Any case study about digital subscriptions must include a pricing strategy. On Tuesday, INMA members at the Media Subscriptions Summit 4.0 heard three.
In 2016, Politiken in had a three-year-old digital subscription product priced at €10 per month. The company had about 100,000 subscribers, 5% of what it estimated its broadest potential target group could be in the country that, at the time, had 5.7 million people.
Astrid Hald Jørgensen, commercial director at Politiken, said the company had two options to ensure both growth and a sound digital transformation:
- Aim for an “unrealistic” tripling or quadrupling of subscribers.
- Change the price point.
Politiken increased the cost of its digital subscription from €10 to €40 per month.
One tool Politiken has leveraged to justify its price increase and ensure the digital transition continues smoothly has been a professionalised customer journey. This meant getting data in the right place, making AI models on both list pricing, campaign pricing, as well as on churn prediction, and making people work together, Jørgensen said.
These efforts have paid off: subscription revenue has risen 8.4%, and 2020 had the best revenue result in the company’s 136 year history. Politiken is now at a sustainable 80/20 subscriptions/advertising revenue split.
The Boston Globe (United States)
After launching Globe digital in October 2011, The Boston Globe has experimented with numerous different business models and made a major shift in acquisition strategy in mid-2019. By November of that year, digital subscriptions surpassed print subscriptions for the first time. It took the Globe more than seven years to get its first 100,000 digital subscribers — but less than a year to get the next 100,000.
“We knew our future was going to be with paid subscriptions and not with an ad model,” Tom Brown, senior director of consumer revenue, said at the Summit. “It was really kind of a mantra from leadership down that we are worth US$0.99 a day, and we have to believe that if we want our subscribers to believe it.”
In response to this realisation, the Globe changed its pricing structure in mid-2015, raising subscription prices from US$3.99 per week to US$6.93.
Jump ahead to mid-2019 and the news media company is focused on a longer-commitment subscription game: 80% of new subscriptions have been on a six-to-nine month intro offer. Volume growth began a sharp acceleration in mid-2019 and continued through the beginning of 2020.
When COVID hit, 95% of Globe digital revenue came from subscribers, not from advertising. The company continued with a previously successful US$1 for six months paid trial and it worked: “We experienced a sharp increase in acquisitions, and we actually hit our year-end goal in the first quarter [of 2020].”
When the CEO of 22-year-old publication Malaysiakini set a goal that subscriptions must account for at least 50% of the company’s revenue, the company had to experiment wildly on both the content and business sides, Lynn D’Cruz, chief membership officer, told INMA members.
Malaysiakini started producing more feature and human interest stories behind the paywall. Though there is no data at the moment, D’Cruz said this move is making a difference.
“We believe that these stories are definitely impacting revenue,” she said.
With mentorship from advisors, including from INMA’s researcher-in-residence Greg Piechota, Malaysiakini has revamped its pricing page and purchase process. The company was making quite a few mistakes that probably confused customers, D’Cruz said. There were too many price choices, too many steps in the payment flow, and not enough visibility of membership privileges.
Now with a new pricing page, readers know the minimum price immediately. A monthly price list for each package highlights the three-year option as the best value, and payment happens in a three-step system. Data collection happens after the purchase is complete.
These changes have had a huge impact. Malaysiakini saw revenue increase more than 70% last year, and saw a 64% increase in subscribers.
The Summit wraps up on Thursday. You can register here to watch live or at your leisure.