Research: Fastest-growing news brands experienced a 49% growth rate
Conference Blog | 22 July 2024
In INMA Researcher-in-Residence Greg Piechota’s interactions with news media leaders, the question of how fast they can grow is a recurring theme. As leader of the Reader’s First Initiative, he has talked with brands around the world to find that answer.
Using data collected from 234 news brands worldwide, he revealed to attendees of the recent INMA Latin-American Conference that the fastest-growing brands experienced a 49% growth rate, while slow growers saw a 1% decline.
“Interestingly, this is not about news cycle, this is not about more people coming to Web sites,” he said, explaining that fast growers actually experienced lower traffic than others but had tighter paywalls.
“The result of that is many more subscription starts. So with a smaller audience and tighter paywalls, they converted more people and increased the sales by 62%.”
Meanwhile, companies with good engagement that didn’t tighten their paywalls sold fewer subscriptions. The fast growers, however, experienced a trade-off: higher churn.
“There’s never just success without a price,” Piechota said.
Piechota explained the concept of the “cyclone,” a strategy in which publishers immediately offer an attractive subscription deal to Web site visitors, then work to engage them after they subscribe. This approach is based on the idea that people learn the value of journalism after they try it, and those who use the product are more willing to renew their subscriptions and accept higher prices over time.
“A trial is not only about showing people the value but actually teaching them about the product. So this education drives future demand,” he said. “This is what actually helps in later retention.”
The trade-offs of this growth strategy, he said, are higher churn rates and lower average revenue per user (ARPU), as a large volume of new subscribers are attracted through promotions. Despite these challenges, the revenue of the fastest-growing news publishers also grew faster than those who grew moderately.
Piechota emphasised the importance of having a robust engagement programme for subscribers as well as a simple, attractive offer to make it easier for people to decide on purchases.
“What’s your onboarding? How do you nurture value over the lifecycle of the subscriber? How do you prevent them from churning? This needs to be in place before you start giving discounts because without retention, it won’t give you the results that you’re looking for.”
News media organisations face a challenge when it comes to increasing volume. Brands’ current subscription rates are less than 1%. And to attract the remaining 99%, they need to identify and market to new segments beyond their heavy users. These include casual readers who engage with content sporadically or due to specific interests like sports or cooking.
“We need to identify these new segments and adjust the value proposition,” Piechota said. “We have our product and we need to basically start marketing to them.”
One way to do that is through bundling, which increases the value proposition by offering more than just news. Many news brands are creating bundles that include access to multiple products such as national and local news, podcasts, videos, language courses, and fewer ads.
The larger the bundle, the more likely it is to succeed, as it can cater to a wider range of interests.
“So it’s like with cable: It makes sense to have very many channels in the cable industry and it makes a sense for news publishers to have many different verticals, very different magazines and products included in the bundle because this basically is allowing you to capture more people with the same price,” Piechota said.
Bundles have delivered promising results, with up to 53% of the subscriber base ready to upgrade. Users of multiple products tend to be more engaged, visit more often, pay more, and have lower churn rates. However, it is not without challenges, including the need for a portfolio of brands, alignment around strategy, and technological reforms to centralise marketing operations and recognise subscribers across different Web sites.
The biggest challenge is ensuring subscribers can discover content from different products, which is where many companies fall short. In many cases, bundles are launched with an e-mail newsletter that announces the brands and provides links, but Piechota said that isn’t enough.
“You actually need to have a mechanism to help people discover content from different products,” he said, mentioning aggregator apps and recommendations on different Web sites to shift people between different brands and different apps.
“Without it, unfortunately, people churn because they bought something but they’re not using it.”