One of the biggest questions for news media companies in the next year is balancing the growth in volume with the growth in overall revenue.
“That’s the super essential question,” Kaisa Aalto, subscription business owner for Helsingin Sanomat in Finland, said during the recent INMA Media Subscriptions Town Hall. “Becoming independent of print revenue — i.e., having enough digital subscribers to maintain our journalistic operation — that is our North Star goal. We have a certain number of subscriptions with a certain average revenue per user (ARPU) that we need for that. That has been our goal and that’s the number we are after.”
Balancing volume vs. revenue
Like many news media companies today, Helsingin Sanomat wrestles with the challenge of keeping the right number of subscribers at the right price. Earlier this year, it put both its digital subscription options side-by-side on the paywall, clearly spotlighting the differences in Digi, its lower-cost option, and the more robust Digi Plus.
“That really boosted the sales this year,” Aalto said. “So far we have sold 60,000 more digital-only subscribers this year than the year before. And our digital-only subscriber base has grown 11%.”
Most of the growth has been driven by the cheaper product, she said, which has grown by 76% while the more expensive version grew by just 3%.
“So, the cheaper offering drives the subscription growth in two ways, both the sales value and the retention. It has a better retention.”
But, as the cheaper product becomes more popular, Aalto said it has caused concerns about revenue generation.
“Should we actually sell less subscriptions to maintain the higher ARPU and will we need more subscriptions than previously predicted if the existing base starts to switch to the cheaper category? And is the productisation strategy working as expected and modelled? Now it’s heated discussion around this.”
However, ultimately it is better to have more subscribers who have entered at the lower price and then be able to sell to them: “Then it’s easier to raise the price, for example, or develop the more expensive offering to be worth the price,” Aalto said, noting that bundling could offer another way to boost the ARPU. “But I think it’s essential to have those subscribers [first] and then you can think [through] the rest.”
An audience poll by INMA Readers First Initiative Lead Greg Piechota showed that INMA members are wrestling with prioritising volume or revenue, with 52% saying both goals are important, 24% saying they would focus on revenue, and 22% choosing volume as the most important priority.
The power of bundling
Koen Meeusen, sales director/B2C for Mediahuis in Belgium, shared how the company is leveraging bundling to boost subscriptions. With four brands under its umbrella, Mediahuis created a new value proposition for customers.
“The promise was very simple: If you are subscribed to one brand, from now on, you get access to all the other brands. That was our promise,” Meeusen explained.
The four brands complement one another, making them attractive to users and immediately successful.
“When we launched it a year ago, 50% of all our subscribers activated this feature,” he said. Of those activated, 60% use the feature, and a recent survey showed almost 40% of readers consider this a reason not to cancel their subscription.
“We sold more than 4,000 subscribers using this as a theme in the campaign, Meeusen said, “So it really was a success.”
In addition to being successful as a retention tool, Meeusen said it is used as an upsell mechanism.
“Our basic product was just access to one site that doesn’t have this feature or the other more expensive subscriptions,” he said. “So what we did is we launched an upsell campaign to the basic ones, and we had a conversion of like 15%, 20% of people that called and took this more expensive subscription. So we are very pleased with that.”
To further its appeal to new audiences, Mediahuis is looking at other ways to reach them and drive conversions. One such tool is the recent purchase of an app for walking, hiking, and biking. The app already sells subscriptions and has a solid subscription base. In the future it could be used as an incentive to purchase access to other types of content, Meeusen said.
“We bought this kind of app because we conducted some research amongst our subscribers and on top of the list [was], ‘Well, we are really into hiking and biking,’” he explained. “Maybe this could be the next model, like bundling not only news brands together, but also adding other extras like The New York Times does with cooking and puzzles. That’s what we’re looking into as well.”
What’s next in 2024 for both media companies
With so many important global events unfolding over the next 12 months, both media companies are looking at how to strategically benefit from new users and retain them.
As seen during COVID-19, the Trump elections, and the war in Ukraine, subscribers who jump on during big events tend to churn more quickly. In response, Meeusen said Mediahuis will likely change its acquisition strategy.
“We now offer what we call promo deals,” he said, explaining a one-year contract that offers a 50% price reduction but doesn’t allow the subscriber to pause the contract. While that flies in the face of practices from subscription companies like Spotify and Netflix, Meeusen said it has helped Mediahuis avoid churn.
“But, of course, in years like next year when you have these specific events, people could join us for a smaller time per year,” he said. “We’ll probably adapt our acquisition strategy a little bit and make sure that people who just want to subscribe for one or two months will have nice offers as well.”
Aalto, looking at a busy year with elections in Finland, the EU Parliament, Russia, and the United States, said Helsingin Sanomat will probably run special campaigns for young people and new subscribers.
“I see these political events or elections like excellent retention boosters for our existing subscribers,” she said. “So when we show that we cover these really well from different angles and we are on top of these stories, then it’s a good booster to existing subscribers that they should stay with us.”