Digital subscriptions represent the hottest topic in news media today. Can we master the art and science behind the economics of content and create a scalable business model that will replace what media is losing in print advertising?
The Webinar covered the topics of “why freemium,” subscription stack, and pricing. Wilkinson focused on why Norway and Sweden stand out in these areas, with case studies presented on Dagens Nyheter, Aftenposten, and Amedia.
Wilkinson began with a brief historic overview, from paywall emergence in 1997, to the launch of freemium and metered models in the 2000s. By 2011-2014, metered models were widely adopted, yet under-performed for most non-global brands. Beginning in 2014, data-infused, editor-select freemium models returned in Europe and the South Pacific, while hybrid meter-freemium models were in Scandinavia.
The emerging debate, Wilkinson said, became that of what triggers a digital subscription? There were several flaws with the metered model:
Why give away so many subscription-generating articles? Why lock thousands of articles if you know they won’t trigger subscriptions?
And the big question to come out of all this: If 10% of your content drives 90% of your traffic, then how do you prioritise more of that 10%?
Digital subscriptions are data-driven and complex
As digital subscription models move from simple to complex, the trend is going away from meters to freemium or metered/freemium hybrids. Wilkinson said that media companies cannot succeed with digital subscriptions without being data-driven. The shape of a company’s paid strategy depends on whether its brand or content is considered its primary draw.
“This is really Marketing 101,” Wilkinson said. “Product, price, place, and promotion.”
Norway and Sweden
Leading the way, the media organisations in these countries have corporate cultures that rally around digital subscription takeoff. The newsroom has refocused on the economics of their content, with the emergence of KPIs, content scoring, and the science behind subscription triggers.
There was also transparency between companies and a willingness to share best practices among competitors. In 2015, most of Norway’s publishers went behind a paywall together, and 60% of Sweden’s publishers are behind a paywall.
These companies look at the genres that trigger subscriptions for them, which are different for national versus local and community newspapers. They also look at the tactics that trigger subscriptions; for example, Aftenposten lowers its meter on election day, and raises it the next day.
Wilkinson then shared several INMA case studies with Webinar attendees.
Dagens Nyheter, Sweden
As the No. 1 quality daily newspaper in Sweden, Dagens Nyheter’s circulation number is 282,800. In 2014, as print advertising dropped, the news media company looked at the digital future like everyone else. The company acknowledged that it was not building space to survive at the time.
In January 2015, the company launched its digital subscription initative with the first-ever freemium plus meter “hybrid” model. The chief editor was put in charge of digital subscriptions. In the first 32 months, the company had 87,000 purely digital subscribers, with a 12% monthly growth.
By 2016-2017, it saw digital subscriber churn rising and were afraid that their subscriptions would top out if it didn’t do something. Dagens Nyheter set up a cross-functional war room with a 15-person team that continuously problem solved this. It used SparkBeyond to help identify patterns in reader data and shifted from broad to micro segments. Dagens Nyheter reduced churn by 25% and now knows who will churn with 86% accuracy.
Aiming to be the primary news destination in Norway and Sweden, Schibsted offers a mix of popular newspapers that are traffic machines that build new verticals and quality newspapers that focus on digital subscriptions and a deep relationship with readers.
Data fuels everything. A simple scoring system is based on news values and lifetime value. Aftenposten shifted from a meter to a meter/freemium hybrid with a six-article meter and 35% of content behind the paywall.
Aftenposten also employs a journalism strategy behind reader revenue. The company discovered readers want to be guided by Aftenposten, and so it focuses on relationship and people-driven stories to produce more of the content that subscribers read and buy. This means it must be create curiosity and be visual.
“Aftenposten wants to evoke emotions; they want to be unique and have a dialogue-based relationship with readers,” Wilkinson said. “The bottom line is that obviously, if you don’t use your subcription, you have a high propensity to churn; but they are also saying if I only read politics, for instance, I could have a high propensity to churn. Or, if I only read on my mobile devices, I have a high propensity to churn.”
And Aftenposten is still very serious about journalism.
“What does this have to do with digital subscriptions? It’s an opportunity to show who you really are. The relationship and people-driven stories are very important; and they may be important to subscriptions.”
Amedia is one of the few groups in the world that has figured this out, Wilkinson said.
“Like a lot of us, around 2013-14 the print model was collapsing, and the digital model wasn’t working. One of the things I’m seeing are a lot of companies — such as The New York Times — who have realised their data was right in the first place.”
In 2015, Amedia began encouraging print subscribers to behave more digitally and to open a new front for digital subscriptions. The company launched a freemium model, which originally locked 10% of articles; that is now 40-60%.
It is also a cultural change within the company, with all its 2,000-plus employees nationwide from technology and organisational roles to editorial and management.
Amedia identified key metrics that mattered:
- Out: a focus on unique readers per day and not reporting their data to the local newsrooms.
- In: an intense focus on loyal non-subscribers and their core audience. This meant filtering out content noise, to focus on impact stories for their core audience.
Amedia also began focusing more on younger readers for digital subscriptions. “We don’t say out loud enough, because it’s probably politically incorrect, that we’ve got to get younger,” Wilkinson said. “It’s OK to say it, because we do need to get younger with our digital subscriptions.”
Amedia knows what type of content does and doesn’t trigger subscriptions. At the high end are topics such as health care, crime, real estate, and transportation. Issues like schools, travel, food, cars and business are in the middle, faring average. Topics including culture, politics, and general sports do not trigger subscriptions.
Key lessons from Amedia:
- Put the reader first and adapt to reader needs.
- Delivering this value proposition trumps everything else.
- Digital subscriptions have to be prioritised to succeed; it can’t merely be one of many initiatives.
- You have to have clear goals, be willing to change, and have a consistent feedback loop.
- The value proposition must be continuously communicated.
- Don’t be afraid to change.
- The value for readers, ultimately, is about good journalism.
“I’m going to cut through this whole presentation and tell you that there were roughly eight big takeaways,” Wilkinson said.
- This is less about digital subscriptions that it is about Marketing 101 or Journalism 101.
- Digital subscriptions are only the opening act to a bigger play.
- It’s early to definitely say what “success” looks like and what triggers subscriptions, but there are emerging clues.
- Price divergence: volume vs. premium, Netflix Line vs. print subscriptions.
- The key to success is the totality of internal culture shift.
- It’s a pointless exercise if you can’t retain readers; you must engage, engage, engage.
- Cut out the noise that gets in the way of triggering subscriptions.
- Get obsessed about the economics of content — it is the new lingua franca.
“We’re basically talking about things we should have been talking about 20, 30, 40 years ago. What differentiates publishers who are seeing more success: It’s their internal culture shift,” Wilkinson concluded. “This has to be a religious change.”
INMA: From a hyper-local point of view, how much information needs to be made available to digital subscribers?
Wilkinson: The metric says anywhere from 40-60%, but it varies greatly between publishers. It’s a wide range. I think you just need to get into your head what model works for you. It’s all about context. Are you local, community, national, global?
INMA: How do we penetrate that cultural wall?
Wilkinson: I love the challenge of talking to newsrooms about this. When journalists and editors realise that they are going to lead this revolution, I’ve yet to meet any who don’t want to embrace this. Yes, there are newsrooms that keep all of this at bay. But the preponderance of companies I’ve visited have either already made this shift or they’re in the process of making it. I think editors are smart enough and tech-savvy enough today.
INMA: What happens after the war room? How do the reader insights get communicated around the company and stay top of mind?
Wilkinson: Companies have a dashboard culture; they talk metrics and metrics. You talk about that enough and even the most recalcitrant editor who wants to be a leader is going to talk in that language.
INMA: The lifetime value that Schibsted talks about is very similar to what banks or paid TV talk about. Do you know how that matches in with engagement scores and personalisation? How do you link in the reader with your model of lifetime value?
Wilkinson: Honestly I haven’t heard a lot of conversations about lifetime value. I did hear at on Dagens Nyheter looks more and more toward telecommunications companies and banking. I don’t know if they are there yet, linking lifetime values to what they’re doing; but they are getting close.
INMA: What’s the impact on the culture of newsrooms as they become marketing and data obsessed?
Wilkinson: If your news brand doesn’t stand for something — saving democracy, standing up for your local community — you’re not going to be around for the long-term. I just think we’re getting smarter; we’re becoming more metrics aware, but also more context aware. What piece of journalism is going to add value, create long-tail buzz and PR, even if it might not trigger subscriptions. It’s not one size fits all, either-or. We are getting smarter about the context of all this.