Today’s newspaper and magazine publishers face significant headwinds from declining revenues and diminishing value propositions. COVID-19 has only accelerated and amplified these sweeping industry-wide challenges. As such, publishers have been forced to recalibrate their strategies in search of a sustainable business model.
Having led some of the world’s most innovative news organisations and advised hundreds of publishers across the world, we have determined that a viable publishing business is rooted in a strong digital subscriber base.
As the past few years have shown, advertising revenue can be unpredictable. And an ad-centric model exposes publishers to the risks of both market conditions and a broad competitive ecosystem. Alternatively, recurring subscriber revenues provide publishers with a more stable, and often higher margin, financial profile.
That’s why we are excited to explore the digital subscription strategies critical to successful business model transformations for publishers.
Recently, as part of the GNI North America Subscriptions Lab, we partnered with 10 local news publishers to guide them through reader revenue models and share digital subscription best practices.
Publishers in the Lab achieved digital subscription growth that was nearly double the industry average. Through a series of tactics, these publishers improved paywall conversion rates, increased the size of their subscriber base while simultaneously increasing price, and grew average revenue per user (ARPU) by 24%.
Most importantly, these publishers put in place the necessary people, processes, and technology improvements to create a sustainable and continuous “reader revenue machine.”
Successes like those of publishers who participated in the GNI North America Subscriptions Lab have been built on our 7-Lever Digital Subscription Transformation framework. We will explore each of these levers in depth with specific industry case studies and publisher best practices in the coming months. For now, here is an overview of that framework.
- Strategic direction: What are you trying to accomplish? A defined and well communicated subscription model strategy allows the organisation to effectively prioritise alignment with strategic objectives, increase the efficiency and effectiveness of resources, and invest in key growth areas to maximise market potential.
- Organisational alignment: Is there top-down buy-in from your organisation? Complete buy-in from the executive suite to the newsroom is imperative to successfully implementing your digital subscription strategy. With everyone working toward the same goal, organisations achieve quicker and better results and can adapt to unforeseen challenges.
- Print vs. digital relationship: How can you digitally activate current print subscribers? Most subscribers consume content in both the analogue and digital worlds. Publishers are encouraged to take the long view of digital transformation and prepare in earnest today for the possibility of an all-digital world. Proactively managing the digital migration of print subscribers can potentially allow publishers to maximise both short-term cash and long-term digital consumer market potential.
- Customer experience (CX) and value proposition: What about your product offering is approachable, unique, and relevant? Subscription model success is predicated on having premium products that provide consumers a compelling customer experience and value proposition. For publishers, dynamic and relevant content are table stakes for acquiring and retaining subscribers. But in many ways, how that content is distributed, delivered, and experienced by consumers is equally as important.
- Digital audience management: How do you engage potential and current subscribers to maximise monetisation and retention? Implementing the right paywall that creates the proper balance between sampling and paywall stops will maximise a publisher’s digital conversion potential. Once converted, coordinated management of a publisher’s digital audience across key segments over time will maximise the revenue potential of digital news consumers.
- Marketing and pricing: How can you use marketing and pricing strategies to acquire and maximise the value of subscribers? The marketing engine drives the subscription business through efficient subscriber acquisition at scale, engagement, and customer loyalty. Simultaneously, pricing strategies are used to refine acquisition pricing and offers, and determine long-term pricing for tenured subscribers. Working together, marketing and pricing enable organisations to manage ARPU to drive revenue and profitability.
- Data and technology stack: What technology is needed to acquire, engage, analyse, monetise, and retain subscribers? Technology is the foundation on which the future subscription business is built. Technology enables the digital consumption experience for news consumers. It is both the sales channel as well as the distribution network. It enables you to unlock unlimited insight potential from studying consumer behaviour in ways that didn’t exist in print. But it is also a challenge to capture, house, and leverage the overwhelming amounts of data.
While each of these individual levers is important, each must be working in harmony to maximise this framework’s potential. This can be tricky but extremely powerful when effectively executed. That is why over the coming months we will dive deep into these levers and provide you with the tools to implement them comprehensively within your organisation.