The era of untrammelled growth in digital news subscriptions might be over before it truly began. Despite the high-profile successes of The Times, the NYT and The Washington Post among others, the needle hasn’t significantly moved when it comes to the number of people who are willing to pay for a digital news subscription. The latest Reuters Institute Digital News Report found that only single-digit proportions of people said they would subscribe to a digital news source.
Additionally it is the opinion of analysts including Lucy Kueng that the total number of digital news subscribers to a given title will never be enough to sustain the type of high-quality, international content to which news publishers aspire alone. Despite that, subscriptions and memberships are demonstrably a much sturdier and reliable source of revenue than many of their alternatives, with digital advertising in particular set to play an increasingly marginal role in total revenue.
Consequently, the game for news publishers is to add as many new subscribers as possible in the short-term, before the space becomes too crowded, while at the same time using the skills and tools developed to onboard those new subscribers to deepen the engagement with existing ones. While the KPIs are bound to shift, from growing logged-in users to decreasing churn as much as possible, the strategy behind digital subscriptions will remain the same: It’s all about deepening engagement.
At many publishers, that strategy rests upon new technology or tools for analysis.
The NYT, for instance, has invested in tools that allow it to measure user activity across its site and platforms. As a result of that investment it has discovered, among other things, that users who are particularly active across a variety of sections are far more likely to become loyal customers. Though it seems like an obvious conclusion to draw, it has informed everything from how the NYT thinks about and measures engagement to how it markets its subscriptions.
The same activity is underway at The Washington Post, but with more of a focus on surfacing the sorts of content that add value to a subscription beyond the articles they normally see. Miki King, its VP Marketing, told WAN-IFRA that:
“We recently launched a rebirth of our food section, around casual meal preparation and tutorials, and how we’re letting our subscribers know that this is part of the value we offer them.”
Similarly, WELT is currently developing a specific Loyalty Score, which is set to measure the activity of its logged-in users. This will eventually allow the title to source specific articles to its users that it knows are more likely to appeal to them, over time deepening the engagement with its readers.
However, there is still the implication that onboarding a significant number of logged-in users and subscribers is not a long-term strategy: There are a finite number of potential users and an even smaller proportion of those who will pay for a subscription. That’s especially true as the space becomes more crowded: News UK’s Chris Duncan has previously argued that global total potential digital subscriber numbers will only sustain 10 international newsbrands all told.
Consequently publishers are looking to more jealously guard their current subscribers, with engagement again being at the heart of that strategy. To prevent them from jumping ship, media companies are again using tech to achieve the holy grail of media distribution: Truly personalised content.
Norway’s Amedia, for example, has developed an Engagement Index that is being implemented across its brands, and is in turn based on the Financial Times’ model for reducing churn. WAN-IFRA’s Engaged Readers Don’t Churn report states that the preliminary results of the Index’s implementation demonstrate it predicts user retention with up to 90% accuracy.
Schibsted’s ongoing investment in a brand-wide techstack is also in service of measuring propensity to re-up a subscription. The metrics provided allow publishers to reiterate on their publishing strategies to both attract new readers to log-in, to pay, and ultimately to retain users. Tor Jacobsen, SVP Consumer Marketing and Revenue at Schibsted Media, explains:
“What we are also testing is that we are doing some touch points now in the product, so everything from if you have a question, you want to stock the newspaper, or suggestions for articles, also the on-boarding process or personalised offers, which we know is very very good for you. We have some possibilities now digitally which we didn’t really have in print. It needs to be done in a way that the subscribers see that this is an advantage for me, that’s useful for me, and I feel it’s all good when I come inside.”
In the UK, The Times & Sunday Times are also going all-in on that promise of personalisation – but acknowledge that it won’t be the point of differentiation that it might once have been. Peter Evia-Rhodes, Head of Engagement, Operations & Retention at News UK, says:
“You can chase volume, if you think about your RPUs and your revenue position, there are always customers at different price points that you can acquire. What we want to do of course is have sustainable growth. We want to look at the ad revenue decline and make sure that we are not just overcoming that but actually growing in terms of what our revenue build is as well. The biggest challenge we’ve got is everyone is moving into this personalisation space, so I think what we’re trying to embark on will be replicated.”
Even with all the tech and strategy in the world, all those endeavours are in service of eking out as much as is possible from a finite resource. Propensity to pay for digital news is still low, and while the quality of news behind paywalls might be perceived to be higher, there are still free news sources available. Additionally, the success of smaller paywalled sites is largely due to their specificity. The poster boys for the smaller subs-based publishers – The Information, Stratechery – are much more specific in nature, while legacy publishers are typically generalist, increasing their exposure to competition.
Growing digital subscriber numbers and reducing churn is vital for publishers, as subscriptions necessarily become one strand of a more diverse revenue model. They aren’t a magic bullet, but owning enough of the subscription space early through strategies like the ones mentioned in this article puts publishers in a much healthier place as they find and develop those other revenue strands.