Growth opportunities for publishers
New report explores the current state of subscriptions in the space of digital publications. It shares the latest subscriber behavior data and insights on how publishers can attract new subscribers and retain existing ones.
Publishers have significant opportunities for growing digital subscriptions as they have steadily grown in popularity and are expected to generate over $11B in revenue by 2025, according to a new report. Succeeding With Subscriptions by National Research Group and Toolkits, further reveals that 73% of US consumers don’t currently subscribe to digital publications indicating ample room for growth.
“Competing with a sea of free-to-access content,” the authors write, “publishers charging for content must constantly evolve and adapt their products and their value propositions to keep up with rapidly changing consumer expectations, demands, and behaviors.”
The report explores:
- Where digital publication subscriptions stand today in the minds of consumers?
- What’s driving subscription and cancellation in this space?
- How can publishers iterate their value propositions, products, and approaches in order to establish sustainable long-term business models?
69% of subscribers hold multiple subscriptions
69% of the respondents who pay for subscriptions currently do so for more than one. 48% of subscribers hold between two and five subscriptions, and 21% report having five or more. This means a relatively small group (about 4%) of “power subscribers” accounts for a substantial share of digital publication subscriptions in the US.
“Frequent engagement remains a key indicator of healthy subscriber relationships,” the authors note. Fortunately, 92% of the respondents say they engage with at least one of the products they pay for on a weekly basis.
“Most likely to pay if the value has been demonstrated”
However, 46% of those who subscribe to at least one publication access it less than once per month. Additionally, 53% of US consumers attempt to bypass paywalls on publishers’ websites and 69% say they avoid clicking links to websites they already know use paywalls or registration walls.
Publishers are advised to focus on engaging these two groups, i.e., sleeper subscribers and paywall dodgers respectively, along with those who haven’t yet subscribed to any publication. “Publishers reliant on sleepers for a significant part of their revenue,” the authors suggest, “should explore ways to boost the value their products offer, and encourage habit and frequent product engagement to prevent subscribers from ‘sleeping’ in the first place.”
Those who are most likely to bypass paywalls are also most likely to pay for a subscription if the value has been demonstrated. Thus, publishers should aim to hook new subscribers by first giving them a taste of what makes it worth paying for.Succeeding With Subscriptions
Cost and value for money are critical for attracting first-time subscribers, according to the report. The authors recommend publishers consider designing more focused products and emphasize content personalization. Pricing flexibility or shorter subscription terms can also help attract new subscribers.
While power subscribers tend to be less concerned about price, 66% of those having between one and five subscriptions, indicate cost as the top reason for dissatisfaction. The figure comes down to 22% for those who have more than 5 subscriptions.
However, 75% percent of subscribers report being “completely” or “mostly” satisfied with the value for money they receive from the digital publications they subscribe to. Content consistency, relevancy, product delivery, and user experience are important to subscribers (including the highly engaged ones) and would help retain them.
“Find ways to boost value perception”
“As economic uncertainty intensifies and consumers look to manage their spending more closely,” the authors note, “subscribers may be thinking even more carefully about whether subscription products justify their cost.”
53% of those who subscribe to digital publications say they canceled at least one subscription during the first half of 2022. 29% plan to reduce the number of subscriptions they hold by the end of the year. Lack of use is cited as the top reason for cancellations, followed by price increases, and poor value for money.
For publishers, this highlights the importance of promoting regular engagement among their subscriber bases and illustrates why many publishers see a strong correlation between subscribers’ product usage and their propensity to churn.Succeeding With Subscriptions
Popular habit-forming products and features publishers are using to build engagement include email newsletters, podcasts, and games and puzzles. Some publishers have found that offering focused subscription products containing only features and benefits that subscribers use regularly is more effective. Additionally, unbundling existing subscriber features to position them as standalone products for more targeted segments of their audiences can drive “major returns in maintaining value perception.”
“As competition for consumers’ dollars gets more fierce,” the authors write, “many publishers may find they’ll need to add additional value to their offerings–or at least find ways to boost value perception–in order to grow and maintain their subscriber bases.”
Publishers may find that more focused offerings designed to provide deep value to specific portions of their audiences are perceived as more valuable than broader products with complicated or vague value propositions that require audiences to work harder to derive value and/or justify their purchases.Succeeding With Subscriptions
The full report can be downloaded here:
Succeeding With Subscriptions