The Daily Beast is celebrating its 5-year anniversary. Bonnier has hit its stride with digital reader revenue, which now represented 72% of total revenue. Business Insider has a plan to get to 1 billion unique views.
Here is what they shared with a crowd of 200+ digital subscription devotees at INMA Media Subscriptions Summit.
The Daily Beast details 3 years of growth
The Daily Beast celebrates its 5-year anniversary this year. Lauren Bertolini, chief product officer, led attendees at INMA’s Media Subscription Summit through the past three years of the organisation’s digital subscription strategy.
Year 1: What we knew (2017-18)
“We were just kicking around the idea of a subscription business,” Bertolini said. “We knew we had a more loyal audience than many of our competitors.”
Users were visiting five times a month, on average. “We knew we wanted to do a paywall, though we were really concerned if they didn’t convert, we would see a revenue hit, so we went with a freemium model.”
Until that point, The Daily Beast had never taken a dollar from readers and had no legacy of reader revenue. There was no Web site login or user management, and no one team member dedicated to subscriptions.
“We needed to conceptualise our benefits to our readers,” Bertolini said. They knew that for their readers, a clear message was better than a cute one. They also knew that it took seven sessions for someone to convert.
The Daily Beast created an offer with base pricing of US$35 per year or US$4.99 per month. They also found that a US$1 trial beats no trial at all.
“We also played around with some crazy trials, such as one cent for one month,” Bertolini said, but admitted that didn’t work because readers didn’t value the offering. “We saw a 10 times higher rate of auto renew being disabled. The value had to be high enough.”
Year 2: Building a loyalty funnel (2019)
Their funnel had these three layers:
- Reach: 1-4 sessions per month. This was 94% of their audience and represented 52% of revenue.
- Engagement: 5-6 sessions per month. This was 2% of audience and 5% of revenue.
- Habit: 7+ sessions per month, which was 4% of audience but represented 43% of revenue.
Bertolini shared their key findings:
- Touting strong journalism (unlocked) and exclusive content (locked) drives CVR.
- Some users, while loyal, were never going to convert.
- Frequency didn’t necessarily equal loyalty or conversion.
“That 1 to 4% reach group that we thought weren’t loyal, we had a ton converting and we didn’t know why,” she said. What they discovered was that these readers were largely coming from Twitter or Drudge. While 22% of those readers visited the Web site infrequently, they knew the brand well and often subscribed to read content from specific writers or on specific topics that interested them.
And while 60% were coming to The Daily Beast frequently, they weren’t loyal and weren’t converting or visiting the home page. These visitors often came from apps or newsletters, and their loyalty lay with an off-platform product.
“The home page is core to The Beast’s inside growth,” Bertolini said. “One in five conversions start on the home page.”
Year 3: Loyalty funnel + home page + session volume (2020)
Going into the third year, the team has segmented readers into three groups.
- Story (72%): This group visits just to read one story, one session only without visiting the home page.
- Brand awareness (24%): One session including a home page visit, or two or more sessions without the home page. This was 24% of the audience, and achieved 4x ARPU.
- Product loyal (3%): Two or more sessions including the home page. They are the ones most likely to subscribe, representing 31% of revenue and 26x ARPU.
“We actually get about a third of our revenue from each segment,” Bertolini said. “We understand the stages of the life cycle for the readers of each group, and these may be on different products.”
Bertolini shared the team’s top priorities right now:
- Find the right way to monetise users who only want to read that one story.
- Educate users to move from brand awareness to loyalty.
- Learn how to drive the loyalists into products they love, and focus on retention.
They are trying to figure out how to get the lowest value cohort, representing only .00023%, to come back and how to monetise this audience. “For right now, we’re going to let them go,” she said.
For the middle group (brand awareness), the goal is to get them to opt into push notifications. “Users are 25 times more likely to give us an email address than those who sign up for the US$1 trial. These are often coming in from social media. We want to build a strong marketing funnel and get them to subscribe to our newsletters.”
She added that newsletters are so important for a small publisher like The Daily Beast. “We’ll never have the reach, with 60 journalists, that our competitors have. Getting those emails and teaching them about why our journalism is so important is our goal.”
For the third group, the loyalists, the team wants to spend time creating more products that are mutually beneficial. “When it comes to loyalists, we need to really think about getting them to stay. We are doing that with three products we know they love: the app, the home page, and newsletters. We want to drive the right users into the app and get them to stay longer.”
Bertolini said that they don’t do a great job of showcasing all of the newsletter offerings, and want to do a better job of onboarding and getting subscribers into the right newsletters.
“We think if we do this well, we will be well on the path to building a sustainable business for a mid-size publisher,” she concluded.
10 things Dagens Nyheter/Bonnier News does differently
“Basically, my job description is to be a manager of change within the organisation,” said Martin Jönsson, head of editorial development at Bonnier News. “These strategies don’t work for everyone, and even when you find one that works for you, you’re constantly tweaking it.”
Bonnier News is the largest media company in Sweden and is growing as a company. The company currently has 1.3 million subscribers, almost half of which are digital only.
“We have different brands, all of which have undergone digital transformation, though at different stages,” Jönsson said.
Speaking specifically about Dagens Nyheter, he said the publisher is entering 2020 in a stronger position than ever before. “We’ve grown subscribers three years in a row. We’re on stable ground in very unstable times.”
He admitted the company had lost about 40% of print circulation in four years — but still grew the overall number of subscriptions by 26%, due to the rapid digital growth of digital subscriptions (+182%).
“These have a direct effect on earnings,” Jönsson said. “Reader revenue in 2019 represented 72% of total revenue.”
He outlined Bonnier’s four stages of growth in both reader revenue and editorial.
- Lower costs.
- Integration and upselling.
- Paid content and conversion.
- Optmisation and work flow.
- Habit and loyalty.
A big part of this transformation has consisted of working on cultural change within the newsroom. “For the past two to three years, we’ve focused on the cost side and optimising lifetime value. The strategy is that we want to create the same kind of loyalty that we used to have with our print business. The way to do this is through digital quality.”
Jönsson outlined the 10 areas in which Bonnier operates differently from most other news publishers.
- Bonnier plans and publishes as if print did not exist. This means optimising publication times for each story, a total makeover of newsroom culture to mobile-first, and a strong focus on habit-forming and loyalty. This has resulted in a major shift in our audience and growth in new market areas.
- Bonnier never shows it have a paywall. The paywall changes over time and between individuals and we talk about value, not borders. We show what you get as a subscriber.
- Bonnier publications do not have one paywall; it has many. Our metered and premium models represent 35%-40% of all conversions. Our dashboard puts high performing content behind a paywall after three to four hours.
- Bonnier has no fixed prices. The company offers various packages based on propensity to pay, and optimise lifetime net value. We do a ridiculous amount of A/B testing, focus on upsells and change of payment method at the first sell. We also use a giveaway flow to reward loyal subscribers.
- The editor-in-chief is also our CMO. This makes Bonnier a truly cross-functional organisation, which means it has agile processes to link newsroom, analytics, developers, and reader revenue staff — all fostering faster innovation.
- Bonnier has cancelled most external campaigns. In three years, it reduced telemarketing from 40% to 3%, cut down drastically on social media marketing, using mostly in-house agency campaigning or its own channels.
- Its advertising and reader revenue departments work together. Bonnier offers free trial periods to customers of large advertisers and create integrated deals. This is cost-free marketing, and conversion rates are up to 20%.
- Bonnier lots of dashboards, and everyone uses them. The company is data-informed, not data-driven, and has total transparency around data. Bonnier focuses on quality metrics: total reading time, active days, and the number of articles read per logged-in user.
- For the most part, Bonnier doesn’t believe in algorithms and personalisation. Its editored packaging increases reader engagement and focuses on prolonging the shelf life of great stories and repackaging them for discovery.
- Bonnier just bought its own train, putting journalism on rails. The company is upselling in new market areas. Readers buy tickets on the train and get lectures from our journalists and editors.
Final words on churn
When it comes to the link between engagement and churn, Jönsson said the largest part of Bonnier’s base are people who have been subscribers for several years. The company doesn’t look at average churn rate but breaks it down into different audience segments.
“We have to change, or otherwise we will die,” Jönsson concluded. “Time is on our side.”
How Business Insider gets to 1 billion unique views
Selma Stern, senior vice president of consumer subscriptions at Business Insider, detailed for INMA audiences BI’s prime subscription product, which has only been around about two years — but with extremely ambitious growth targets.
“We’re one of the most widely read news brands,” Stern said. “In only 13 years, we’ve seen very fast growth so far.”
The consumer subscriptions business launched in November 2017 and has exceeded expectations. As a result, Stern and her colleagues have set ambitious growth targets to achieve in five years:
- 1,000 journalists.
- 1 million subscribers.
- 1 billion uniques.
Why this is doable
“It’s been said over and over that a certain way to consume news was gone and has been proven wrong,” Stern said. “If you really want to read or watch or listen to something and you can’t get it for free, you will pay for it. It’s as simple as that.”
The team conducted subscriber surveys, asking why they had subscribed. They were given several options, along with an “other” category with comments. One of the most surprising things was that fully one-quarter of the respondents checked the “other” box, listing their own reasons for subscribing.
“Many of those responses were because they wanted to read a specific article, it was largely about content,” Stern said. The main drivers behind that were that the content is useful, and/or it’s reader friendly.
“The reason I think our subscription business works is the very same reason why we’re getting traffic: it’s very user friendly. I think we’re making it as easy as possible for our readers to consume complex information.”
Our editorial mantra: SCHAFFFF
This odd and lengthy acronym is one that Business Insider lives by: Smart, Conversational, Helpful, Accurate, Fast, Fair, Fearless, and Fun.
“This has been working very well,” Stern said. “Our growth strategy is journalism-focused, data-informed, and experiment-driven, in that order.”
- Newsroom: hire writers and editors, vertical by vertical.
- Analytics: build hypotheses based on subscription data. For example, special offers when engagement drops, or upgrade offers to engaged subscribers.
- Optimisation: test new hypotheses and implement them.
She also shared how Business Insider measures the impact of this strategy:
- Newsroom: +112% story output.
- Analytics: +141% ARR.
- Optimisation: +121% active subscriptions.
“I would argue that digital subscriptions are actually a much better business model [than print],” Stern said. Economically, it has a much lower unit cost, and requires less working capital in equipment (printing plants versus servers). On the negative side, it also has low barriers to entry (meaning more competition) and a high level of complexity, though she sees the low barrier to entry going away slowly.
“I think the major issue that we’re all grappling with is the issue of complexity in our business. This presents both a challenge and opportunity for us all.”
The main issues her team thinks about every day is, what analysis should they do next, and what A/B test do they do next? “We are building dedicated teams of writers and editors for new verticals, product managers and engineers for each major challenge, acquisition and retention specialists, and industry sales experts.”
In closing, she mentioned three key points:
- Our product needs to be useful for our readers.
- We have only scratched the surface of data and analytics.
- There is no silver bullet, so we need to test every hypothesis.
The Media Subscriptions Summit continues on Friday.