|
Getting your Trinity Audio player ready...
|
20% of micro-payers, who have made three to four micropayments, ultimately purchase yearly memberships
The end goal of the news subscription business is to increase the lifetime value of each customer and acquire more subscribers. The big question, though, is when does the journey of a paying user begin?
Publishers have explored everything to acquire more subscribers, including installing analytical tools, combining with marketing automation, integrating with propensity engines to score and segment consumers, obtaining a 360-degree view of the users, and giving customisation and discounts. However, it is insufficient to address the key question.
Additionally, there is the business of optimism. Several publishers now provide metered paywalls, allowing users to read ‘x’ number of free articles per month before being required to subscribe. The publishers hope that these people who regularly consume (even for free) would eventually buy subscriptions. However, this does not yield desirable outcomes most of the time.
Is there a silver bullet for determining which users are willing to pay for content? In our opinion, it is through micropayments, which lets users purchase a single article or even a day’s access to premium content, that publishers and media businesses allow them to sample by pricing each premium content item individually. This enables publishers to build a broader funnel of paying consumers.
Furthermore, micropayments enable media firms to monetise fleeting users, who account for 78-80% of their traffic. In the top funnel of publisher acquisition, these users are also known as ‘never subscribers’ and are currently the most difficult to acquire.
Let’s look at some numbers before we dive into micropayments and what they offer. According to the EY FICCI ME Report, digital news subscriptions in India generated barely Rs 90 crores in 2021-22. Whereas physical subscriptions to newspapers and magazines bring in more than Rs. 8 trillion every year. This represents only 1% of all news subscriptions sold digitally in the country.
What’s stopping digital subscription growth?
Conversations with over 100 publishers in India reveal that there are five areas of concern.
It is almost universal among publishers that they want to build reader revenue and start subscriptions. Despite the fact that each of these concerns is possible to address separately, there is a common solution to all of them.
The solution is micropayments.
Why should publishers include micropayments in their subscription strategy?
Disclaimer: We do not advocate micropayments as a subscription alternative. It is simply a more effective top-of-funnel acquisition method. Subscriptions would likely account for 75-80% of reader revenue, while micropayments would contribute to 75-80% of paying users.
Micropayments guarantee that the user pays a small amount for each piece of premium content consumed and enable a large number of users to sample premium content for a price. In addition to gathering first-party data from paying consumers, this also helps publishers gather complete insight into those users’ content interests and paying intent.
As now publishers have first-party user data of payers, the goal is to increase the number of transactions and convert one-time payers into repeat payers. There’s much more that can be done with this cohort. In the form of:
• Premium content newsletters
• WhatsApp news digest
• Better discounts on subscriptions
• Creating a loyalty programme system for the cohort, etc.
We have seen that 20% of micro-payers who have made three to four micropayments ultimately purchase a yearly membership from various partner platforms.
In addition, if publishers deploy a propensity engine, they may target medium propensity customers with micropayments while high propensity consumers encounter a subscription wall.
Moreover, publishers can also build a user journey from micro-payer to a subscriber. For example, they can design a modular journey that allows a visitor to read three articles for free before purchasing a subscription at a discounted price.
Micropayments as a solution to the common concerns:
Micropayments bridge the trust gap: 99% of premium content visitors who encounter a subscription barrier abandon the site. Through a simple sampling procedure, offering micropayments may help you overcome the trust barrier.
Micropayment to gather important data: Contrary to basic metered or freemium paywalls, a micropayment enables you to assess both the reader’s interest and purchase intent. These micro-payers may subsequently be targeted with improved subscription discounts.
Micropayment for improved content discovery: Once a user has paid for at least one piece of content and is no longer returning to the website or app, publishers may connect with them off-platform to promote further premium content
Micropayment to understand user’s readiness to pay for content: Once micropayment has pushed a user into the purchasing funnel, a variety of engagement and activation methods may allow publishers to provide a rewarding Day 90 to Day 360 experience for each user.
More marketing automation with more paying users: According to our experience, 3–5% of those who encounter a paywall with a micropayment option pay for the article. The revenue is currently lost entirely. With this data, the publisher can initiate a much deeper conversation with users who have indicated an intent to pay for a specific type of content, send them curated newsletters based on subject interest to bring them back to the platform, or even recommend stories that are of the reader’s interest based on consumption and paying behaviour.
Data with ConsCent also shows that if the user has micro-paid more than 5 times, they have a 20–30% chance of becoming a subscriber.
In conclusion, micropayments are not a replacement for subscriptions, but they may help publishers establish a successful subscription flywheel. As the ratio of paying users to micropayments and subscriptions for ConsCent partners is 300:1, we are confident about the future of digital content outlets. Only if they are willing to experiment with multiple monetization techniques without prejudice.
Sunny Sen
Co-Founder and CEO, ConsCent
About: ConsCent is a user lifecycle and content monetisation platform — across payments, engagement and retention — for publishers and OTTs.
