How the 9-publication cooperative Brick House designed a revenue splitting system that could be a model for new media bundles

Maria Bustillos

Summary List Placement

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.”

SEE ALSO: Defector
Media is a case study in how to hit ‘refresh’ and start a
progressive new business after feeling burned by your past
employer

SEE ALSO: Substack
creators are making 6 figures off newsletters. Here’s how they
built their audiences from scratch.


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Source: FS – All – Entertainment – News
How the 9-publication cooperative Brick House designed a
revenue splitting system that could be a model for new media
bundles