick House Cooperative aims to provide its members with stability by sharing ownership, splitting profits, and eschewing advertising and formal investment.

Bustillos and her colleagues envisioned the structure of the organization as protection against the vulnerabilities of the modern media business, specifically conflicts of interest stemming from corporate sponsorship and external investors’ insistence on growth over sustainability.

Like Defector Media and Discourse Blog, two worker-owned publications that launched in the last six months, the Brick House Cooperative vests its power in its employees. Unlike Defector and Discourse though, the Brick House Cooperative is not one publication but nine, working together.

Each of these publications has one share in the cooperative, which they purchased for $1. If a new member wants to join and is admitted (which requires a 75% vote), they can purchase a share for $1. If a member publication wants to leave or is ousted (which requires a 75% vote), they sell their share back for $1. 

Shares cannot be traded, no one can own more than one, and they do not appreciate in value. Bustillos said the point of this system, rather than one that allows transferable equity, is to provide stability to the founders and the cooperative.

“The entire structure is dedicated to: If it grows, the people who are in it are the ones who are going to benefit,” Bustillos said.

Splitting the revenue

Currently, the Brick House Cooperative site has no paywall, though the group plans to implement one in the next few months, and has been selling subscriptions in advance of the tech roll-out. Readers will be prompted to subscribe after reading between three to four articles, Bustillos said.

When a user subscribes to Brick House, they gain access to all nine publications’ writing. Instead of taking that revenue and splitting it equally among the nine member publications, the architects of the Brick House Cooperative created a pay structure that balances their cooperative ethos with an eat-what-you-kill incentive model. 

Using web analytics, the Brick House team can tell if a reader subscribed after reading a specific publication or whether they signed up from the home page. If a reader signed up from the home page, the cooperative itself keeps 75% of the revenue, 10% is distributed equally among the member publications, and 15% is distributed among member publications in proportion to their share of the total number of bylined articles.

If a reader subscribed directly after reading a specific publication, that publication receives 50% of the revenue, 25% goes to the cooperative, 10% is distributed equally among the member publications, and 15% is distributed among member publications in proportion to their share of the total number of bylined articles. 

The operating agreement stipulates that member publications must publish a minimum of two articles per week, but there is no maximum. Given that 15% of subscription revenue is distributed based on proportion of bylined articles, this could incentivize publications to publish more frequently.

The operating agreement also lays out specific revenue splits for non-subscription revenue and future crowdfunding efforts, which divide the money similarly between the members and the cooperative as a whole. At the end of the fiscal year, Brick House plans to distribute equally any excess cash it has accumulated through these revenue splits.

According to Bustillos, the operating agreement reflects the founders’ best attempts to navigate competing interests within the organization, but she said they will tweak any part that isn’t working. Longevity, not perfection, is the goal.

“What we are is more like a rave in a parking garage,” Bustillos said. “The real objective is not to turn a profit, but to keep the party going.”

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