The media industry has historically driven its bottom line with advertising revenue but there is a significant shift underway from ad-revenue to consumer-revenue models. For content publishers, it’s abundantly clear that there is one clear path forward to future-proofing in a disrupted industry, and that’s focusing on developing a targeted subscription strategy. Consumers are becoming the primary revenue source for news media globally. The market for digital subscriptions is expected to double in size by 2025, up to $1.5T. Publishers are looking to diversify their bottom line, and capture revenue through reader pay – a much more reliable source than advertising. Consumer revenue accounts for more than half of total revenue for many of the biggest players on the global stage. The New York Times’ digital subscription business for example, accounts for approximately 67% of its revenue as of the third quarter of 2021, and for Canada’s National newspaper, The Globe and Mail, subscription revenue accounts for 70%.
The subscription game is not for the faint of heart. It is a fiercely competitive landscape given that readers have countless news sources to scroll through, some of which have new, enticing product extensions popping up to appeal to the next generation of readers (or retain existing ones), and ongoing pricing battles to win over a very precious audience pool. While the subscription economy is accelerating, there is still plenty of room to grow.
But what strategies make the most sense for publishers new to the subscription game? And what about publishers who have launched a subscription business, but aren’t reaping the reader pay rewards in the ways they may have hoped to?
There are three simple stages to getting lift-off and taking your subscription strategy to new heights.
1. You have quality journalism, it’s time to monetize it.
You’ve decided as a publisher that it’s time to refocus your subscription strategy. For some, this is a new priority that requires a complete overhaul of your revenue model. For others, you may have already implemented a paywall, however you’ve reached a ceiling and subscription growth has plateaued. Sound familiar? It’s a fine balance finding the right mix that will drive subscription conversion without having a negative impact on your advertising bottom line – and let’s be clear, advertising is far from dead. Whether you’re new to the subscription game or a veteran looking to drive results, a dynamic paywall is the Rolls Royce of the subscription fleet – it knows when to ask a reader to pay for a subscription, when to ask them to register, and when to leave them alone, so those who are unlikely to ever subscribe can continue freely consuming your content and contributing to your advertising targets. Using technology similar to what you might find in a video game, the right dynamic paywall knows how to get each reader to their highest value state, using predictive modelling and machine learning. The dynamic paywall has helped publishers like The Globe and Mail not only increase subscription conversion by 51%, but also increase registrations by 222%. That’s a significant new audience pool to engage with, and ultimately draw down the funnel.
2. When you have a captive audience, get to know them, and keep them.
If we have learned anything in the digital era, it’s that being nimble, and adapting to customer needs is top priority, not to mention, will give you a competitive edge. While news media continues to compete on product, the key differentiator is who best understands their customer. Having behavioural data helps organizations understand how their customers interact across their site. The result? They can drive better user engagement and personalize the experience in real time to drive acquisition and/or retention goals. Some companies like Reuters are using site automation not only to give the stories with the greatest value more promotion on site, but they are also often the stories that readers both want and need to know. This is a great tactic not only to engage their audience more deeply by surfacing the highest value articles, but editors in turn have more time to find the next big story.
Segmenting your content and personalizing user experience (where possible) will engage new, and retain existing, readers. Recency, frequency, and volume (RFV) is often used to predict a subscribers’ propensity to churn. The more they visit, the more they read, and the shorter the time between visits to your site is a great determinant of whether they are likely to remain a customer – or not. Delivering valuable, relevant, and timely content will accelerate those results in your favour, keeping subscribers (and registered users) engaged in the content that is most relevant to them.
These are great metrics to help retain customers, but how do you create a customer journey that encourages those anonymous users to register (or even better, subscribe)? There has to be a certain level of give and take and one-to-one interaction to get a prospective customer to give you something in return for access to more content or reader benefits – ideally a credit card number, but an email address can be a great starting point! Commenting, for example, has become a popular method to get readers into the funnel, where they can engage with a community of like-minded individuals, while in parallel, your organization can start to learn more about their interests and reading habits. Capturing first party data has become a top priority for publishers looking ahead to 2023, when they will no longer be able to rely on third party cookies. Some technologies can predict when to ask a reader for personal information, based on their propensity to respond.
3. Grow big or go home.
The final stage in subscription growth is adding scale to your business, and making a meaningful impact to your bottom line. As an example, when The Globe and Mail first began its journey 10 years ago, reader revenue accounted for 30% of total revenue, while 70% was advertising revenue. Investing in Sophi for Paywalls technology allowed The Globe to accelerate its reader pay strategy, now accounting for 70% of its bottom line. That’s not to say that tech solutions are the only path forward to drive scale, but having smart innovation to help your company evolve faster and more efficiently should certainly be an important piece of your growth strategy.
As the media industry continues to innovate and face disruption in the digital era, the organizations that rise to the top will be the ones who find ways to be agile and prioritize strategies to grow revenue through subscriptions using cutting edge technology.