The balance of media business models is finally tipping towards reader revenues. Publishers are finding that they can charge for quality digital content. High profile news brands like the New York Times, Wall Street Journal and Washington Post all have over 1 million digital subscribers. Our very own FT and Economist are not far behind. And for the New York Times, digital subscription revenue is now almost half their total circulation revenue.
At the recent 2020 Publishing Conference in London, I presented my thoughts on what seems to be working for publishers growing their digital subscription revenue. This article is a summary of my talk.
Why should you move to reader revenue?
For publishers who have operated an ad-funded model with free content, moving to reader revenue is a smart way to diversify revenue sources and reduce reliance on the volatile ad market. Being able to track what your subscribers read provides a whole new level of insight into what content is valued. And building a stronger relationship with subscribers creates the opportunity to cross sell targeted events and other paid products. Plus, subscriptions are a predictable, renewable revenue stream, providing more certainty for your business (and adding value if you ever wish to sell).
What works in digital subscriptions?
Looking at examples of successful subscription publishers there are some lessons to be learnt:
Bundling related content
Publishers typically offer a bundle of print publications and digital access, plus other content such as digital archive access, online learning modules, or early access to a podcast, as well as dedicated e-newsletters, offers and events.
Show free readers what subs get
Le Monde has grown its digital subs by 20%. A key part of this was a home page redesign, where free readers could see the articles that were locked for subscribers only. They have experimented with the balance of free vs paid content, and now believe that for them the ideal ratio is 63% free and 37% behind the paywall.
Test offers and pricing
Different segments of your audience might respond to different offers, so it pays to test exhaustively, eg 4 weeks for $1, 12 weeks at 50% off etc…. NYT and Economist have experimented with their metered models – changing the number of free articles that can be viewed before the wall comes down. There seems to be a move to tougher paywalls for both.
Learning what content drives subs
Smart publishers can also track which were the articles or pieces of content that trigger a paid subscription. This can often be the longer, more in-depth pieces rather than the short newsy items.
Flexible, personalised paywalls
The Wall Street Journal has a paywall that uses machine learning to score subs on their propensity to subscribe and adjusts the number of stories they can view for free before hitting a subscription offer.
Selling enterprise subscriptions
Many B2B publishers are identifying organisations where multiple staff have individual subscriptions and repackaging enterprise level subs, including print copies, digital logins and event passes. This allows them to expand readers while reducing marginal costs. And the data on organisational reading behaviour is invaluable at renewal time. But this does require a different skill set for your sales team.
Creating a membership package
Part of the value of B2B or specialist consumer publication is the ability to connect with industry peers or like-minded people. So many publishers are evolving their subscription propositions into membership packages, with opportunities to connect with other members online, or at live events.
Adding valuable services
Politico Europe has grown its subscription business by 50% in 2018. Their Pro packages are sold at enterprise level: €7k for 5 logins, and are segmented by topic, from Data to Brexit. They have created an additional Intelligence product, which curates a feed of all new EU regulations and political developments, which subscribers can customise to meet their interests.
Focussing on retention
The Economist is a digital subs success story, with 350k digital subscribers. They are now putting 70% of their marketing resources into retention, with new subs receiving welcome emails from the editor, and a special, redesigned app that prompts reading more articles.
How to move from free to paid
Establishing a paid digital subscription proposition when your content has been free is a significant project, but worth the investment of time and resource. Here are the key steps in the process.
1. Know your content and audience
This step is all about research: segmenting your audience, analysing their current behaviour, and also interviewing them to find out what they value, which might well be content you don’t already produce.
2. How to package and price
Review the competition in detail and work out how to add valuable extras to your subs package that meet currently unserved needs. Consider monthly or quarterly options to minimise the upfront cost and think about how you would price enterprise subs as well as individual options.
3. Balance with ad revenue
Each market has its perfect balance point, where you have enough free content to attract prospective subscribers, and satisfy advertisers, but you also convert enough to paid subscribers. Moving to subscriptions can generate new commercial opportunities, from newsletter sponsorship to the premium quality of the subscriber audience itself.
4. What type of paywall
A key decision is whether you split your content between “always free” and “always paid” or operate a metered model where registered readers can sample the premium content to a limited level.
5. Choosing a tech platform
If you don’t have the expertise in-house to build and maintain a paywall, there are plenty of outsourced platforms targeting the publishing market. But think hard about their future development plans as it is a major project to switch suppliers and migrate content and subscriber data.
6. How to market
Here you need to construct your perfect marketing funnel, using social media or events to gather interested readers, engage them with free options such as a newsletter, then encourage them to take a trial and eventually convert to paid subs.
7. Hire in experts
Subscription marketing requires a new set of skills: online conversion, free trials, data analysis, marketing automation, enterprise sales. If your team don’t have these skills then it’s worth hiring in from relevant sectors such as ecommerce and SaaS or bringing in external agencies to work alongside and upskill your team.
If you’re contemplating a move from free to paid content, do get in touch and I’ll be happy to share more insights from my work with other publishers tackling this process.