For news publishers around the world, consumer revenue continues to be a pressing issue. With ad revenue falling year after year and usage of ad blockers on the rise, more and more publishers are employing a host of reader revenue strategies— including membership, subscriptions, paywalls and more—asking their readers and viewers directly to support their work.
However, many are finding that setting up a clear and actionable strategy for building reader revenue into their business model isn’t easy, and there are numerous options to consider and weigh up.
For publishers looking to develop a stronger digital subscription strategy, The Lenfest Institute’s report Digital Subscription Reader Revenue: Benchmarks & Best Practices from 500+ Publications Worldwide provides a range of clear, actionable insights.
The benchmarks and best practices in the report come from over 500 publishers across a range of different kinds of publications over the course of several years.
Why digital subscriptions?
The Lenfest Institute’s report outlines how ad revenue is down across the news industry, and in order to be sustainable, news organizations must find new, recurring digital revenue sources.
Yet while news organizations are being forced to adapt, there are a lot of challenges to overcome, including huge consumer choice, low recognition of individual news brands, a constant negative cycle of chasing page views and increasingly low-margin digital advertising revenue, and most of all, lack of negotiating power against the tech giants. Power and profitability in digital advertising largely reside with advertising technology companies and major platforms (a.k.a. The Duopoly, followed closely behind by Amazon).
Since an advertising-only digital strategy can have negative ramifications for sustained, quality journalism, digital subscriptions make serving quality journalism to readers the number one business priority for publishers.
Digital subscriptions make serving quality journalism to readers your number one business priority.
Key insights from The Lenfest Institute’s report:
The metered model: Not a paywall
According to the report, just five years ago, nearly all digital news was free. Publishers believed users would not pay for content and feared losing ad revenue. Today, most U.S. newspapers (78%) charge for digital access and most of those (80%) use the “metered” model which preserves ad revenue & audience, while just 4% use “hard” paywalls.
We now know that using the “metered” approach and leveraging data and A/B testing, publishers can “dip their toe in the water” and experiment with digital subscriptions with little risk.
The report states that while the meter is not a silver bullet, it can be transformative for a journalism organization. Publishers doing this successfully have converted their most engaged users into paying digital subscribers without losing advertising revenue, audience, or impact.
The metered model can convert the most engaged 5-10% of your digital audience into subscribers
Who is a likely subscriber?
The report also touches upon the characteristics of a likely subscriber. The likelihood of a casual reader making the switch to being a paid subscriber increases the most when he/she reads 5+ articles per month or subscribes to a newsletter (or has provided email). Following the brand on social media is also a very strong indicator.
What kinds of content drive conversion?
The Digital Subscription Reader Revenue report notes that the following kinds of content drive the most engagement and subsequent conversions:
Users who view local news regularly are typically 5-10X more likely to subscribe than users who view national news, wire sourced stories. Publications that produce more local (non-AP) content generate greater subscription sales, sometimes by a factor of 10.
b. Unique / Distinctive
Digital subscription models increasingly invest in unique, distinctive content that provides readers with a perspective, angle, or reporting that only that publication can provide.
c. Relevant to Daily Life
Potential subscribers subscribe to news as a service. That means, in essence, that they’re paying for access to information that helps them live better. Heavy coverage of local issues helps, and also information about new businesses, construction, and developments, and economic changes (especially relating to job availability).
d. Timely, Frequent, and Consistent
In order to build a base of engaged digital subscribers, publishers must offer readers a digital product that they want to refresh and return to on at least a daily basis. This means that they must log in and see unique, distinctive, local content relevant to their lives and produced on a daily basis.
Strategies on improving engagement, conversions and retention
Engagement, conversions and retention.
These are the 3 pillars on which a successful digital subscription strategy is built. The Lenfest Institute’s report goes in-depth on all of these, with a range of examples and case studies.
Here’s a collection of the key findings for quick reference:
To download the report Digital Subscription Reader Revenue: Benchmarks & Best Practices from 500+ Publications Worldwide, click here.