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Featured Post | Industry-Research | Perspectives

7 critical media trends to factor into your strategy

It’s been another breakneck year for the media industry. Every year at Media Voices we round up the biggest moments from the past 12 months, and explore how they impact publishers. This year was certainly not short of industry-defining events, and Media Moments 2022 summarizes these across 10 chapters, from advertising and subscriptions to newsletters and emerging technology.  

Stepping back from the big moments of cookie delays, Twitter takeovers, and bumpy ad markets, there have been a number of developments this year which have the potential to shape publishing strategies in 2023 and beyond. Here are seven key themes from the report that will inform your approach moving forward:

1. Adblocking has returned to an all–time high

The days of adblocking causing sleepless nights for publishers seemed to be long–gone. Between the demise of third–party cookies and vigorous blocklists costing huge amounts of revenue, executives in the ad department have had plenty of other things to worry about.

Unfortunately, adblocking needs to move back up on the agenda. It has returned to levels last seen at the peak of the phenomenon in 2018, with 290 million web users actively blocking ads worldwide, according to the 2022 PageFair Adblock Report. This is an average of 21% across all geos and verticals. Solutions to tackle the problem are in short supply, and are likely to remain so unless it is prioritized again.

2. Streaming accounts for the majority time spent with TV

In August, streaming officially topped cable as the most popular method by which people in the U.S. consume television content. According to Nielsen, which runs a monthly Gauge study of TV consumption, streaming now makes up more than one–third (34.8%) of all television consumption, overtaking cable (34.4%), and far ahead of broadcast (21.6%).

Unsurprisingly, streaming powerhouses like Netflix, YouTube, Amazon Prime Video, and Disney+ are leading the charge. However, this is a notable milestone for streamers across the board. It marks a major shift in how audiences – especially younger people – engage with what we’ve traditionally thought of as television content. This opens more opportunities for publishers in the video space to get well–told stories in front of audiences. But it also means that the video landscape is more fractured than ever. 

3. Local news can be profitable on just reader revenue

The past five or so years has seen local news start–ups grow all over the world as access to publishing and revenue tools has opened up. Some have shown real promise this year, offering tantalizing glimpses of a sustainable future for local publishers.

In the U.K., The Manchester Mill, a Substack–based local news publisher, reached profitability last month with just 1,600 paying subscribers. The two–year–old brand says they are profitable off annualized subscription revenue of around $164,000. Founder Joshi Herrmann has launched two sister titles off the back of its success: the Liverpool Post and Sheffield Tribune, which are at 650 and 900 paying subscribers respectively.

For local news to truly thrive, we will need to move beyond models of just one or two reporters per city. But the early green shoots of success are encouraging.

4. There’s no sign of subscriptions decline…yet

Following Netflix’s Q2 subscriber tumble, many analysts have forecast a downturn in subscriptions. As economic pressures begin to bite, almost 30% of consumers polled by Toolkits and the National Research Group said that they planned to reduce the number of online subscriptions they hold.

But the second half of 2022 has shown that the subscriptions market is resilient. Netflix saw a spectacular bounceback in Q3, adding 2.41 million new subscribers and beating its own and analyst expectations. Publishers are seeing continued growth too: AOP members reported digital subscriptions growth at almost 15% over the last 12 months. Some have reported record performances, from the New York Times’ 9 million subscriber milestone to The Economist posting its most profitable year since 2016 on the back of 1.2 million subscribers, and total subscription revenues accounting for more than 60% of its revenues.

We may yet see a downturn depending on how pressures on consumers play out over winter. But for now, people are happy to pay for content they find valuable.

5. Email newsletters are an unexploited revenue opportunity

Email may be one of the oldest forms of digital communication, but as a revenue driver it is still very under–used by mainstream publishers. Despite the wave of Substack–led paid newsletter creators over the past few years, few publishers have attempted anything similar themselves.

A recent report from WAN–IFRA highlighted the opportunity gap around email newsletters. 48% of publishers they surveyed did not monetize their newsletters. Of those that did, advertising and exclusive sponsorships were used by 32% and 16% respectively. Significantly, newsletters were used as part of a subscription bundle rather than standalone offering were used by 30% of publishers.

Quartz is one publisher who dropped its paywall entirely this year. Interestingly, they still kept the membership scheme, and instead have a suite of premium emails they send to members. “We found that 75% of Quartz members read us primarily through email, so we’ve been putting more of our best stuff directly in their inboxes,” said CEO Zach Seward.

When it comes to advertising, I wouldn’t wish the ad tech that plagues the rest of the internet on our email inboxes. But the tech to improve the advertising experience in email via personalisation and segmentation is getting there. Now, we just have to behave responsibly with it. Newsletters have a reputation as a premium engagement method for a good reason.

6. News headlines are in a negative spiral

Following the headline findings from the Reuters Digital News Report about the growing issue of news avoidance, there has been much discussion this year on how to rebuild trust with audiences. As publishers compete for attention online, they have found ways of standing out and getting readers to click and share content. But this isn’t necessarily positive. 

One study in particular from PLoS ONE showed just the extent to which media headlines have become increasingly negative over the past two decades. The research showed headlines expressing anger were up 104% since the year 2000, fear, 150%, and sadness 54%. This isn’t because the world has got worse, even if “permacrisis” is the word of the year for 2022. Rather, negative and emotionally–arousing headlines are more likely to attract clicks and attention, which in turn means more revenue for publishers.

It’s a difficult cycle to break. The sheer amount of competition for attention means that it’s understandable publishers have to find ways of breaking through the noise. But the long–term effects of stoking outrage and despair on a near–constant basis are just beginning to be recognized. 

7. Some emerging tech is good to jump on early. Others, not so much!

Publishers who tried early experiments in NFTs have been richly rewarded. From digital covers to archive images, NFT projects have generated millions for brands like TIME, The Economist, Forbes, and Playboy over the past few years. 

However, the bottom has since fallen out of the NFT market, driven by the tough year cryptocurrency has had. NFT trading volumes collapsed 97% between January and September this year. So it’s not surprising to see publishers like CNN wrapping up their NFT marketplaces and projects.

Caution in other areas, however, is wise. Apart from a couple of publishers like Vogue testing metaverse experiences, it has been mainly consumer brands rushing to the space. 

Audiences so far have not followed. Meta had aimed to have 500,000 monthly active users for its flagship platform Horizon Worlds by the end of 2022. By October, they had revised that figure down to 280,000, although the current tally is allegedly less than 200k. Other metaverse platforms are also struggling; audits on Sandbox and Decentraland have shown that user numbers are small. Platforms seeing success like Roblox are primarily built for gaming. As yet, there is little justification for publishers to lever themselves into the metaverse at great expense. 

Trends and strategy

What is more evident when compared with previous years is how quickly things can crash. We suspected when authoring last year’s edition that, for example, that the NFT bubble would burst. We couldn’t have foreseen that would happen just months later.

Instead, innovation – whether that be audience-building, revenue generation or product – is to be found in formats that have been around for decades. Podcasts, newsletters and apps have been used by publishers of all shapes and sizes this year to deepen relationships and reduce churn. The key is to be where your audience is with a product that they need. And so far, you won’t find them in the metaverse.

Featured Post | Industry-Research | Revenue

What young media users pay for — and why

Content may want to be free, but that’s not always a sustainable business model. So, what content are users — especially the highly coveted younger demographic — willing to pay for, and why? It’s a broad question but one that’s worth trying to answer.

Massive amounts of time and money have been spent trying to figure this out. So we are aggregating many of the most salient data points to find out what younger generations are opening their virtual wallets for — and what they can do without.

Gaming

Gaming is hugely popular among all generations — especially for young people — and it holds more meaning than mere entertainment. According to 2022 research by Deloitte, 80% of U.S. adults report playing video games, and the practice is almost universal among younger adults: a whopping 96% of Gen Z and Millennials identify as gamers. The study on media trends in the United States, United Kingdom, Germany, Brazil, and Japan found that these young adults play 11 hours per week. 57% of Boomers and Mature audiences identified as gamers in the same survey, reporting an average of six hours per week gaming. Gen Z adults rank video gaming as their favorite entertainment activity in all countries surveyed.

More than three-quarters (78%) of U.S. gamers in Deloitte’s study report that the practice relaxes them; 61% said gaming helps them express themselves. In addition, 59% agree gaming has helped them through a difficult time, and 53% say gaming keeps them connected socially. These numbers show video games’ importance to people’s lives, especially the more immersive, complex games.

Gaming also leads users to discover other media content. For example, in Deloitte’s survey, 51% of U.S. and 71% of Brazilians said they often discover new music while gaming. While online immersive gaming worlds like Second Life are typically free to join, gamers often choose to spend money on branded virtual goods or even physical merchandise bought in-world. In-game live events such as music concerts are popular, with a quarter of U.S. gamers attending an in-game event last year. According to Deloitte, 82% of those attending live in-game events have made a purchase because of the event. Worth noting is that 65% of the purchases were digital goods, and 34% were physical merchandise, an indication of the overlap between real-world and virtual selves.

Over half of Gen Alpha and Gen Z players have spent money on a game over the past six months, according to a recent report by Newzoo, and 33% of them did so on a mobile device. While young users appear less likely to pay upfront for games on mobile devices due to the prevalence of free games, they are likely to spend money in-game for virtual goods such as currency, gear, or characters. Newzoo reports these are a particular draw for young users, with 93% of Gen Alpha and 91% of Gen Z gamers reporting having made such purchases over the past six months. 

According to Voxburner, the most popular games among Gen Z are Minecraft (76%), Call of Duty (73%), and Fortnite (68%). Roblox and Animal Crossing are also popular. While the mobile versions of these games are free or low-cost to install, companies are raking it in via ads and in-app purchases. For example, Fortnite made over $9 billion in its first two years, even though it is free to join and optional purchases such as skins are aesthetic with no impact on gameplay.

Streaming Video on Demand (SVOD)

Perhaps habituated by customizable gaming experiences, younger audiences seem to be customizing their video streaming experience — at least when it comes to spending. As a result, younger users of SVOD services are more likely than older users to churn through services — by joining and then canceling, sometimes repeatedly, according to Deloitte.

The study found Gen Z consumers are especially sensitive to more expensive services, engaging in “churn and return” — repeatedly canceling and rejoining. This behavior enables them to acquire desired content — like a new season of a favorite series — while avoiding paying for a service when they aren’t using it. In the U.S., 35% of Gen Z users and 38% of Millennials surveyed had canceled and renewed streaming video services during the last 12 months, compared to just 7% of Boomers and older generations.

Similarly, a Morning Consult study demonstrated users of all ages prefer ad-sponsored content that is free or lower cost to higher subscription costs — and Gen Z adults are the most cost-averse when it comes to monthly fees. Only 16% of Gen Z adults surveyed spend more than $30 a month on streaming services, compared to 31% of Millennials. These findings suggest ad-funded tiers could cut churn rates, as subscribers are unlikely to cancel a service with no monthly fee.

Research also suggests that combining media offerings is appealing to younger users. For example, 51% of Gen Zs and Millennials in Deloitte’s survey indicated they would stay with their SVOD subscription if it included gaming, a music service, or another SVOD service.

Social Media

While social media platforms offer free admission, time spent there often leads to purchases. Deloitte found 70% of people in the U.S. say they follow an influencer, and more than half of Gen Z and Millennials say these influencers sway their purchasing decisions.

Social media ads are highly targeted and personalized. More than half of American respondents, 72% of Brazilians, and about 40% in the United Kingdom, Germany, and Japan surveyed by Deloitte say they see ads on social media for products or services they have been seeking. Additionally, 39% of Japanese respondents say that shopping is among the top three activities they engage in on social media.

News

Research by The Knight Foundation found most U.S. Gen Z and Millennials surveyed (65% and 64%, respectively) said it is fair to pay for news, at least under some circumstances. Only 39% of Boomers agreed. About half of Gen Z and Millennials say it is reasonable for news organizations to charge for events; 37% of Gen Z respondents say it is reasonable to charge for exclusive or special content.

Although Gen Z through Gen X report paying less attention to all forms of news compared with the national average, more Gen Z and Millennials say they are willing to pay for news in the future, compared to older generations (22% of Millenials versus 12% of Boomers). Conversely, younger audiences were also more likely to agree that news should be free for all users via government funding and/or private donations: 30% of Gen Z agreed news should be free, compared to 17% of Boomers. Gen X and Boomers are more likely to agree it is fair to support news through advertising (38% and 31%, respectively) than Gen Z (20%).

Research from the American Press Institute’s Media Insight Project showed Gen Z and Millennials are more likely to pay for streaming services that include news content (57%) than pay for news directly (28%).

According to the Knight report, 52% of Gen Z — compared to 45% of Boomers— say they look elsewhere for news content when encountering a paywall. About twice as many Gen Zs (10%) as Boomers (6%) and the Silent Generation (5%) say they try to find the story on social media instead. In addition, boomers (29%) and Gen X (33%) are more likely to skip the news story altogether when encountering a paywall compared to Gen Z (21%). So while younger adults may believe it’s fair for news organizations to charge fees, they also appear to think it’s fair game to try to evade those fees by seeking similar content elsewhere.   

Key takeaways for media companies

  1. Young consumers avoid paying for costly subscriptions by churning through the service. Therefore, SVOD companies should explore low-cost or free ad-supported tier options less likely to be dropped by frugal users.
  2. Young people tend to be committed gamers willing to spend money on in-game enhancements. So bundles and perks that include gaming could help SVOD services — and other media companies — retain more subscribers.
  3. While younger generations believe it’s fair for news providers to be publicly funded and/or charge for unique content, they also seek news elsewhere when faced with paywalls. A twofold approach of bundling subscriptions while enabling premium single-serving content to be purchased ala carte may succeed with younger users who expect interconnected experiences with optional or customizable payment options.

Younger audiences may be highly sought after, but their preferences are pretty straightforward. Publishers paying attention to these desires can build packages that cater to them and build a loyal audience for years to come.

Featured Post | Innovation

5 principles to guide your media strategy for 2023

“Only journalism will save journalism,” says Juan Señor, an award-winning journalist and President of the Innovation Media Consulting Group. It is heartening that, as he points out, “people have rediscovered journalism.” Its importance has been cemented over the past several years, he says, “starting with The Trump Bump. Then the pandemic. Now we have a war.” 

Señor argues that high-quality, distinctive reporting produced during these tumultuous periods has had an impact. Now, he says publishers need to “keep this momentum going.”

This is a point he emphasizes in the latest Innovation in News Media World Report*, which Señor co-edits. He and fellow editor Jayant Sriram write that “we need to build from this position of strength, even as the media world at large is in a period of unprecedented flux.”

How can publishers do this? Based on our conversation with Señor, and his latest Innovation Report, here are five recommendations for publishers as they look ahead to the uncertainties of the New Year.

1. Keep your foot on the subscription gas

“The key thing is to press on with subscriptions,” Señor recommends. He is bullish about reader revenue, stressing the subscription spike many publishers have witnessed in the past few years. “People know they have to pay for news,” he says, “so be the one that they pay for.”

FIPP’s new Q3 Digital Subscription Snapshot finds that “growth for most brands remains healthy, with period-on-period gains of 5% or more for many.” But growth is slowing, cautions CEO James Hewes. Gains are “significantly down” from this time last year, “when low double-digit growth might have been expected each quarter.”

The cost of living crisis, coupled with rises in many subscriptions, may all be contributing to this. FIPP also points to a maturing of this market. That means that “it is inevitable that growth percentages will begin to decline.” 

Despite this, Señor urges publishers to stay the course. “Keep pushing [subscriptions] first and foremost as a strategic priority,” he says, “even if it means heavy discounts.”  

A key factor behind this rationale is the cost of attracting new subscribers, which is typically more expensive than keeping new ones. That’s one reason why many publishers are increasingly investing in efforts to reduce churn. 

The habitual, relationship-based, nature of media consumption also matters. As economic conditions improve, you may be able to nudge up prices or upsell existing consumers. That’s harder to do with audiences who have churned off. 

A picture containing timeline Description automatically generated
Retention tactics identified by the American Press Institute and featured in the Innovation in Media 2022-23 World Report.

2. Continue to explore opportunities for revenue diversification

Alongside maintaining relationships with existing audiences, publishers need to continue to find new routes to revenue. To help them do this, the latest Innovation Report outlines 14 different business models publishers can adopt. Publishers can mix and match these efforts to pull together a good range of diversified offerings. 

Aside from subscription-led approaches, other possibilities include a blend of B2B and B2C models such as memberships, events, affiliate marketing, and “think tank” style output. Educational activities, such as those offered by The Economist’s Executive Education program and Family Handman’s DIY University, may also be a good fit for some publishers and their audiences.

As many publishers know, if you wait long enough, then everything old becomes new again. In this regard, Señor is excited about what he describes as “the original habit-formation tool for newspapers – puzzles and games.” 

The New York Times’ acquisition of Wordle is the poster child for this, having brought “unprecedented tens of millions of new users to The Times.”  And, as The Innovation Report points out, “If even a fraction can then be converted to paying subscribers it would make for an excellent business proposition.”

Puzzles and games are again in vogue as gateways for publishers to capture new subscribers, generate fresh revenue streams and increase the “stickiness” of their relationships with audiences. 

Nevertheless, as Esther Kezia Thorpe suggests, “offering games is not a strategy in itself … Publishers need to find ways to bring regular puzzlers into a deeper relationship,” she says, “whether that be through newsletters, social features, or additional layers to the games themselves.”

A picture containing chart Description automatically generated
Examples of different publisher business models,
from the Innovation in News Media World Report 2022-23

3. Unlock the power – and results – of product thinking

Publishers have invested – and continue to invest – considerable resources in areas such as games, newsletters, and podcasts. Much of this is driven by a belief that these ventures can serve as a gateway to your content and drive subscriptions and aid retention by deepening bonds with their consumers. Señor calls them “conversion monsters.”

These efforts reflect product thinking, which has risen to the forefront of media strategies over the past decade. 

“Product thinking begins with realizing that every way people experience the news is a possible product or feature,” the Innovation Report observes. 

Each of these touchpoints, of course, is also potentially monetizable. 

As a result, “publishers must now become product companies and not just news media publishers,” Señor believes. That’s a sentiment increasingly applicable to revenue strategies, as well as content propositions.

“Product is changing everything,” agrees Luciana Cardoso, the Brazil-based Vice Chair of News Product Alliance’s Board Of Directors. Cardoso comments on how product is a driver for innovation “because we need to have the customer at the center of everything.” 

4. Be tech-led, not led by tech

This desire to be more consumer-centric, is accentuated by the need for publishers to prepare for a world without third-party cookies. Describing this as a ”first-party data moment,” Señor says these developments are “the key to a stronger future for our industry.” 

“First-party data gives us the chance to have a direct relationship, control the pricing, content and dialogue with our readers without intermediaries,” the Innovation Report states. “This is a massive shift and one we must prepare for.” 

Publishers must also look to the possibilities of Web 3.0. Señor points to the availability of “journalism without browsers” as one critical dimension of this brave new digital world. 

“When you look at how Condé Nast is experimenting with this, it’s very, very interesting,” he told us. 

One of their titles, GQ magazine, recently launched on Discord. “The way that we are thinking about it is we are throwing a party, GQ is the host, Discord is the venue and you are invited,” says Joel Pavelski, GQ’s Executive Director of Global Audience Development & Social Media.

Sign-up screen to join GQ on Discord
(7th November 2022)

Condé’s approach enables them to engage with communities in private online spaces, potentially reaching new audiences and serving existing ones in fresh ways. It’s part of a “conscious uncoupling” some publishers are having with traditional tech platforms; and part of a wider shift in media habits seen within the creator economy. 

Tapping into these emerging spaces and behaviors may reveal insights that can inform continued product thinking, drive subscription models, as well as support and shape first-party data strategies. 

5. Invest in content, especially visual media

Despite encouraging publishers to keep a watchful eye on emerging tech trends, Señor emphasizes that organizations shouldn’t go overboard. 

In terms of the industry’s wider financial footing, “the Metaverse, Web 3, none of this stuff will make the difference,” he contends. “What will make the difference is investment in journalism.”

“We need to do original reporting. A lot of people want that,” Señor says. 

As part of this, he stresses the importance of high-impact visual journalism, which he believes is “absolutely essential,” and “perhaps the most exciting new field in journalism right now.” 

Product thinking can also shape how – and where – these visual-first stories are told. ”This is transformative,” Señor says, pointing out how many of these efforts are driven by a “story first, platform second” dynamic. 

Memorable examples, such as video Op-Ed’s pioneered by The New York Times and The Miami Herald’s award-winning “House of Cards” investigation, can also yield multiple outcomes for publishers. Impactful content can be integral to industry recognition (e.g. awards), and a key driver for unlocking new subscriptions, as well as the retention and upselling of existing consumers. 

Strategic synergies: bringing these principles together

Noting that next year’s Innovation Report will be their 23rd annual publication, Señor says the examples they feature are focused on reach, relevance, or revenue. Often, these elements are deeply intertwined. 

Parlaying that relevance into different spaces and products, and encouraging audiences to pay for it, remains essential if publishers are to traverse stormy economic waters and successfully navigate their way through 2023.

“Whatever you do, put all your efforts into gaining and retaining subscribers,” Señor advocates. Everything should be “about sustaining, developing, [and] amplifying your subscription strategy.”

There’s a myriad of interconnected ways to do this. This includes multiple means to generate revenues, distinctive products to attract and retain subscribers, the knock-on effect of memorable – often visually-led – journalism, as well as deepening relationships with audiences both on and off-platform; including in new and emerging digital spaces. 

This consumer-centric model eschews the shiny object syndrome that many media players have been guilty of in the past. Instead, as a new year begins to loom on the horizon, focusing on solid content-led foundations should be their guiding light. 

As the sun sets on 2022, publishers will once again set sail and steer a path into an uncertain future. Meeting audience needs through the trifecta of content, product and subscriptions, must be their North Star as we quickly advance into these unchartered waters. 

*The Innovation In News Media World Report 2022-23 is available to WAN-IFRA members (for free) or for purchase via INNOVATION’s website.

Marketing | Perspectives | Supporter Spotlight

How to resource your team for effective subscription marketing

As we approach the end of 2022, it’s never too early to plan promotions and set an end-of-year calendar for your organization.

These initiatives often require buy-in from the whole company. While editorial and marketing teams often lead the effort, product, technology, ad sales and senior leaders all play important roles. That’s especially true when an organization is shifting from an advertising-first strategy, focused on pageviews and engagement, to a user-centered strategy. The entire team will need to be aligned on KPIs and work together to execute the digital subscription strategy.

Key roles for successful subscription marketing

The most successful subscription publishers have dedicated resources for their digital subscription business that allow them to market their offerings nimbly, and continuously optimize their efforts. For those building or growing their teams, the following roles are foundational for success:

Head of consumer revenue

A senior revenue leader directly influences the future of the company and its business model, focusing on sales and everything that drives them, like marketing campaigns and product pricing.

This individual sets group goals and KPIs and typically is not executing day-to-day efforts, but does ensure campaigns are focused on the proper channels and customers, using the most impactful messaging. The head of consumer revenue usually has product knowledge and understands what makes the product unique and valuable to users in order to monetize it.

Marketing manager

A marketing manager is typically the person who oversees day-to-day marketing campaigns.

They possess experience identifying target audiences and executing campaigns that target, engage, and convert users throughout the customer journey.

This person should have a background in digital marketing or audience engagement to be most successful at understanding the audience and how to serve them with the right message at the right time in the most impactful way. Their goals are to enhance sales and remind existing users of their benefits. Subscriptions aren’t a set-it-and-forget-it business, so the marketing manager is also important for testing different aspects of the user experience to constantly be iterating and improving campaigns.

Creative team

Every publisher needs a resource with a creative mindset to help provide a frictionless UX while adhering to company brand guidelines. In many organizations, copy comes from the marketing manager and then designers ensure the look, feel and messaging of the campaign are aligned.

When design and copy are complete, a front-end developer may build templates to use with the software that’s serving promotions. Developers are often shared resources, so we always recommend creating templates with content fields whenever possible so that others on the marketing team can create variations—updating messaging, changing headlines, moving forward with new tests or promotions, etc.—without that technical background.

Data team

It’s helpful to have data analysts working closely across functions to help marketers understand what audience segments they are looking at and what information they have about them. Based on this performance, data experts can then help enhance segmentation and build out additional campaigns. They can answer questions like, where are the low-hanging fruit? Where can you drive business? How are campaigns performing among specific audience segments? Where is there an opportunity to iterate and improve results?

As a subscription business grows, the data team ultimately plays a critical role in benchmarking KPIs like cost of acquisition, customer lifetime value, retention rates and more. More sophisticated data scientists can also provide attribution models, revenue forecasting, or even come up with creative algorithms to segment your audience.

Tech team

Although they might not be needed on a daily basis, having a technical team that can support your business is very important. This group is aware and understands the technical objectives and gains knowledge of systems and processes, learning how relevant data is leveraged throughout the organization. They can also make sure integrations are functional and that data is passed correctly between systems, which is important for making strategic recommendations around price, revenue, etc.

If there’s a single most important factor in successfully marketing a subscription program, it’s having a top leader in the newsroom and someone on the business side engaged and in agreement that subscriptions are the priority. The group can build a marketing team to be responsible for executing this strategy.

How trials & promotions can help

Depending on how complex your organization’s audience segmentation is, trials and promotions can be worthwhile for all segments if they’re well-planned and used appropriately. How can you plan now to offer the right trials and promotions in the coming months?

Trials are a way to offer sampling; in other words, trying the product before a user makes a long-term and possibly expensive commitment. In subscription, these can have a big impact on conversion rate: At Piano, we’ve seen between a 20% and 150% lift in conversions after users enter a trial period.

However, free trials on annual subscriptions are not recommended. These typically result in very low retention rates and negate much of the benefit of offering a trial in the first place. One exception is to offer introductory pricing for annual subscribers. This can be an effective way to incentivise choosing a longer subscription.

Nonetheless, promotions are a way to encourage conversion among users who might otherwise consider a product too expensive, or who previously passed on an offer to subscribe. Through pricing research, you should be able to map out a revenue curve that helps you understand what different user segments might be willing to pay and how that impacts your overall revenue projections.

Running promotions creates a sense of urgency and pushes users to convert: At Piano, we’ve seen a 64% lift in revenue during a month with promotional offers, relative to the month prior. But the key is making these promotions targeted, temporary and irregular. Keep the offers in the market for a week or two at most, allowing the most motivated, price-sensitive users to respond.

The right team will help guide you on the effectiveness and performance of trials and promotions. With strong leadership, there’s still time to put in place a strong subscription marketing plan for the rest of the year and beyond.

Perspectives | Supporter Spotlight

3 ways publishers can reduce subscriber churn

Readers and publishers both suffer from the negative effects of churn.

Obviously, publishers hate seeing readers suddenly cancel a subscription. For publishers, losing a long-term subscriber is upsetting for both the brand and bottom line.

However, readers also hate it when their subscription is suddenly terminated due to a simple mistake such as forgetting to update their subscription with a new credit card number or billing address. There they are, in the middle of reading a hard-hitting series of crime reporting, or need-to-know business information, when bam: the content is blocked. Then, they get a message like: “You’ve lost access to this content. Please contact customer service to fix the issue with your payment method”. After a few moments of uncertainty, some will make the effort required to rectify the situation. Others will seek out information elsewhere.

Having their subscription suddenly end—which is the nature of cancellations due to payment errors—disrupts the subscriber’s experience and may cause them to lose trust in the reliability of your publication. However, this disruptive experience is avoidable with the right strategy and infrastructure.

Read on to discover some tried and true strategies that help publishers (like the ones we work with) keep readers more connected to their digital subscriptions. Try these tested methods to defeat subscriber churn: 

1. Diligently remind subscribers of the amazing content they’re paying for

Getting the most value of a publishing subscription takes on different meanings for different folks. One thing is for sure: people like to stay informed of the valuable content that their subscription provides. And, significantly, low usage is the primary indicator that readers are about to cancel a subscription.

Help your readers stay engaged by keeping them updating about new content and reminding them of new features and updates that would enable them to use the subscription more often. Sending out brief reminder emails reminds your readers that their subscription has value.  

Refinery29 does a great job at reminding its readers. The weekly newsletter makes a list of seven to ten most popular articles, slaps on a catchy email subject line to entice readers to open the email, and makes every article mentioned linkable so the reader can easily go to the main website. This is a genius combination that generates high open rates and CTRs.

2. Connect digital and physical subscription experiences

Sometimes a digital subscription isn’t enough. Readers may want the option to receive hard copies or to read some articles on their tablets. Connecting the digital and physical subscription experiences is a must for publications to truly thrive in 2023.

Reader’s Digest regularly sends mailers and emails asking subscribers for their preferences, announcing new features and editions, and letting subscribers know about subscriptions outside of publishing that they’ve partnered with. For Conde Nast, readers are the first to be aware of when a print-only publication is also being offered digitally.

Beyond this, publishers are getting smarter about partnerships that connect the value of their content to physical experiences. We’re seeing a good number of publishers teaming up with different brands in different industries outside of the publishing world. These partnerships enable readers to access new deals for food delivery, takeout, personal care, cleaning supplies, and more. If you’re a publisher thinking about creating partnerships, how do you pick the right partners and optimize earnings? Audience match is key, and those insights are baked into subscription intelligence.

3. Fix the most common cause of cancellations and interruptions: failed payments

Many in media think of payment transactions as technical, backend stuff to worry about. But maintaining a seamless subscription experience means that publishers have to focus on organizing transactions in a way that will maximize the likelihood that they will not fail.

Payments that fail constitute 70% of potential revenue that could never be recovered again. In the subscription world, losing a paying reader can mean losing the present and future relationship that comes with each reader. That is why providing a good payments experience is key for retaining paying subscribers. It’s important to recover failed payments and prevent them from happening by keeping an eye on the following most common reasons for payments failure.

The most popular reasons that payments fail are: An outdated credit card number that the reader didn’t update the subscription about; errors in entering credit card information such as the wrong expiration month; insufficient funds; or change in billing address. Any of these common occurrences can happen.

Consider using software and subscription intelligence to salvage these transactions when they fail and to proactively set transactions up in a way that maximizes each transaction’s success rate. Publishers such as Wall Street Journal and The Dallas Morning News love the robustness and effectiveness of our software for recouping lost subscribers and revenue.

No churn = more return

Publishers—it’s disheartening to lose the readers whom you’ve worked so hard to acquire, nurture, and entertain. Publishing companies can do more to prevent readers from churning. By regularly reminding subscribers of the amazing content they’re paying for, expanding partnerships with brands outside of publishing, and by fixing failed payments on the backend, publishers can provide readers with more reasons to get value from their subscriptions. And more value means less reasons to cancel.

Featured Post | Innovation | Perspectives

Unlock media innovation by experimenting every day

In science, experimentation is everything. In publishing, maybe not so much.

Innovation is the go-to buzzword for ambitious publishers, but there’s no such thing as plug-and-play innovation. You can’t buy it off the shelf. I’s a process not a product. And it’s always going to be specific to your business.

For workflow specialist Kilian Schalk, experimentation is a crucial part of that process. At the Magazine Street conference in Edinburgh, Scotland, last month, New York-based Schalk emphasized the need for publishing organizations to experiment constantly if they want to get better at what they do.

“Why would you experiment every day? Well, the point is that every little incremental change can make a difference. Every time you do something you’re thinking about it. You’re being present.”

With a career stretching from Rolling Stone to the New Yorker, Schalk understands that where you start experimenting depends on what it is you want to improve in your operation. However, your pain points are the best place to begin.

Kilian Schalk onstage at the Magazine Street conference, Edinburgh Text on screen behind him reads Assumptions can be dangerous
Kilian Schalk onstage at Magazine Street, Edinburgh
Photo Credit: Philp Sayer

“What is most urgently in need of attention within the organization, those are good places to start,” he says.

He also recommends focusing first on experiments that will bring answers quickly.

Newsletters are often a great starting point. That’s because they have a regular cadence, which makes it easy to spot trends, and they operate with the same set of known users. You can also see results quickly. And adjustments made to a single email can deliver significant results.

Optimizing tactics

Effective experimentation should generally be focused on developing and optimizing tactics in the service of a larger strategy. Look first at your strategic plan and consider the measurable targets that you are trying to reach.

Schalk cautions that, sometimes the assumptions embedded in an overarching strategy can be shown to be incorrect. While this can be painful, he says it’s good news and better discovered sooner than later.

“Implementing strategies based on incorrect assumptions will drive organizations into a ditch and kill morale as well as belief in the leadership’s ability to lead,” he warns.

Becoming aware of untested assumptions is a particular challenge for leadership with deeply held beliefs about audiences or products. For Schalk the biggest asset in identifying and challenging these is a diverse and empowered team.

“People must feel free to draw on their own experience to question prevailing beliefs or speak up to ask: ‘How do we know that?’”

Schalk believes the first step surfacing assumptions that you can experiment on is to stay focused on what you are doing and ask questions as you go. He points to methods like the Five Whys to help drill down to the root cause of a problem. It works by identifying a problem and then asking why until you arrive at the reason it’s happening and, hopefully, a potential solution.

“Experimentation is not a lot of work,” says Schalk, “It’s a lot of thinking.”

Data is your friend

Before data was a thing, instinct was everything. Editors especially relied on their gut to make the big decisions from editorial calendars to cover stars. But in the world of real-time media metrics, behavioral data is a much more reliable indicator.

“Our gut instinct sometimes will lead us in good directions. But it’s most dangerous when it is unchallenged and unverified. Discovering that your instincts are incorrect is more valuable than reinforcing previously held beliefs.”

Schalk gives the example of a client whose social media schedule was driven by their content creation workflow. The publisher always shared social posts in the middle of the day, as soon as fresh content had been published to the web. Although they were unhappy with engagement levels, they had never stopped to think about the best time to post. They assumed that audiences would simply read content when it was posted.

Once they surfaced this issue, they tested the assumption by sharing their content at night instead of at 3pm. In doing so, they found that the aggregate audience engagement for their publication was five times higher at night. When they did some research they discovered their new audience were parents and, once they’d put their kids to sleep, that’s when they went on Facebook.

Critical thinking

Schalk says that if you think critically about the nature of your problems, the potential solution is usually not far behind. He explains that “learning how to learn” is a key skill in mastering an efficient experimental mindset and that comes from thinking critically and running experiments on a day-to-day basis.

Giving things a go is very different from running formal experimentation and while there are many ways to set up experiments, the most effective will answer the following three questions:

  • What has been happening?
  • What do we think will happen if we do something different?
  • How will we measure this?

Once the experiment has been run and the data gathered, you can then ask:

  • What actually happened?
  • How does what happened compare with what we thought would happen?
  • What did we learn?

Schalk says things are most likely to go off the rails when a publishing team doesn’t produce a written, measurable hypothesis that they are trying to prove or disprove. They haven’t answered the question ‘What do we think will happen?’

“The human instinct is to preserve energy by not going against the flow,” he explains. “This means people wait for the results then ‘rewrite’ the hypothesis in such a way that it justifies previously held beliefs. This is especially important when it comes to assumptions that leadership holds dear.”

Outside in

A key concern in deciding what experiments to run is whether to focus efforts internally or externally.

The decision ultimately depends on the specific needs of the business, but Schalk says that in a multi-channel world, most brands want to know about their audience first.

Once a clear understanding of what your audience responds well to and where organizational energy should be directed, the focus can shift to internal experiments that will help make specific workflows more efficient and effective, delivering more or different content at the right time to the right places.

From the stage in Edinburgh, Schalk gave some examples of experiments that delivered real results.

  • A weekly magazine, 100 years old, worried that their subscriber base was getting older. They assumed that their online engagement was concentrated among their oldest readers. However, they discovered that the youngest members of their audience were every bit as engaged online as the oldest. Taking this data as their starting point they experimented with a podcast targeting a younger demographic. It was a hit.

“I was supposed to have lunch with the editor, Zach, but he canceled on me because he had been invited to give a live performance of the podcast in Australia”.

  • A bi-weekly newspaper alternated print editions with an email newsletter. The open rates on the newsletter were dropping and they knew they were in trouble if they didn’t change something. Instead of publishing on Thursdays, they decided to experiment with a Saturday send. The hypothesis was that open rates would increase because people might have the time to sit back and read it on the weekend. Open rates doubled.

“It took probably 10 seconds to pick a different send time on their newsletter. They just had to have the imagination to try something different.”

  • A monthly magazine launched a weekly newsletter. Results were good, but they noticed a button in their email distribution service that said ‘Resend content’ which would send the email again to anyone who didn’t open it the first time. The resend increased their open rate by 12%, taking it from 39% to 51%.

“They used what I call the ‘what does this button do’ approach. Now, more than half the people that get their newsletter open it.”

Does experimentation work?

Schalk is careful to point out that not every experiment works and that there is no specific set of instructions or examples to follow. Of course, what works for some publishing organizations might not work for others.

He suggests that it’s OK to use other people’s results as inspiration. However it is important to recognize that unless you are working with your own data you won’t know what you are actually dealing with. “Your circumstances may be quite different from someone else’s. And you may get very different results from a similar experiment.”

Reassuringly, running your own experiments shouldn’t require a huge investment.

“The goal is to adjust what you are already doing in a way that allows you to learn something new. The power is to show you something you didn’t know you didn’t know.”

Perspectives | Supporter Spotlight

Simple data strategies for subscriptions

We live in a world where there is no shortage of data: first-party, third-party, and zero-party. However, most publishing organizations run the risk of boiling the ocean with too much data at their disposal and too little actionable insights to be gleaned from it. In my view, data visibility can bring alignment across multiple departments of a publishing organization and steer the organization towards common goals.

This post is about two specific use cases and actionable insights from first-party data that publishers can use to optimize their editorial and subscription strategies. These tangible use cases can help you seed a solid foundation for a data driven organization.

Using data to optimize editorial strategy

Most publishers rely on last touch attribution to understand which content converts users to subscriptions. No matter what attribution methodology you use, there are gaps in coordination between the editorial and marketing teams at most media organizations – which ultimately results in leaving subscription revenue on the table. Let’s take this 2×2 scatter plot as an example:

The ability to plot each piece of content on a conversions versus pageviews scatter plot can distill strategic outcomes for the entire organization. Each quadrant on the scatter plot leads to actionable insights for different departments:

  1. High Conversions – High Pageviews: This segment of content is being marketed well and is generating high conversions. Maintaining status quo with all departments is recommended with content falling in this quadrant.
  2. High Conversions – Low Pageviews: This segment of content is being marketed poorly but has high conversions. The marketing team should take action to promote this content across all of its channels.
  3. Low Conversions – Low Pageviews: This segment of content is not converting. The action is on the editorial team to reconsider its strategy for this type of content. Alternatively, the subscriptions team can consider trying a lower priced offer for this type of content to test if the conversions go up.
  4. Low Conversions – High Pageviews: This segment of content can be earmarked outside the paywall to maintain a healthy balance of site traffic.

The main takeaway to consider here is not about data collection but more about data representation and the importance of data visibility within the entire organization in near real-time. A simple graphic like this can help editorial and marketing teams understand what actions need to be taken. Still, there needs to be alignment on common goals, constant coordination, and outcome based service level agreements (SLAs) in place to execute on any editorial strategy.

Using simple data points to convert never-subscribers

Almost every publisher has two main types of audiences: ardent fans and casual users. For the sake of simplicity let’s call them subscribers and never-subscribers. To convert never-subscribers, you first have to know who they are. The good news is you don’t necessarily need sophisticated AI to understand who your never-subscribers are. There are many simpler options and proxies at your disposal.

Assuming you track the digital footprint for anonymous users, you can track which users have rejected your subscription paywall once or twice in the last 30 days. It is a clear indication that the user is casual in nature and potentially seeks another offer in order to convert to a paying user. Lowering the hurdle to a bitesize offer might be a prudent move at this stage.

Another proxy to identify never-subscribers would be to dissect the sources of your site traffic. Other than direct traffic, you will have traffic coming from social media, chat apps, content aggregator sites, search, paid media, etc. Attributing a scoring mechanism depending on the source could quickly help decipher if the anonymous user is a potential subscriber or not. For example, you may find Twitter users have a higher propensity to subscribe but Facebook users are very unlikely to subscribe. With this in mind, you should show a lower threshold offer to users landing from Facebook.

If you have global audiences, you could dissect anonymous users by geography. For example, you might say that domestic users are more inclined to take my all-you-can-eat subscription while international users will require a lower entry barrier. With this in mind, I might offer an introductory bitesize subscription option.

Here is an example that publishers can use to segment their audiences from very basic traffic data:

At the end of the day, if you are in the digital subscriptions business, your objective is to maximize your recurring revenue. This requires you to understand the lowest payment threshold an individual user is willing to commit to. With that information in hand, your marketing team must make a concerted effort to re-engage the user to move up your value chain.

About the author

Abhishek Sharma is a Co-Founder and CTO of Fewcents, a plug-and-play solution for publishers and creators to collect small payments in 80+ currencies. He has 18 years of experience in strategic consulting, vendor management, project and delivery management, business analysis, solution design, and application development. He specializes in building high-frequency trading systems, integrating with payment partners such as Paypal, Stripe, etc, and working on regulatory risk engines using big data technologies. Prior to this, Abhishek worked at DBS Bank, Credit Agricole, and MSCI Inc.

Perspectives | Revenue | Supporter Spotlight

How to get back to growth in the post-pandemic subscription marketplace

The pandemic marked a period of explosive growth for subscription commerce. However–given the economic situation, easing restrictions, and a shift in lifestyle–the tides have turned.

Subscription brands—especially media organizations—are seeing new challenges arise in both retention and acquisition. Streaming giant Netflix made headlines by losing 200 million and nearly 100 million subscribers in two consecutive quarters this year. A different strategy and renewed attention are required to expertly navigate this next phase of our endemic subscription landscape and beyond.  

In this article, we delve into what’s changing in the subscription landscape and how recurring revenue businesses can adapt and flourish. 

The changing sands in subscription commerce 

The same factors that fueled the subscription explosion during the pandemic seem to now be shifting in the opposite direction. Our research has found a number of factors that are impacting consumer appetite for subscriptions and the overall subscription landscape: 

  • Shrinking expense budgets: Rising inflation and fears of an impending recession are curtailing consumers’ discretionary spending behavior. Just over 90% of subscribers say they are concerned about inflation and its impact on the cost of goods and services.
  • Reduced movement restrictions: As social distancing compulsions ease, people are once again enjoying in-person shopping experiences. This movement shifts several premium-priced subscription categories from “necessities” to convenience-based “luxuries.” The impact is clearly felt in consumers’ increased cost sensitivity towards subscriptions, which has dropped from 2% in October 2021 to 22% in March 2022. 
  • Lifestyle changes: As travel and entertainment options resume, lifestyle shifts are happening. Statistically, 46% of consumers expressed excitement about in-person dining, 45% about domestic travel, and 43% about in-person events. This shifting preference has a natural spillover to weekends dining out instead of dining in, for example. This impacts the different “stay-at-home” subscription bundles like meal kits.
  • Classic subscription fatigue: The impact of subscription fatigue is also becoming apparent. Consumers realize they are spending more on subscriptions than they need or desire. In addition, 22% suggest feeling overwhelmed with the number of subscriptions they currently own. And that clearly feeds into their decision to withdraw.

What to make of this mercurial market? It’s time for merchants to harness the above insights to intervene and adapt.

How to stabilize during this COVID aftermath

Stabilizing through the changing tides requires businesses to pivot their subscription models to increase consumer value perception as a result of their changing interests. 

Here are some actionable ways merchants can adapt to changing consumer preferences:

  • Help people save money: As consumers become more cost-conscious, offering subscriptions that promote saving can be powerful. As found in a Recurly study, only 20% of U.S. subscribers intend to sign up for more subscription services, while 49% plan to keep their subscriptions the same due to the rising prices. Introducing “Subscribe and save options” or providing handsome bargains for “lock-in” subscriptions–for example, securing an annual subscription at a lower monthly rate–can be helpful to reverse price-conscious unsubscribes. 
  • Introduce greater price flexibility: For non-essential subscriptions (the “nice-to-haves”), offering tiered packages can help mitigate churn risks. Allowing users to pay less for reduced features can fuel retention. Netflix has leveraged this by offering lower subscription fees for consumers consenting to watch ads. 
  • Put customers in the driver’s seat: Customers now want greater freedom, personalization, and choices as their lifestyles change and consumption patterns shift. For example, 82% of subscribers state that being able to pay with their preferred payment methods is one of the features they want most from merchants–and that’s up from 69% in October 2021. That said, offering too many options can cause analysis paralysis, so experiment with pricing and packaging to find the right balance for your subscribers. 
  • Help people save their time: Studies suggest 81% of shoppers wouldn’t mind continuing subscriptions if they could save time and enjoy greater convenience, despite surging inflation. Merchants offering pricier subscription bundles that help people save the value of their time can continue to triumph if they can effectively convey that value.
  • Ensure excellent customer experiences: Customer experience remains paramount to successful subscriptions and even more so in the current volatile and maturing market. Allowing customers to pay easily with their preferred payment methods, access flexible renewal and cancellation opportunities, and enjoy prompt support as needed will fuel lasting retention outcomes.
  • Increase win-back chances with pause options: Despite efforts toward retention, some customer segments may still be unwilling or unable to continue.. Offering them a softer alternative of pause can help to retain them in the fold and increase their likelihood to re-subscribe in the future. We’ve seen merchants that use our pause feature experience a 46% reactivation rate, demonstrating the power of this magical button.

While the pandemic accelerated the demand for subscriptions, the current correction demands a pivot to thrive in this evolving market and inflationary climate. 

Subscribers continue to seek value–whether for their money, time, or both. Hitting the sweet spot requires making necessary changes to existing models or subscription bundles to adhere to the reimagined consumers’ preferences. 

About the author

Theresa McEndree is the Chief Marketing Officer at Recurly, a subscription management and billing platform that maximizes subscriber lifetime value with expertise, technology, and insights for global brands.

DCN-Research | Research

It’s a critical time to refocus your subscription strategy

Over the past 20-plus years, digital subscriptions have become essential to sustainable growth for media companies as part of their revenue diversification strategy. We know the pandemic created a strong consumer appetite for subscriptions. However, the digital media industry is wisely considering the future trajectory as the subscription marketplace faces heightened competition and inflation.

The research

Digital Content Next (DCN) partnered with FT Strategies to better understand the digital subscription market, explore the macroeconomic influences, and identify best practices for future growth. 

The research, Navigating the Future of Digital Subscriptions, used a three-prong approach to analyze market conditions and identify business practices for subscription growth.

  1. Qualitative interviews with a subset of senior executives from DCN member organizations to discuss business development and strategies for capturing future opportunities.
  2. A quantitative survey among DCN member organizations on their priorities for the future as the subscription economy develops.
  3. Review of data, analyses, and reports from the government, financial institutions, industry, trade organizations, trade publications, and consulting firms to identify and explain factors affecting the overall economic climate in the U.S. and their impact on the digital subscription economy.

Macro analysis

The Covid pandemic was a critical inflection point that significantly impacted consumer behavior and subscription offerings in the digital content market. However, as the effects of the pandemic wane, the market faces new economic pressures.

On the business side, higher interest rates could affect business investment. For consumers, increasing inflation rates, accelerating price-increases, and the reduction in consumer savings may force many to cut back on what they deem non-essential. Further, falling unemployment rates impact digital media companies in acquiring and retaining talent, which can also add costs.

Even with the economic factors plaguing the market, our analysis concludes that the digital subscription economy is expected to continue its strong growth and is somewhat insulated from adverse economic conditions. However, digital content companies must be mindful of the risks posed by the changing macroeconomic climate.

The report, which is available to members of DCN, provides details on the economic forecasts for advertising and subscription revenue, plus additional insight into the cost of doing business and the competitive marketplace. As the subscription economy continues to grow over the next three years, audiences will likely be the target of many subscription businesses from a broader set of media outlets.

Navigating the future

The research outlines four areas of focus on how best to navigate and implement new strategies for future growth in digital subscriptions.

  • Align the subscription mission with a highly collaborative organizational structure.
  • Find and leverage the right audience data to act as a common language across the organization.
  • Think more broadly about what innovation means to attract new audiences.
  • Expand content distribution to accelerate audience growth.

Digital media companies are in a stronger position now to invest and prioritize their subscription business. While overall market projections look positive, monitoring and responding to shifts in macroeconomic factors is essential to inform how best to navigate the future of the digital subscription business.  The full report includes a macro analysis of current market conditions, market forecast, and steps to navigate future subscription growth.

Full research report for DCN members only. Register to download. The link will appear immediately below. If you’re already registered, the login button is on the top right of the page.

Perspectives | Revenue | Supporter Spotlight

How to increase your subscriber base despite the economic downturn

Throughout the pandemic and well into 2022, the narrative in publishing was simple: subscriptions are the future. With third-party cookies on the way out and traffic from social media less reliable than ever, subscriptions emerged as the stable revenue source digital media had been seeking for well over two decades. And the numbers backed it up. When the New York Times hit 10 million digital subscribers it was was touted throughout the industry. And numerous otheroutlets have reported a surge in paying customers.

Some deflation was probably inevitable, and in the last few months it’s started peeking over the horizon. Reuters’ Annual Digital News Report was bullish on subscriptions in 2020 and 2021, but this year’s installment says that “there are signs that overall growth might be leveling off.” NiemanLab, citing data from paywall tech company Piano, also recently reported that “a significant number of new subscribers cancel their digital subscriptions within a day.”

There is no question that subscriptions are still a highly viable revenue source, and will remain so for the indefinite future. But outlets that want to maintain and expand their subscriber base in a challenging, competitive environment will need to develop a deeper sense of what keeps readers subscribing––and what brings them onboard in the first place.

What drives readers to subscribe––and renew?

Access to quality content 

The common wisdom used to be that your best stories should go outside the paywall because those were the stories most likely to bring in new users (and help boost pageviews and ad dollars in the process). 

Recently, though, some have turned that common wisdom on its head, with intriguing results. Look at Business Insider: in recent years they’ve aggressively paywalled some of their biggest scoops, and have grown their subscriber base significantly in the process. Scoop, of course, is the key word here. Users are willing to pay for the kind of distinctive content they can’t get for free elsewhere.

Feeling part of a community

As the big social platforms know well, community is the “stickiest” thing a company can offer. Nothing draws users back more reliably than vibrant on-site conversation. Data from OpenWeb’s network of 1,000+ global publishers shows that those who engage with the conversation view 4.5X more pages. They also spend 3.6X more time on-site, and drive 3.2X more revenue than non-engaged users. Better yet, on average, 25% of these users return monthly. Publishers have been trying to turn their websites into social hubs for over a decade now. But with Facebook effectively abandoning the social news space as it pivots to TikTok-style videos, publishers have more breathing room to cultivate communities of their own. 

Subscriber perks

The last few years have seen more attention paid to what InPublishing calls a “rounded membership proposition”––i.e., everything an outlet offers besides its content. This can take countless forms: from puzzle games (like the New York Times’ Wordle) to subscriber-only podcasts, newsletters, Discord communities, cooking courses, and more. These can go a long way towards that “bang for your buck” feeling that keeps subscriptions off the chopping block.

Interactivity

According to the Piano data referenced earlier, 40% of subscribers are “sleepers”––i.e., people who don’t interact with their subscription at all. As it happens, a large percentage of these people cancel the moment they “wake up.” 

The solution? Prevent them from falling asleep in the first place, through interactive content. Things like expert AMAs, live blogs, and staff Q&As are simple to set up and great for retention: they force users to come to your site at specific times and get them used to checking your content regularly.

Appeal of individual journalists

At this point, certain journalists are minor celebrities in their own right––and publishers should do everything they can to harness that star power. The New York Times’ newsletters do an excellent job of this. However, every publication has actual or potential stars, and cultivating them can go a long way towards boosting reader loyalty.

Subscriber acquisition starts with knowing readers better

When publishers expand the scope of their content offerings, they create a positive feedback loop. Comments sections, subscriber posts, journalist Q&As––these things keep readers on-site for longer and grant publishers fine-grained insight into how their content is resonating. That data can then be used to further refine subscription offerings, bringing in even more users and even more data, which can then––well, you get the idea. Figuring out precisely what your audience wants is a difficult task, and no one size fits all. But knowledge in this arena is inevitably cumulative––data begets data, every time.

Even the most optimistic observer of the ’20s subscription surge knew, on some level, that it couldn’t last forever. A leveling-out was always in the cards. For publishers, accepting the challenge of this moment means getting creative––experimenting, seeing what works, and building the kind of audience that will stick with you through this downturn and long beyond it.

Perspectives | Revenue | Supporter Spotlight

3 tips for lean teams managing multiple subscription sites

Subscription marketing teams are managing more digital media properties than ever after what seems like near-daily announcements about media acquisitions. In light of the growing necessity of digital engagement and audience targeting to grow reader revenue, media companies are looking for opportunities to consolidate their resources and encourage staff to be more efficient.

For lean teams or individual champions managing multiple sites, taking a few simple steps can help streamline workflows and apply audience lessons more broadly.

1. Manage user identity globally

Google may have delayed its deprecation of third-party cookies yet again, but publishers are still wise to set themselves up for a future based on first-party data. For most publishers, the obvious way to develop a trove of user identity data is by encouraging users to register for accounts or pay for subscriptions. 

Regardless of whether your registration offer is free or paid, the big step to make this easier on both your internal team and your users is consolidating accounts across properties—in other words, creating one set of log-in credentials for users that control access across all of your managed sites and apps. This requires some up-front configuration, but it’s a win-win. Not only will your marketing twam have a holistic view of your audience, but your users will only have one set of credentials to remember and manage their access to multiple content sources.

2. Combine data analysis across properties

Analyzing user behavior across individual sites might leave you in the dark on key audience patterns. With your combined user identity system, you’ll be set up to analyze behavior metrics across sites rather than (or in addition to) in silos.

This view of user behavior on individual sites and across all properties will help you gain a deeper understanding of your audience’s motivations. Armed with this information, you will have fuel for targeted marketing and better user experiences, as well as more audience segmentation options for multi-property ad sales. This comprehensive view may also help you identify anomalies in your data, like a drop in conversions or traffic, to fix any issues that might come up for a single site or app.

3. Templatize experiences and conversion offers

Continuous testing and optimization is the name of the game when it comes to subscription growth. But it’s incredibly tedious to duplicate every update you make across 5, 10, or even 20+ sites for major publishing groups. We’ve found that creating these elements as modular, customizable units is the best way to manage this test-and-learn approach. 

This allows you to keep the framework you know is effective, while customizing specific delivery for individual brands or properties. Then, you can ideally deploy them across multiple applications from a centralized view. Building a template library over time will also allow you to reuse seasonal promotions, like discounts around the back-to-school season or for holiday gifting. This will also create efficiencies in delegating resources, as well. Rather than having individual resources managing the promotions, user flows, marketing, and more for each brand in your publishing group, a shared services resource can be working on multiple brands at one time. This allows you to make the most of your team’s bandwidth and do more with less.

Managing a handful — or even dozens — of sites and apps is no small feat. But implementing a smart system from the onset will set you up for long-term success.

Industry-Research

The shift to non-game app spending signals change in the mobile market

More than half of U.S. app store spending now comes from non-games apps compared to five years ago when games apps accounted for more than two-thirds of total app spending. The shift to non-game apps signals a change in the mobile market from early days, when consumers were less willing to spend on subscriptions or in-app purchases.

According to Sensor Tower’s Q2 2022 Data Digest Report, while spending on mobile games has slowed, the rapid rise of spending on non-games shows a strong potential for growth on mobile. In fact, the report shows that U.S. consumer spending on non-games grew at more than twice the rate of games. Non-games achieved a compound annual growth rate of 40% since June 2014, compared to less than 20% for games.

Spending on non-game apps continues to outpace the spending growth in mobile games. This trend was a reversal from 2019 and 2020, when mobile game spending was consistently higher than non- games apps. While mobile game spending surged at the beginning of the pandemic, by the end of 2020, non-game growth was about equal, then advanced ahead of mobile games by mid-2021.

As the market adjusted itself from the rapid growth registered in the early months of the pandemic, mobile app revenue overall declined year-over-year for the first time in May 2022.

The growing subscription market is helping app growth across a variety of categories. App download activity includes U.S. consumers spending one million dollars across 400 different apps, with a large percentage on subscriptions. Content companies in the U.S. and China controlled the top spots on the App Store, combining for 45% of all installs on the platform in Q2 2022. Top subscription apps include Disney+, HBO Max, and Hulu.

The Sensor Tower methodology includes App Store and Google Play download estimates for April 1, 2022, through June 30, 2022. The estimates use downloads per-user base and only one download per Apple or Google account counts in its total. Downloads of the same app to multiple devices like updates, or re-installs by the same person are not included in the total.

App market overview

Like many entertainment and informational products, U.S. consumer spending on apps soared in April 2020 at the start of the Covid pandemic. Year-over-year growth jumped from around twenty to thirty percent in 2019 to thirty-five to fifty percent in 2020. With app revenue readjusting itself from the rapid growth of Covid’s early days, revenues declined year-over-year for the first time in Q2 2022. It’s important to note, that even with a year-over-year decline, Q2 20222 is up 71% compared to Q2 2019, before the pandemic.

Interestingly, Apple’s App Store generated approximately $43.7 billion from in-app purchases, subscriptions, and premium apps and games in the U.S., up 5.6% year over year. In contrast, Google’s store registered $21.3 billion, down 7.4% year over year. 

TikTok was the number one download app globally and the number one spot in the U.S. With close to 14 million downloads, it was four million downloads ahead of the second-place app, Facebook.  Amazon led as the top shopping app since Q4 2018 in the U.S., however, this ended in Q2 2022. SHEIN, a fast-fashion retail app based in China, ranks as the number one shopping app with the most U.S. downloads.

App downloads signal a return to norms

The Q2 report shows U.S. consumers returning to pre-pandemic activities. Travel apps received record high downloads while airline mobile apps increased more than 30% compared to Q2 2019. Further, consumers want to attend concerts and in-person sporting events, with the top five ticketing apps registering more than 10 million downloads combined, an increase of 70% compared to pre-pandemic Q2 2019.

Tracking mobile downloads, app popularity over time, and spending across app categories offers insight into consumer actions, activities, and shifts in behavior – all drivers of market share. Sensor Tower app download and spend analysis identifies a positive shift in consumers’ willingness to make purchases on their phones. It also shows consumers shifting app categories from mobile games to non-game apps, namely subscriptions, and a return to some pre-Covid activities.

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