As the industry increasingly incorporates subscriptions into diversified revenue strategies, media companies need to take a fresh look at their subscription cancellation processes. Not only do customers expect streamlined cancellation processes, smart companies conceive of cancellation as a critical aspect of an effective retention strategy. And all companies must be aware of changing regulations around facilitating the cancellation process.
Using these experiences, Skrob outlines which companies are making it simple to cancel, which ones are making it difficult, and which ones offer lessons worth learning. With specific examples of what they’re doing right and what they could do better, Skrob offers an insightful look into the experience of subscribers as they try to cancel, which will help media companies design processes that leave audiences with a positive impression or – even better – convince them not to leave.
Building a retention-based cancellation process
Through his work, Skrob has found that many media companies have not developed the kind of cancellation process that is designed for retention. He finds that cancellations are an often-neglected aspect of the media business, relegated to accounting or administration. He suggests moving this function to the marketing department as an aspect of subscriber-retention.
Many media companies have created complex or opaque cancellation processes designed to dissuade unsubscribes. The effectiveness of this approach is the subject of some debate. However, the FTC has proposed the “click to cancel” rule, which would require companies to allow consumers to cancel their subscriptions in the same way, and just as easily, as they subscribed in the first place. So, whether companies like it or not, it’s time to develop easy cancellation processes that may actually improve retention.
While many types of subscription-based businesses have pushed back on this requirement, Skrob believes that there are tactics that can be incorporated to reduce the likelihood of churn. For one, companies can do a better job of communicating the benefits and value of subscription to audiences. For example, The Financial Times includes a “before you go” message which outlines exactly what subscribers lose when they cancel. The Telegraph cancellation process also includes a page that demonstrates the value of the exclusive subscriber benefits and explains what the subscriber will lose after cancellation.
Giving would-be cancellers an offer to stay increases retention, according to Skrob. He finds that upsells work better than downsells in terms of recurring revenue. He also suggests that, if you don’t have an upsell, that you consider offering a lower-priced subscription tier to retain customers.
If a customer does in fact cancel, it is important to send them a confirmation of cancellation so that they know that they’ve completed this step successfully. However, even this confirmation should be viewed as an opportunity to reengage. This, as well as communicating transparently their remaining subscription benefits and duration of subscription until cancellation is finalized, works towards building trust. And that trust will pay off as you work to regain them as a subscriber.
Case studies and a case for improved cancellation strategies
Based upon his research, and case studies examining the best (and some not so great) practices from the media companies’ processes he investigated for the report, Skrob makes a solid case for investing marketing time and energy into your subscription cancellation processes. Yes, this can positively impact subscription retention and revenue growth.
However, the report also builds out the connection between these processes and improving audience trust – something the media industry has struggled with for some time. As Skrob explains, creating cancellation processes with skill and integrity can grow trust for your brand. Cancellation management is a critical piece of subscription growth which in turn will enable your media company to invest more in the products you deliver, and help grow a sustainable media industry.
2023 was yet another rocky year for publishers. From the ad market slowdown to economic pressures affecting everything from hiring to subscriptions, there was plenty to write about for Media Voices’ annual report, Media Moments 2023.
AI was, of course, the headline trend. It has the potential to impact almost every aspect of the media business, and many commentators have speculated on how it can and will shape the coming years. There’s not a media executive out there who isn’t actively watching AI, if not experimenting with it. But AI isn’t the only trend influencing day-to-day publishing operations. Here are four more surprising things some of the industry’s most successful media brands are doing, all of which are covered in more detail in the Media Moments report.
Consolidating newsletters
Wait, aren’t newsletters the current big thing? Aren’t we supposed to be launching lots to make up for the impending death of social media and search traffic? Not necessarily, as some publishers have demonstrated. As with so many things, it turns out that less may deliver more.
The New Statesman is one such publisher. They consolidated their portfolio of economics, culture, politics and world news newsletters into just two: a daily and a weekend edition. “Instead of having a whole buffet of different newsletters and cutting the brilliance up into little segments, we just decided to give [the audience] one that we thought they’d like on Saturday and have the power of a big audience through one newsletter,” head of newsletters Harry Lambert told Press Gazette.
News publisher The Telegraph has a whopping 34 newsletters. However, head of newsletters Marie Bonheim told Peter Houston that their portfolio is under constant review. Despite the urge to “fill every niche” there is a danger of spreading your newsletter efforts too thin. “You also don’t want to double up on the same content,” she explained. “We merged a few fashion and beauty newsletters into a single, daily lifestyle newsletter.”
Undoubtedly, streamlining does more than reduce the amount of products that need to be produced, it may also serve to improve reader numbers for the remaining products, which can in turn drive revenue.
(Re)launching print magazines
Mass market magazines have continued to battle decline, with just two news and current affairs magazines in the UK posting circulation growth; satirical fortnightly Private Eye and political monthly Prospect. But for more niche titles, publishers are seeing an opportunity in low volume, high value print runs.
We saw multiple stories of print revivals and launches in 2023, from fashion title Elle Australia and music magazine NME. A piece in the Sydney Morning Herald showed that readership of popular titles like Vogue Australia and Marie Claire had increased between 2022 and 2023. Jane Huxley from Are Media, which publishes Elle, said that there were two main factors behind the renewed interest in print; the enduring brand strength of these magazines in tough economic times, and a consumer reaction to the “digital deluge.”
Advertiser interest in print appears to be on the rise too. Recent research suggests a strong preference for print advertising among consumers, with readers far more likely to pay attention and trust it in contrast to online advertising.
But the approach of newly launched or relaunched magazines will be different. Copies are more expensive and printed less frequently. The new NME will be £10 every other month, and not available on newsstands. “Rather than print thousands upon thousands of copies and try to shift them at the newsstand in bulk, we’ve changed that model up and have taken inspiration from industries like fashion, where you see the value in scarcity,” Holly Bishop, of NME Networks told New Statesman.
Print isn’t going to be right for every media company. But it can be effective as a higher-priced premium product; something special to deepen relationships with super fans.
Paywalling podcasts
As the frenzy for podcast launches finally dies down, publishers are looking long and hard at the most effective ways of monetizing them. For The Economist, that involved taking the bold decision to put a paywall in front of its entire portfolio bar one (the daily flagship podcast The Intelligence will remain free). The rest of their 18+ shows will be available as part of a full Economist subscription, or as a standalone Economist Podcasts+ offering for $4.90 a month.
Claire Overstall, SVP, Global Head of Customer at The Economist told DCN in October that they had moved the podcasts to a paid offering in keeping with their belief that subscriptions should be the way they fund their journalism.
“Paying for journalism was one of the things that we led with very early; The Economist has been doing that a lot longer than many of our peers,” she said, acknowledging that although paid podcasts aren’t commonplace, the reasoning is understood. “So that’s well-embedded in people’s minds, the way that we’ve articulated how this is supporting our journalism.”
It’s a risky move for a publisher with millions of listens across its podcast portfolio. But as tools to make the subscription process for podcasts smoother and more aligned with publisher sites improve, it’s likely we’ll see more premium brands give paywalled podcasts a shot.
Paying for podcasts may take listeners time to get used to, so companies trying this shouldn’t expect instant results. But paying for good content is increasingly normalized and (grudgingly) understood by audiences. So, it’s worth thinking about how paid podcasts could fit into a long term strategy.
ARPU over subscriber numbers
It’s hard to point to a subscription service which hasn’t raised its prices over the past 12 months. Even Spotify, which had kept its pricing the same since 2011, increased the monthly cost by $1-$2 across its tiers. In the publishing world, the price of a digital news subscription has actually increased an average of 19% in the UK.
There are multiple intertwined reasons for this trend. News fatigue and economic pressures are contributing to a subscription slowdown. In addition, after a rush to subscriptions during the pandemic, many publishers are hitting a natural plateau anyway. Inevitably, attention is now turning to retention and reducing churn.
“Subscriptions are a forever business,” wrote The Rebooting’s Brian Morrissey. “Everything in publishing takes longer than you would think. And building a subscriptions business is the ultramarathon. After early wins, subscriptions become a grind, with optimization tactics coming to the forefront.”
The Atlantic’s CEO Nicholas Thompson noted back in 2022 that he was less interested in getting a million subscriptions than he was getting to $50 million in reader revenue. “You can get to a million subs pretty easily – you can massively discount,” he said. “If you set a goal solely on subscribers, it can move you in some harmful ways.”
Defector was a good example of this more sustainable focus this year. In their third annual report, they listed a subscription revenue increase in 2023 of just 4%, when compared with 20% a year earlier. But they also managed a 90% retention rate when half of their subscribers came up for renewal.
It’s tempting to get sucked into the race for big numbers, many of which are achieved through hefty discounting. A longer-term, more sustainable view is definitely focused on metrics like retention and engagement, and making sure subscribers are satisfied with what they’re paying for.
Going forward
This isn’t to suggest that you should be immediately scrambling to reduce the number of newsletters sent, or to start flatplanning a magazine! As we found from the Media Moments 2023 report, many of the biggest challenges and opportunities publishers have faced this year have been iterations of what we’ve seen in previous years.
These trends point towards something AI cannot replicate: creating valuable content that (human) readers will be willing to pay for. Whether that be in cycling, cooking, fitness, politics or B2B, doubling down on quality and looking at ways to increase the value of what you’re producing is a winning strategy for 2024 and beyond.
The news industry has (finally) woken up to the idea that paying for journalism is a longstanding and effective strategy that must transition from print to digital. Over the past several years, there has been a push to establish reader revenue models which promise the annuity revenue and stability that digital advertising cannot.
While paid-for content is absolutely correct as a concept, the execution is far more difficult. One of the reasons for this is a real fear of trying to tackle and change editorial workflows, cadence and practices to service a digital, willing-to-pay audience.
The universal truth in news organizations globally is the “separation of church and state.” There is no doubt that editorial integrity should be protected at all costs. But in this modern world the notion that newsrooms should have little or no role in commercial endeavors – including subscription growth – is becoming increasingly obsolete, if not completely counterproductive to sustainability and growth.
As newsrooms become more representative, younger and dynamic and we pay more attention to audience diversity, there is no place for static thinking about our place in the world.
The FT’s subscription engine room
The Financial Times most definitely experienced more change in the past 20 years compared to the preceding 125 years. The advent of the internet, the iPhone, and high-speed connections completely disrupted our distribution channels and our users’ reading experiences. These digital forces also radically shifted the course of the fundamental business model of newspapers – ours included.
Across the industry, print has been in long-term decline for more than 20 years now, and advertising growth has been elusive for almost as long. Very little of our past business remains intact.
At the FT, we’ve benefited from visionary leadership that bit the bullet many years ago. We worked extremely hard (and still do) to build and grow a successful digital business in both reader revenue and carefully considered advertising strategy that has seen digital ad revenues double in the past three years. And it must be said that the development and implementation of this strategy very much included our editorial leadership and cross-departmental input.
Some of the most exciting digital product innovations that have engaged readers of the FT in updated ways are collaborative efforts that include or are driven by editorial. example this “Draw your Own Chart” from the Visual storytelling team and this fantastic visual explainer on AI offer subscribers more creatively engaging ways of getting the information they need. And the launch of FT Edit increased reader revenue by providing an option for audiences that might not otherwise be willing to pay for a full subscription.
Indeed there are vastly different conditions in this new era. So, keeping the engine room of news companies entirely isolated from commercial reality is simply not good for business. At the FT, revenue ideas may come from editorial, as in the case of FT edit, or be driven by commercial EXAMPLE.
As much as we lament the decline of print and advertising and blame the rise of social media and platforms for our woes, much of the news industry is suffering from:
A built-in “church and state” stress fracture in our businesses and the industry as a whole
Siloed thinking and an inability to collaborate effectively or to think outside the box
An unwillingness and genuine fear to try new things and experiment
Suspicion of commercial colleagues – a damaging “us and them” mentality
Product, engineering and technology teams falling on the commercial side of the fence and an often unhealthy tension between product and editorial
At the Financial Times, we have found that a closer relationship between commercial, editorial and technology can only result in revenue growth in the long term. It is also vital to carefully pick the people who can make this happen. They are the glue that holds an organization together.
There was a session at The Audiencers event in London about bridge roles and how important they are in newsrooms. Panel participant and consultant Dmitry Shishkin has made very good observations about how wonderful things happen when product and content come together.
Reader revenue models help newsrooms transform digitally
The establishment of reader revenue models (subscription or membership) at so many news organizations is positive not only for revenue generation but also for the toughest challenge of organizational and cultural change.
A paywall has a galvanizing effect on journalists who don’t want to see their hard work going on a website for free. For newsroom leaders, it helps with adjusted workflows and better copy flow to publish valuable journalism with a clear value proposition for readers.
Reader revenue strategies are entirely in lockstep with quality journalism, and not with the high-volume game of clickbait and churnalism. More importantly, for a paid model to be truly successful it will be enormously strengthened by the input and commitment of all: and this means editorial too.
On the other extreme, organizations that have not integrated their digital and print operations can suffer from related labor issues. “Print staff” may even actively campaign against transformation initiatives. This might take the form of refusing to do any digital publishing, not attending digital training, treating digitally skilled staffers as inferior, the list goes on. And this puts organizations in a tough spot.
The answer at this point is very simple: strong leadership. In a recent study, created in collaboration with the Google News Initiative, we found that leadership is a pivotal factor for sustainability and the growth and success of news organizations.
It is this trust and leadership from editors that will ultimately make the difference in the long-term fortunes of news organizations. A successful integration of print and digital, and bridging the creative side of the organization with the commercial, comes down to a clear, unified vision for success.
Print is and will remain a premium product with a definitive market niche. But to ignore the commercial realities – and digital opportunities – of our industry is to be no better than the band leader on the Titanic. Success lies in a common goal and purpose and having all staff in the same lifeboat and pulling in the same direction is the only way to leverage growth and guarantee sustainability.
About the Author
Lisa has over 25 years of experience in print-to-digital transformation, most notably at the Financial Times where she led newsroom operations, was an Assistant Editor and Managing Editor, Associate Editor and Head of Operations for FT.com. She led group-wide digital transformation projects at both of South Africa’s biggest publishers, Tiso Blackstar (now Arena Holdings) and Naspers’s 24.com.
The media industry continued its remarkable transformation in 2023, with shifts in audience behavior and the emergence of AI as a potential threat to newsrooms. As we head into an uncertain 2024, we spoke with four content industry leaders to understand the strategies that are helping media companies and content creators successfully navigate these challenges.
1. Focus on the lifetime value of your audience
During the COVID pandemic, media companies focused on acquiring subscribers. And then in the immediate aftermath, they focused on retaining those subscribers. Now their focus must shift to lifetime value, which doesn’t start when someone subscribes, but from the moment they arrive on your site—even if they’re not yet ready to subscribe. This means providing the right content at the right time with the right paywall, pricing and messaging.
“FT has gone through that journey of being acquisition-focused to then engagement-focused, retention focused and now lifetime-value focused,” said Daisy Donald, Principal Consultant and Head of Americas at FT Strategies. “There are interesting opportunities that FT has started experimenting with to create different levels of subscription products. What do you get as a registered user that’s free?” For example, one of these new subscription products is FT Edit, which is app-based and has a specific persona in mind of someone who has news fatigue and wants to pay a smaller amount of money to still get quality content.
2. Dive deep into audience segmentation
Maximizing lifetime value is difficult without understanding your audience at a more granular level. “It’s all about actually putting your audience first and thinking about their needs from day one. What are their interests as individuals rather than as a whole audience? And how can you really serve those needs?” said Madeleine White, Head of International at Poool and Editor-in-Chief at the Audiencers.
White recommends that audience teams invest in user needs analysis, with every piece of content that is created focused on meeting a specific user need and furthering a related revenue strategy. For example, one user need might be valuable for converting users into subscribers, while another is valuable for advertising revenue.
Adley Bowden, Head of Individual Investor & Editor-in-Chief at Morningstar Wealth concurs on the importance of understanding audience members as individuals: “Yes, there is an audience. But within it there are unique individuals. They segment in different ways and you can see which content drives engagement from these different profiles. We’ve done a lot of work to better understand these groupings within our audience and then better design content.”
3. Elevate human expertise in the age of AI
No discussion of content industry challenges in 2024 would be complete without addressing the elephant in the room: AI. Instead of fearing AI, media companies should recognize the important role that human expertise plays in making an AI-enhanced content strategy successful.
“I’ve seen a lot of publishers who are starting to use AI-personalized homepages based on what you’ve read previously,” said Poool’s White. “And every single one that is doing it has a maximum of maybe 70 percent of their homepage that’s personalized through AI. The rest is still in the control of their editorial team to really push the stories that matter because a machine can’t know what’s going on in the local community right now, what everyone’s talking about in offline conversations.”
Morningstar’s Bowden said that the company has found value in using AI for content translation, which leans into the strength of large language models. But maintaining the trust and authority of Morningstar’s content is critical, so “we can’t just do Google Translate, and off we go.” Instead, the company’s AI-assisted translation process includes humans in the process to perform some manual translation and ensure the quality of everything that’s published.
4. Remember that quality content is at the core of everything
New trends, tools and technologies shouldn’t obscure the fact that quality content that engages audiences is at the core of a successful media company. “I was speaking to a client of ours in Denmark, and one of the worries that they’ve been having is that they are overinvesting in their ability to perform well on SEO. So, they’re worried that their articles are written in a way that is not journalistically valuable,” said Birger Soiland, VP of Sales at Norkon. “When your focus is too much on serving up content on SEO, then you might fall into a trap of your content not being engaging enough.”
The definition of high-quality, engaging content will vary based on audience needs. Norkon’s Soiland has seen many of the company’s publishing clients successfully emphasize short-form content that is easily consumable, whether text, audio or video. For Morningstar, Bowden says that emphasizing data content gives its audience something more than just written or video content to come back to and re-engage with.
FT Strategies’ Donald aptly summed up media companies’ ability to navigate the challenges of 2024 and beyond by saying, “The media industry is the most resilient industry in the whole world. That’s why we love working in it… we are just so resilient. We adapt so well. I believe we will continue to adapt and survive.”
As 2023 draws to a close, it’s a good time to reflect on the pivotal consumer and market trends that have shaped the digital publishing world for our content and publisher partners. This year has been a testament to the industry’s resilience and innovation, especially in the realm of revenue optimization. From adapting to a world without third-party cookies to the rise of Connected TV (CTV), these trends have not just influenced our present – they pave the way for the future. For digital media executives, understanding these shifts is crucial to staying ahead in an ever-evolving landscape. To help navigate this dynamic environment, we’ve compiled a list of the seven key trends that shaped the media world in 2023:
1. Emphasis on brand safety
Brand safety has taken center stage, aligning with the need for quality journalism and trustworthy content. Maintaining high editorial standards will be essential in 2024 to ensure a safe and credible platform for both users and advertisers. In line with this issue, about 40% of marketers expect an increase in brand safety concerns, highlighting the crucial role of publishers in fostering a safe and transparent advertising environment.
The growth of subscription models has highlighted the importance of balancing revenue generation with user experience. In the coming year, the focus should be on providing valuable content while ensuring a seamless and engaging user experience. As an example, one publisher, with more than 9.3 million subscribers, successfully embraced subscriber audiences to power ad revenue in 2023 demonstrating the substantial reach and impact of subscription models on advertising revenue.
4. Preparing for a Cookie-less world
The demise of third-party cookies has reshaped the digital advertising landscape, compelling publishers to embrace first-party data and contextual advertising strategies. However, progress remains slow, with over half (53%) of digital marketing campaigns still relying on third-party data. As we approach 2024, it’s vital to have your cookie-less strategy ready, to ensure a smooth transition and continued advertising effectiveness. Without a cookie-less strategy, publishers risk significant disruption in their ad targeting and personalization capabilities, which could lead to a decrease in advertising effectiveness and revenue.
5. Navigating algorithm changes and maintaining publisher revenue
In 2023, publishers faced significant challenges due to algorithm changes by big tech platforms leading to reduced inventory and revenue, while declining CPM rates further strained publisher profitability. To combat this, publishers should focus on producing high-quality content that their audiences value to regain control of data and revenue streams. This is particularly crucial in light of the recent revelation that social platforms in the US owe news publishers between US$11 billion and US$14 billion per year, highlighting the need for fairer revenue-sharing models.
6. Innovative video and interactive content
2023 saw a surge in demand for innovative, engaging, and non-intrusive video and interactive content. In 2024, working with partners who can deliver such content effectively will be paramount to enhancing the user experience. Interactive content sees 52.6% higher engagement than static content, making it an essential tool for capturing and retaining audience attention. Additionally, interactive content can be used to collect valuable data about audience behavior, which can then be used to inform future content strategies without relying on cookies.
7. Monetizing CTV inventory
As CTV’s exponential growth, driven by a staggering 19.6% ad spend increase in 2023 alone, opens new monetization avenues, finding the right balance in monetization and selecting the appropriate supply partner becomes key. By choosing the right CTV supply partners, brands can effectively target their desired audience and deliver high-quality, relevant ads that connect with viewers, resulting in enhanced brand awareness and engagement.
Looking back and moving forward
As we look back on 2023, the lessons we’ve learned are invaluable. The digital publishing landscape is ever-changing, and staying abreast of these trends is crucial for any media executive. By embracing these developments, preparing for what’s next, and collaborating with the right partners, you can tackle the challenges of the digital landscape in 2024 and beyond.
There are countless reasons why consumers cancel their media subscriptions.
It could be as simple as a subscriber deciding their affiliation with a publication has run its course after a change in the tone of the journalism. It might reflect financial circumstances. Or it could simply be too many things to read or watch and too little time. The National Research Group found that 23% of people who cancel subscriptions say they do so because they weren’t using them enough, which in many cases is not a failing on the media company’s part.
The Reuters Institute for the Study of Journalism also found that a proportion of subscribers do not want to feel “tied down” to any one news source. Other media companies – always in competition – might make active efforts to lure subscribers away through aggressive and antagonistic advertising campaigns.
However, there are macroeconomic factors that publishers cannot control that lead people to cancel subscriptions. In the face of challenging financial times, it won’t surprise any newspaper or magazine publisher that “poor value for money” is cited as among the most common reasons for cancellation. That’s a difficult barrier to overcome – although it is one some publications try to address by reminding consumers of the value of their subscriptions through newsletters and content recommendations.
Media companies may have to grapple with more churn in the near future. While suggesting that consumers have not reached “peak subscription,” research from Toolkits has found that a large percentage of people who have taken up news subscriptions expect to cancel some in 2024, for a variety of reasons including those mentioned above.
These factors are likely to be impacted by new legislation coming into force in the UK and EU (as well as proposed legislation in the US), which aims to streamline the process by which consumers can cancel subscriptions. For media companies – many of which argue they are not responsible for the trends that have made such legislature necessary – that presents two main challenges. The first is that they would have to bear the cost of enabling cancellation through new channels, which UK broadcaster Sky says will add significant costs to its businesses. The second is that, at a time when the rush to find sustainable subscription revenue is hotting up, it could increase the levels of churn.
For example, Sky argues the government’s proposals to tackle the problem of customers being billed for unwanted subscriptions were “too prescriptive.” This call is echoed by many media companies, which in some cases still require consumers to call to cancel a subscription.
But there is a growing body of evidence that such pain will be short-term, and that it is in media company’s favor to enable one-click-cancellation.
Proof of value
Research from McKinsey finds that of the 40% of consumers who choose to cancel subscriptions the majority that do tend to cancel do so early in their subscriptions. Those early terminations have a deleterious impact on the data that can be gathered on the consumer, making attempts to prevent cancellation more difficult.
However, it is also the case that the relationship doesn’t end as a result of cancellations. Some media companies, including Guardian News & Media, use a cancellation as a cause for further contact. Its subscriptions and sales teams will often reach out to a subscriber who has cancelled a direct debit or regular payment to find out why.
It is a technique used by other subscription-based businesses, which make distinctions between lapsed and unengaged consumers. While the latter require much more work to bring into an ecosystem, the former already have an emotional connection with the brand. Most importantly for digital subscriptions, many will continue to share their data with a brand following cancellation, making efforts to re-engage and remonetize them quicker and easier.
Given that the maxim that new consumers are five times as costly to acquire as existing subscribers are to re-up, that creates a huge incentive for media companies to continue their marketing efforts towards lapsed subscribers. Doing so mitigates the risk highlighted by McKinsey that lapsed subscribers do not continue to provide data for use in honing subscription strategies.
Cost of cancellation
In the US, the risk of more churn and less certainty around subscription revenue has been exacerbated by what the Federal Trade Commission considers effectively duplicitous activity from subscription-based companies. FTC Chair Lina M. Khan said: “Some businesses too often trick consumers into paying for subscriptions they no longer want or didn’t sign up for in the first place.”
Just as in the UK, media companies in the US feel that their businesses are going to be unduly impacted by the bad behavior of other actors in the subscription space. As a result, they are largely opposed to the implementation of “ease of cancel” rules that could lead to consumers cancelling more easily.
However, there are early signs that such efforts would not impact media companies quite as badly as might have been expected. Toolkits conducted a study of over 1,000 consumers in the US who have subscribed to digital publications. It found – in the face of expectations – that over two thirds (67%) would “more readily purchase new subscriptions if they thought those subscriptions could be cancelled easily”. Over three-quarters (77%) percent of consumers also said they would support the proposed laws requiring “one-click cancelation” mechanisms.
Zamir Walimohamed is head of digital, marketing and subscriptions at Motor Sport Magazine. He acknowledges that as a legacy brand the magazine has an advantage in converting paid print subscribers to digital: however he also notes that even niche titles face challenges around churn and re-upping subscribers.
Despite those challenges he argues that easy cancellations are not necessarily the end to the relationship between media companies and consumers. Instead, he says, it is an opportunity to better understand readers and what makes them subscribe in the first place: “If a customer is on a bundle and cancel a pop up appears saying ‘Are you sure you want to do this? Or would you also be interested in a lower offer’, which is only digital only, for example.”
He states that it is on media companies to demonstrate an understanding of why consumers would want to cancel in the first place. Moreover, he argues that the relationship is better served by making that process as easy as possible.
However, as he and other subscription managers note, the data collected throughout the active lifecycle does not lose its value the moment a subscriber cancels. Instead, the data points about why a consumer has cancelled are valuable not just enticing them into the fold, but for preventing other readers choosing to cancel as well.
The subscription-based model is is one of the foundational models of the digital media marketplace. It offers predictive and reoccurring revenue, reduces reliance on advertising, and provides a deeper customer relationship. The subscription business also comes with challenges ― conversion, churn, and subscription fatigue. Understanding consumers is essential for subscription-based businesses to optimize customer acquisition, improve customer retention, and stay competitive in the market.
New research, No sign of peak subscriptions conducted by Toolkits and the National Research Group, offers insight into consumer attitudes to publishers’ digital subscription products. The research findings indicate that 29% of subscribers report an increase in their subscriptions over the past year. In contrast, only 7% reported a decrease in their subscriptions during the same period, suggesting a lack of subscription saturation.
The rise of the “power subscribers“
Toolkit’s 2022 research revealed that a relatively compact yet deeply involved segment of “power subscribers” accounted for an outsized portion of subscriptions in the U.S. This group comprises approximately 4% of the population and does not show signs of subscription saturation. Further, this year’s data suggests that consumer’s appetite for additional subscriptions remains strong.
In fact, one-third of current subscribers (33%) anticipate increasing their subscriptions in the future, compared to 27% last year. Conversely, only 21% of subscribers plan to reduce their subscriptions compared to 29% in 2022. The availability of more subscription products and subscriber-only content likely contributes to this trend.
Subscription revenue and audience dynamics
While power subscribers continue to drive demand, reliance on a relatively small audience is not a strong business plan. If power subscribers reduce their subscriptions significantly or fail to add new ones, it would pose a strong risk to the subscription revenue stream.
The research highlights that attracting and converting first-time subscribers is essential to sustain growth in the digital media subscription market. Publishers must focus on reaching new audiences and investing in programs that target younger demographics. Consumers most likely to subscribe to at least one subscription include men, people earning over $100,000 annually, and those 25 to 34-year-olds.
Thinking about targeting across content categories could offer new subscriber acquisition opportunities. Top subscriber categories include those in news and current affairs (46%) and media and entertainment (41%) for the second consecutive year. Following closely in the rankings are sports (36%), cooking (29%), and lifestyle (29%).
Importantly, unlocking incremental growth depends on attracting first-time subscribers. Increasing investment in programs and strategies targeting younger audiences and educating them about the value of digital subscriptions is essential to sustain growth.
The power of a good bundle
The study shows that 81% of subscribers report owning subscriptions to more than one digital publication, up from 71% last year. As the number of subscribers owning multiple digital publications increases, there is an opportunity for bundled products. However, working with intermediaries offers challenges, specifically relinquishing the direct relationship with audiences to third-party platforms.
The subscription model is a vital and growing business in digital media. The availability of more subscription products and exclusive content contributes to this positive trend. To sustain the growth in direct consumer revenue, digital media companies must attract new audiences while super-serving their core power subscriber segment.
The Economist is a media brand that has led the way in subscription-based access to its content. But when it was reported by Axios last month that the media company would put its podcasts beyond a paywall, the industry took notice. As one of the first publishers to make such a move, insight into the strategic decisions around the launch are particularly valuable for any other publishers considering doing the same.
Claire Overstall, SVP, Global Head of Customer at The Economist spoke to us about the thinking behind the decision, how they have communicated the change to their millions of listeners, and what the company hopes to achieve with podcast subscriptions as part of its wider subscription strategy.
A value-add and a separate offering
The Economist’s paywalled podcasts will be available to full digital subscribers at no extra cost. “That is entirely in keeping with the general direction that we’ve taken over the last few years where we’ve been increasing the amount of things that are included in your subscriptions,” Overstall explained. “We’ve put all of our newsletters behind a paywall. We now do subscriber-only events. We’re just increasing the amount of value and the amount of things to engage with.”
The podcast subscription is being used by The Economist as a value-add for current subscribers, but also as a separate product offering. This is an unusual move; The Economist hasn’t had a separate product available to subscribe to since launching Espresso, an app which gives five short articles and a global news briefing each day. The decision to create a separate podcast offering – Economist Podcasts+ – is because of the millions of listeners the publisher has accumulated across its 18 different shows.
“There’s a whole audience there that for whatever reason enjoy our journalism but don’t want to pay the full $20 a month to subscribe,” said Overstall. “But in keeping with our belief that subscription should be the way that we fund our journalism, and making everything strategically match, we’ve decided that you can buy a podcast-only subscription in the hope that that might entice some of those millions of listeners who don’t want to pay for the full-fat product to support our journalism through paying for podcasts.”
The podcast subscription is currently the lowest cost offered by the publisher at $4.90 a month, or $49 a year. There is also currently a pre-launch half-price offer for the full year. Overstall noted that although there is every chance they may not have got everything right at launch, the pricing feels fair in comparison to the full-price subscription. “So far, we’re pleased with the response that we’ve seen,” she said of their pre-launch sale.
“There is a business benefit to upselling of course, and moving from one product to another, but also down-spinning; if people no longer have the time or the money for the full-fat products, having somewhere for them to go,” said Overstall of the lower costs options. “But in reality, the most important thing is that we’re meeting the customer at the level that they want to receive us, and with the right amount of information and the right price for where they are.”
Prioritizing the audience experience
The main reason few publishers have tried paywalling podcasts is that the technology to do so smoothly across platforms has only emerged in the past 18 months. It was important for The Economist that people were able to listen wherever they wanted.
“It’s been really, really important to us to make sure that we don’t disrupt the customer experience,” Overstall explained. “If they want to listen on Spotify, if they want to listen on Apple that’s where they should listen. We shouldn’t force people to come on our site or listen on our app if that isn’t where they’re already listening to our podcasts.”
Although Spotify has had tools to work with third-party subscriptions for some time, Apple has only recently introduced the ability for users to connect publisher subscriptions within its Podcasts app in iOS 17. Apple has also implied it may help audiences discover publishers’ paywalled content by surfacing it across the app, mitigating one of the biggest risks for others looking to follow in The Economist’s footsteps.
Since the launch of Apple’s own podcast subscription tool last year, a number of publishers such as Tortoise and Immediate Media have developed subscriber-only offerings (shows, episodes and series) as a way of warming podcast audiences up to paying. In the case of The Economist, however, the transaction is not processed through a third party, such as Apple. Instead, the subscriber signs up through The Economists site and they are then seamlessly connected through their listening platform of choice.
The pre-launch sale of the Podcasts+tier went live on September 14th ahead of a full launch this month. So far, Overstall says the response from audiences has been positive, despite paid podcasts not being commonplace.
“It completely aligns with our strategy. paying for journalism was one of the things that we led with very early; The Economist has been doing that a lot longer than many of our peers,” she said. “So that’s well-embedded in people’s minds, the way that we’ve articulated how this is supporting our journalism.”
“Even if people are choosing not to pay for it, a lot more understand the need to pay for journalism… and that’s a sea change from where we were 10 years ago where people just didn’t believe in paying for news.”
What success looks like for Podcasts+
The podcast team is keeping an open mind around the paywall, and will be carefully watching the response. Crucially, their daily flagship podcast The Intelligence, which has had more than 630 million downloads since launching, will remain free. “We are hoping that that continues to be a funnel, and then we increase listenership to that, who then convert to full paid podcast subscribers,” Overstall explained. She also said that they will do sample episodes for the paid podcasts in The Intelligence feed in order to give listeners a taste of the paywalled content.
But for The Economist, longer term success won’t be all about paid subscribers, but also about continued growth to the free-to-access The Intelligence. “I think how well we are able to swell our listenership of The Intelligence is probably more likely our health indicator,” said Overstall. “If that suddenly dwindles away to nothing, then we may have done an amazing thing right now, but how are we going to continue to grow?”
Podcasts also provide The Economist with a means to broaden its audience base. Therefore, Overstall says that “one of the things we’re also hoping for is that it will begin to diversify our subscriber base as a whole. Podcast listeners skew younger and more female in general, but also specifically our podcast listeners do as well. So we’re hoping to diversify our audience base and reach more people with this subscription.”
“Fundamentally,” she says, “we are producing good products and hoping that people pay for them. So I think the primary metrics will shift more towards engagement and conversion.”
“Keeping an eye on The Intelligence, and trying to glean any data or customer surveys or anything like that on how many people are listening to sample shows and converting from those, that will probably be a key performance indicator.”
KPIs will also change for new shows the publisher develops. “Our priority of metrics will change now and will probably be on a show-by-show basis rather than just aiming for as many people as possible for every show,” Overstall speculated. “For The Intelligence, getting as many listeners as possible will still be key. But for shows like The Prince, we’ll debate as they come up and as we make them, and how many episodes we choose to sample for non-subscribers.”
Podcast listeners are known to be highly engaged, with more than a third listening daily. This gives Overstall hope that retention for this particular group of customers will actually be fairly straightforward. “[Listening is] natural, it’s already embedded. This is something they have really opted into,” she said. “Being a first mover means that anybody opting in really genuinely does want your content enough to stay. So I’m hoping that retention will be reasonable.”
For publishers like The Economist with hard paywalls, making audio content available for free may have felt at odds with the broader subscription goals. However, given that the technology to enable payments and subscriptions have grown more publisher-friendly, the media brand is able to extend its subscription-first philosophy to its audio offerings as well. Crucially too, audiences are much more accustomed to the reasons why they should pay for professionally-produced content. Still, given the vast listener numbers (and ad revenue) The Economist’s podcasts have garnered in the past and the relative lack of paid podcasts on the market so far, the move is not without risk.
As a brand, The Economist has not shied from making the clear correlation for its audiences between subscriptions that support its quality journalism. With the addition of premium podcasts, Overstall believes that the brand will continue to make this case, and enrich the value of its subscription bundles as well.
The way we consume news has dramatically transformed in recent years. Most news organizations adopted a digital news business model and now offer subscription products. Understanding online news payment trends and dynamics is crucial to support this business model.
Recent research from the Reuters Institute, the Digital News Report, shows a marked increase in people subscribing to or making one-off payments for news content. The industry is experiencing subscription growth ranging from 10% to 17% across 20 countries in the last 10 years. It’s worth noting that online news payments are beginning to stabilize in many of these 20 countries, and a notable correlation exists between high cancellation rates and the ongoing cost-of-living crisis.
Regional variances in online news payment
Authors Nic Neuman and Dr. Craig Robertson point out significant regional differences in consumers’ willingness to pay for online news. In some Nordic countries, over a third of the population subscribes to digital news services. In the U.S., 21% of respondents indicate that they pay for online news.
In contrast, in European markets like Germany and the United Kingdom, which offer high-quality free news options, subscription rates are lower at 11% and 9%, respectively. The variations highlight the interplay between market conditions, consumer preferences, and economic factors influencing online news payment.
The research identifies a combination of five factors that drive news subscribers:
access to distinctive and high-quality news and analysis
alignment with the brand’s values or political perspective
a commitment to supporting quality journalism
a premium user experience
the inclusion of lifestyle features, puzzles, and games
The U.S. news market is notable for its news loyalists. Approximately 47% of news subscribers say that they do so because to align with specific journalists or the viewpoints of news brands. The U.S. also stands out as one of the countries with a significant portion of its population donating to news organizations, accounting for 4% of the U.S. sample. This contribution includes paying podcasters, YouTube channels, and established brands like NPR and Vox Media.
The report highlights three phases that subscribers often undergo, from interest and intent to subscribe to retention and loyalty.
Subscription triggers: The first phase is a fundamental interest in news. This and other influences often trigger a subscription, including family influence, life-stage changes, enticing promotional offers, etc.
Building habits: The second phase includes engaging new subscribers during their initial 90 days through newsletters, podcasts, and personalization to build daily forming habits.
Maintain loyalty: The last phase is when subscribers develop loyalty to their chosen outlet and consider it their trusted source for information.
Changing payment methods
The way people subscribe to online news is evolving, with 46% of subscribers opting for ongoing digital-only subscriptions. Combined print and digital packages account for 28% of subscriptions, while 34% report someone else pays or it’s bundled as part of broader service packages (e.g., TV, broadband, or mobile).
Additionally, 12% of paying respondents report making one-off or ongoing donations to news services in the past year. These diverse payment methods reflect the changing expectations and preferences of news consumers.
Subscriber demographics
While most paying subscribers are older, the willingness to pay for online news is similar across age groups. However, younger individuals are likelier to have subscriptions paid for by someone else or make smaller donations.
Interestingly, 60% of paying subscribers are men, and a significant majority (79%) have medium to high household incomes. They tend to have received higher levels of formal education and lean more towards left-leaning political affiliations, especially in the U.S.
Consumer preferences, market dynamics, and evolving subscription models shape the willingness to pay for online news. As the digital news landscape evolves, publishers acknowledge the affordability gap and are crafting solutions in response. They look for ways to remain relevant by partnering and packaging all-access bundles, extending trial periods, and flexible renewal pricing to demonstrate value and commitment.
Advertising messaging is an important trigger in increasing people’s willingness to pay for online subscriptions. New academic research, Effects of Advertising Messages on Willingness to Pay for Online News, from Bartosz Wilczek, Ina Schulte-Uentrop, and Neil Thurman, evaluates effective advertising strategies for online subscriptions. The study focuses on four types of advertising appeals: digital-specific, social, normative, and price transparency. The findings indicate that digital-specific features appeal. Aspects like personalization, online-first delivery, and online-only offers significantly impact participants’ willingness to pay. This suggests that emphasizing the unique digital advantages of online news can increase sign ups and subscription interest.
Messaging impact
This research sets out to address two crucial questions. First, it seeks to uncover the most potent individual advertising message (digital-specific, social, normative, or price transparency appeal) to drive people’s willingness to pay for online news.
The study also looks to understand which combination of advertising messages among digital-specific, social, normative, and price transparency messaging ultimately boosts people’s willingness to pay for online news.
Messaging appeal
The different respondent testing shows that digital messaging is the most potent. Social messaging that emphasizes community membership and offline and online events also positively influences participants’ willingness to pay. This finding suggests that fostering a sense of belonging and engagement within a community can enhance subscription intentions.
Normative messaging, which focuses on the importance of supporting independent, inclusive, and watchdog journalism, has a moderate positive impact on willingness to pay.
Interestingly, the price transparency appeals, which provide information on the news industry’s critical financial situation, do not significantly impact willingness to pay. This suggests that while consumers may value transparency, it may not be a primary motivating factor for subscribing to online news.
Combining messages
The research reveals that combining advertising messages can increase people’s willingness to pay for online news. Combining the normative appeal with the price transparency appeal is the most convincing. In comparison, other combinations of advertising messages do not yield significant effects on people’s willingness to pay for online news.
What’s surprising is that neither the normative nor the price transparency appeal is sufficiently convincing on its own. However, combined, they effectively increase audiences’ willingness to pay for online news. Moreover, the findings suggest that adding a digital-specific or social appeal to a subscription pitch that includes both a normative and a price transparency appeal is ineffective. One explanation could be that the more appeals a subscription pitch contains, the longer and more complex it becomes—which might decrease its effectiveness. This suggests that the efficacy of a subscription pitch depends less on the quantity and more on the quality of arguments and how well they work together.
Digital news publishers can leverage these insights to tailor their advertising strategies and enhance subscription uptake. By highlighting the unique features of online news, fostering a sense of community, and emphasizing the societal importance of independent journalism, publishers can increase consumers’ willingness to pay for online news subscriptions. However, it is important to note that normative and price transparency appeals may have a limited impact on subscription intentions on their own, suggesting the need for a multi-faceted approach to advertising online news subscriptions.
Media Voices co-host Peter Houston is tired of hearing the same old industry buzzwords. The publishing platitudes are starting to wear a bit thin, and he’s decided to see if he can shake the conversation up a bit by speaking to some of the biggest characters in the business.
The latest episode of Media Voices’ Big Noises podcast features Michelle Manafy, Editorial Director at Digital Content Next (DCN).
Michelle started out as a journalist. The rise of digital media saw her embrace the changes and after working for a range of publications, from alt weeklies to B2B titles, she joined what was then the OPA to help premium publishers with their ongoing their digital evolution. She now manages online content and events for the group, which is known as DCN.
More than a decade in, Michelle still has hope for the media, but is frustrated by many of the publishing practices she sees. “Now we’re in a world where two thirds of our job is to rise above the noise. ‘Listen to me. Look at me’ right? Are we providing a value exchange? When people give us that gift of their attention, do we provide them with value… was it worth their time?”
Understanding the habits and motivations of non-subscribers is just as crucial as studying subscribers’ behaviors when building a successful subscription-based news product. A Norwegian study, The Burden of Subscribing: How Young People Experience Digital News Subscriptions, delves into the motivations and experiences of young adults, ages 26-30, who read news online but do not pay for it.
The study takes a qualitative approach and sheds light on three key motivations for not subscribing: content exclusivity, time constraints, and unappealing payment models. Further, the study identifies additional factors contributing to people’s reluctance to subscribe to news. These factors relate to socio-demographic variables, the perceived value of news, notions of free news, payment models, and different content.
Newsgathering habits for non-subscribers
Participants access digital news but employ various strategies to gather information from non-subscription news sources. These strategies include searching for alternative coverage, borrowing login credentials, or relying on friends and family. Young adults don’t inherently oppose the idea of paying for online news. However, they express concerns about being charged for certain types of content, particularly information of significant importance and general interest. They believe such content should be free to serve the public interest.
Attracting young adults
Surprisingly, the style, format, or journalists did not influence young adults’ decision to pay for news. Instead, participants primarily focused on the content itself. They questioned whether the same information is free elsewhere, indicating a perception of a zero-reference price. Young adults were less concerned about a news provider’s unique perspective or comprehensive coverage and more focused on the availability of similar information from alternative sources. This finding highlights the need for news organizations to offer unique content not found elsewhere.
Another dimension that emerged from the analysis is how young adults perceive subscriptions in relation to time. Some participants expressed a sense of commitment to reading more thoroughly if they were to pay for a news service. However, a common trend across the sample was the perception that subscriptions were time-consuming, creating a potential barrier to their adoption.
Multiple subscription options
Interestingly, many young adults viewed subscriptions as an addition to their existing news consumption habits rather than a complete replacement. While this presents an opportunity for news organizations to attract paying subscribers, it also poses a challenge. Some participants described the experience of keeping up with multiple subscriptions as a draining chore, leading to feelings of information overload. This finding underscores the importance of considering the user experience and ensuring that subscriptions offer tangible benefits without becoming burdensome.
When considering the price of digital subscriptions, participants viewed it within the context of their overall news consumption habits. Young adults feel the value they derive from various news sources and weigh the cost of subscriptions against alternative options.
Payment options
Participants also express the need for novel subscription models to cater to their diverse media appetites. Young adults preferred micropayments and the ability to access individual articles rather than committing to full subscriptions. This approach resonated with their desire to personalize their news consumption experience. Others called for a “Spotify model” where they could select and choose content from different providers through a joint subscription.
Value proposition
This study highlights the importance of understanding non-subscriber habits and preferences to design subscription models that align with their needs. News organizations can create compelling value propositions for young adults by offering flexible payment options and exploring joint subscriptions and personalized news portfolios. By considering the overall media repertoires of young adults, news organizations can build stronger relationships and attract a loyal subscriber base.
