Evolving a media company’s subscription strategy can have an unexpected impact on internal culture, two executives shared at the end of day one at the INMA Media Subscriptions Summit.
For many media companies, it is an accepted fact that change is needed to stop the revenue loss from the decline of advertising revenue. This acceptance pushed the staff at Dagens Nyheter to reach out to at venture capitalist Michael Moritz for advice.
Moritz looked bored as he listed to the company’s situation, Peter Wolodarski, the company’s editor-in-chief, said. When they finished an outline of the company’s issues, they asked Moritz what he thought.
“He said: ‘I can hear you’re busy dying,’” Wolodarski said.
Hearing their situation phrased so bluntly was the push they needed to make dramatic changes. Moritz recommended they meet with Klarna, a Swedish bank that provides online financial services in Stockholm to evaluate subscription strategy.
The Klarna team evaluated their log-in process and pointed out the inherent barrier it created for potential customers.
“You are losing so many potential subs by having these hurdles in the sign-up process,” they told Wolodarski. Creating a friction-free subscription process became a high priority at Dagens Nyheter.
For Helsingin Sanomat, the catalyst for change was just as jarring. The company examined its situation after a restructuring in 2015, Petteri Putkiranta, president of the company, told the London audience. In the previous two years, its core audience had aged three years. This was the wake-up call the company needed.
“And clearly it called for a completely different strategy,” Putkiranta said.
It was clear the company needed a business model change. The first step in this change was research on what younger audiences find valuable so they can attract the next generation of readers — without offering a discount. Encouraging digital activity was another major goal for long-term success.
“It really didn’t make sense to get the sort of subscribers who didn’t use the content,” Putkiranta said.
Part of the company’s efforts to increase value is a focus on its premium content, marked by a diamond symbol to represent subscriber-only content. The decision to use a diamond symbol came from the need to embody value in a quickly recognisable way.
“It’s because we couldn’t invent a short word for quality journalism,” Putkiranta said.
Marking premium content gave the company create more specific understanding of how users interact with content. Understanding digital activity is crucial, Putkiranta said, because digital activity is closely linked with churn. Creating goals and targets around digital activity was actually challenging, he added.
“It was actually quite painful to figure out simple measurable targets,” he said.
After a lot of iteration, the team chose to use audience conversion to trial and the number of digital active subscriptions as two common goals for both the editorial and commercial teams.
Creating these goals became a crucial tool for culture change, Putkiranta said. Suddenly, the editorial and commercial teams were interested in how they could change their strategies to meet these goals.
”Strategy doesn’t work if you don’t execute it and execute throughout the organisation” Putkiranta said.
For Dagens Nyheter, the first effort to creating change was redesigning a one-click subscription solution with Klarna lead to a significant increase in members, but this brought more churn as well.
“In the spring of 2017 it actually reached 15%, which is not a sustainable level,” Wolodarski said.
The company partnered with Israeli technology company Spark Beyond to hold an internal hackathon and address the churn issue.
The result was a research engine that identified more than 200 features that explain the company’s churn. With this data, Dagens Nyheter was able to create a churn model that predicts potential churn with up to 86% accuracy. The model offers actionable changes the team can make every day to lower churn.
What followed were internal changes to support the model. Short daily stand-up check-in meetings helped the company create a “cross-functional war room” and a mode of continuous problem-solving.
At first, the staff viewed this as a short-term project and asked when they would return to “normal,” Wolodarski said.
“We are not ‘returning to normal’” he said. “This is normal. This is the new normal. This is how we are going to develop our subscription business.”
This “data project” really became an organisational project, Wolodarski said: “And I think this change in the organisation was probably the most important thing that came out of the project with the Israelis.”
To date, the company has seen a churn reduction of more than 28%. It is a complete turn-around from the beginning of the company’s journey.
“I think it’s fair to say we are busy growing,” Wolodarski said.