SIIA member Piano came up in the SIPA Discussion Forum today. Coincidentally, their director of research, Patrick Appel, just put out some interesting information on subscriptions and renewals at a Readers First Meetup sponsored by the International News Media Association.
Monthly subscriptions have become more popular in the industry of late. And last year saw the increased popularity of billing every four weeks instead of monthly (20% of news publishers are doing this now vs. 3% in 2018).
Appel noted that “longer-term subscriptions tend to be higher value just because there’s such high churn at the beginning of monthly, short-term subscription.” But he added that publishers shouldn’t ignore monthly subscribers entirely: “There is a conversion rate, certainly, by offering monthly as an option … but after a subscription has been around for a year, you’re seeing a majority of annual.”
Here are more notes on subscriptions from Appel and others:
Focus on onboarding. For monthly subscriptions, Appel said that “really you’re talking about the first three months, the first six months, as this risk period. Either [the subscriber] bought it with the intent to churn—we’ve seen that before—or it hasn’t been effectively communicated about the value. Or maybe they bought it and were thinking about it and that first month, they didn’t see the value.” So when looking at monthly subscriptions, Appel said the focus is really on that onboarding campaign.
Think about the balance between short- and long-term commitments, as well as the pricing strategy between those two. “It’s really critical,” Appel said. “When we think about optimizing ultimately for revenue, we want to think both about what is the increase on acquisition, and what is the hit on retention.”
Look to other models besides metered paywalls. “I predict a shift in how U.S. publishers implement their paywalls, with many beginning to operate a freemium-style model (already common in Europe) and others beginning to experiment with dynamic models that ask different readers to pay at different points in their journey,” said Josh Schwartz, CTO of Chartbeat, on NiemanLab. “…While meters assume that each story’s contribution toward a user’s eventual subscription is in some sense the same, freemium and dynamic models let us think about how each story can best contribute to the business—bringing in new readers, driving engagement, driving subscriptions, or deepening engagement among subscribers.
For a price increase, do testing and look at data. “The best thing a publisher can do when they are thinking about raising prices is to start moving away from a gut feeling approach, where you ‘think’ you should move prices, and at least start with some data and see what that tells you,” said Dustin Tetley from a consulting group called Mather. “And test as much as possible before moving forward or throughout the price increase process. We find there’s really a lot you can learn from each price increase.”
And increase engagement. Customers who are more engaged tend to accept price increases more readily than those that are not engaged, Tetley reported. Engagement also has a big effect on overall stop rate and retention. “When you see a group that had no digital usage in the month prior to the price increase, they stopped at a much higher rate than customers that were highly engaged,” Tetley said. He added that new customers won’t like price increases so build loyalty and tenure.
Learn to tell the story of your company: who you are, what your product is, and why it is so important right now, wrote Eduardo Suarez in a new Reuters study. This appeal should be crafted carefully. It must take into account the mission of your organization as well as its ownership and its history. “Few news brands have done this more systematically than the Guardian. The messages at the bottom of its articles are long, conversational, and customized by topic and geography. They are designed to answer frequent questions from their readers before asking them to contribute.”