Digital Publishing Reader Revenue
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Are free subscription trials more effective than paid ones?

Der Spiegel’s experience suggests freebies are less effective

Media chased subscriptions and reader revenue in 2020, looking to compensate for falling ad sales. To grow subscriptions, many offered free trials, as a way to entice people who would later switch to paid versions. The unanswered question is just how effective such a strategy is.

At the Reinventing Media Business forum, Head of Subscription Growth at Spiegel Wiebke Meeder shared Spiegel’s insights on instituting a paywall and testing different trial models. We picked key insights from her presentation.

The story of Der Spiegel

German news magazine Spiegel is one of the largest media publications in Europe. As early as 1994, Spiegel launched its news website. Over 25 years, the outlet has experimented with various monetisation models before launching Spiegel+ in 2018.

Spiegel+ is a flat-rate platform for all premium content on the website, as well as for access to Spiegel’s digital magazine. It counts some 170,00 paying subscribers. Stories on main topics are generally offered for free, while analytical articles and interviews are behind the paywall.

One of the questions Spiegel’s team has been focusing on is building a successful trial model. Before early 2020, Spiegel+ offered a free trial for all new subscribers. However, when COVID-19 hit off, Spiegel saw a huge spike of traffic and subscriptions (as did most other publishers), prompting the team to develop a pricing strategy for the trial phase.

Testing free trials vs. paid trials

The assessment was made in three iterations. During the first phase, the paywall itself continued to offer a free trial. Meanwhile, other displaying formats — such as banners — marketed other offerings. The goal was to ensure a smooth transition while testing audience readiness to pay without freebies as an incentive.

The first iteration showed a “deep acceptance of the pricing models”. So, the next phase expanded the test to a special trial offer of 1€ for the first month (on the whole platform, including the paywall). Surprisingly, conversions didn’t decline but rather increased.

The third iteration, tested three offers against each other — 1€ for the 1st month, 5€ for the 1st month, and 30€ for 3 months. The results showed a better conversion rate than for free trials, with 48% of people taking the 1€ offer, 29% choosing the 5€ offer, and 23% paying 30€ for 3 months.

Results and lessons learned

Throughout the test, Spiegel attracted around 40,000 new subscribers — an unexpectedly high number. Although it’s too early to determine churn rates, paid trial subscribers overall tend to value the content more. Moreover, they are more likely to keep their subscriptions than those who had a free trial.

According to Meeder, this experiment shows several insights. Most importantly, people do pay for a trial phase, and free trials don’t perform better than paid ones. Besides, it’s useful to experiment with different price points as they can attract different subscribers — and perhaps more subscribers — than just one. It’s also necessary to communicate the terms transparently to potential subscribers. Finally, it’s highly important to onboard editorial staff and keep them on the same page.

By Mariia Iskorkina

This piece was originally published in The Fix and is re-published with permission. The Fix is a solutions-oriented publication focusing on the European media scene. Subscribe to its bi-monthly newsletter here.

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