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This is a series of articles that explores where creators and publishers are today – and where the media as we know it needs to go in the short term. The author will provide solutions and concepts for how to change the status quo at the end of the series.
Part 1: Beyond the paywall: Why now is the time to reimagine earning from digital content
Part 2: The attention economy: Why news publishers are losing
Part 3: Subscription fatigue: Why everybody loses (I)
Part 4: Subscription fatigue: Why everybody loses (II)
Part 5: Subscription Nomads: A warning
Let me ask you a question: how many of you jumped onto a new subscription because of a low-price promotion? Take a look at what I came across just in the past week:
- The Wall Street Journal and the New York Times are offering deals of $1.00 a week for the first year
- The LA Times and Chicago Tribune are both charging $1.00 for the first 6 months
- And Newsday will charge subscribers just 5¢ a week for the first 6 months
In all these cases, it feels to me like you’re getting a digital subscription for less than the price of a single print issue. By offering such massive discounts to everyone who expresses an interest, publishers are really just cannibalizing their own business model, which is a huge problem. Let me explain.
Lost Subscribers
First off, it’s a fallacy to think that most of your readers will continue to subscribe once the promotion has expired. Remember last week’s churn numbers? 33% of subscribers will unsubscribe within the first 24 hours and a total of 70% plan to reassess, actively cancel or subscribe and switch, as necessary.
Put another way, most readers who do take advantage of a promotional offer are going to be canny enough to get out before the full pricing kicks in. Which means all a publisher has done is provide these readers with a massive amount of content, virtually for free. Not good.
Lost Revenue
For the price of a single print issue the LA Times, the Chicago Tribune and Newsday, are giving new subscribers 6 months’ access to all of their content.
How is this bargain-basement pricing anything other than a revenue loss? Particularly if we can safely assume that a high proportion of these ‘subscribers’ will churn rather than start paying full price for their subscription?
Lost Value
The biggest issue with offering content at bargain-basement prices of 5¢/week — or even 50¢/week — is that publishers are creating the impression that their product is only worth 5¢ or 50¢. This is continuing publishing’s mistake from the 15 years pre-subscription era — giving away their content for free — but now it’s essentially free content disguised as a subscription.
So, by taking this approach, aren’t publishers telling the world that they know the product is so bad and unimportant that they effectively need to trick audiences into a cheap subscription model and hope they forget to cancel when the price goes up?
Lost Trust
Any relationship with a customer that’s based not on value and trust but on mistrust is flawed. If readers believe that the publisher is trying to trick them into an expensive subscription by means of a bargain-basement offer, their instinct will be to go in one of two directions: either get as much content as possible for free then cancel, or assume that the content is of low quality, and is not worth pursuing.
Can you imagine if Starbucks said that, for 50¢ a month, they’d give you a coffee any time you wanted one? What would that say, either about their business model or the quality of their coffee? Ultimately the core business of news has to be based on trust and that’s what’s suffering here.
Just this week the FTC announced new proposals that could require businesses and sellers (including publishers) to make it as easy for consumers to cancel their subscription as it was to sign up. If even the FTC steps in to ‘save’ people from difficult-to-cancel enrollments, what does this tell you about trust in subscriptions?
I should obviously state that this is just my hypothesis about the market as a whole – and it comes from the perspective of a consumer, not a publisher. It’s entirely possible that this approach has worked in the past or for some specific publications.
But the fact remains that there is no catch-all solution. What works for a loyal customer does not work for a casual reader — and vice versa. By devaluing the content and offering heavily discounted subscriptions, publishers are not just wasting a huge opportunity, they’re cannibalizing their own revenue.
Let’s talk next about what happens when readers can’t access the information they want to.
Part 7: Publishers: How we can go beyond existing revenue models
This is a series of articles that explores where creators and publishers are today — and where the media as we know it needs to go in the short term. I’ll provide solutions and concepts for how to change the status quo at the end of the series.
Cosmin Ene
Founder/CEO, Supertab
Cosmin Ene has a wide spectrum of experience in monetization for content providers. For the last 8+ years he has worked with a broad swathe of publishers – from bloggers to local media to national and international publications – including the San Francisco Chronicle, Salon, The Boston Globe, and Der Spiegel. Cosmin also has profound experience generating revenues from contributions for content creators and artists, having worked together with industry luminaries like Nick Knight. Recognizing that people’s digital content consumption habits have fundamentally transformed traditional business models, he advises publishers and content providers on how best to embrace user-centricity in order to remain profitable and to succeed in the 21st century.
