The epicenter of news media’s digital subscription revolution is Scandinavia, for which the recent INMA Media Viking Week Study Tour to Stockholm and Oslo bore witness. We got some unique insights on what can be learned by fellow INMA members versus what is unique to local culture.

Here is what I saw:

1. The moment of liftoff: While freemium models existed for a few tabloid popular newspapers for a decade (known in Scandinavia as the “plus model”), the real takeoff in digital subscriptions occurred across most media companies in early 2015. 
2. What caused the big bang: This occurred for at least three reasons: the collective weight of advertising trends forcing a shift in focus to consumer revenue, a willingness to plunge further behind paywalls with competitors, and the emergence of simplifying one-click technology. 
3. Culture: What we see now are corporate cultures rallying around this takeoff, notably the refocusing of newsrooms, the emergence of KPIs and content scoring, and a healthy obsession about the science behind subscription triggers. 
4. Get better: In each country, there is a willingness to share best practices among competitors and peers, get more accustomed to the economics of content, and better understand the new art and science of digital subscriptions. 

The core trend internationally in digital subscriptions is the shift away from the metered model and toward data-fueled freemium and hybrid models — notably in Europe and the South Pacific. 

To be clear, the freemium, or “plus,” model, involves a free and open Web site or app with premium articles locked by editors exclusively for subscribers.

Freemium models have gone in vogue, out of vogue, and now back in vogue. The freemium model five years ago faltered at many news organisations because editors were using gut instincts to decide which articles to lock.

Using old print mentalities, they would lock articles for reasons entirely divorced from consumer behaviour. For example, articles would be locked because the company spent a lot of time and money on the article. Or an article would be locked because the editor felt it met some vague notion of “quality.” 

Fast-forward to 2017, and the freemium model has become fashionable again in much of Europe and the South Pacific — yet this time, armed with rich data analytics and internal content scoring systems that deeply inform editors of propensities to trigger subscriptions or to be shared on social media.

Here is a quick snapshot of key lessons surrounding digital subscriptions during our Swedish and Norwegian stops, notably the role of algorithms, locked articles and subscription triggers, and Dagens Nyheter’s focus on micro-segments. 

The role of algorithms 

As my recent 37-day trip built in the South Pacific and Latin America, the enthusiasm behind the role of algorithms seemed to rise. Publishers are playing around with their own ways to score content, and seemingly every visit got me closer to someone acknowledging algorithms could build home pages and conduct editorial prioritisation tasks better than human beings. 

This hit a crescendo in Scandinavia with Schibsted Sweden’s quality news brand, Svenska Dagbladet, whose home page has been driven by algorithm the past 2.5 years and editorial responsibilities focused on these functions re-distributed (not cut).

Svenska Dagbladet believes its competitive advantages include data and algorithms. The company prioritises content on the home page based on two factors: news value and lifetime value. It is experimenting with different home pages for different people at different times of the day.

Yet the study tour’s twist came in a candid session in Oslo with Adam Kinney, head of data science for Schibsted, who poured cold water on the notion of algorithms replacing human editorial functions anytime soon.

Joining Schibsted two years ago after a stint at Twitter, he was convinced that an algorithm could be written that could prioritise stories and structure the digital ecosystem. Two years later, he confessed he was wrong. If he had it to do over again, he would encourage data scientists to spend more time with editors to understand the nuances of editorial decision-making.

Ultimately, algorithms today should deeply inform human editors — not replace their functions. 

Locked articles and subscription triggers 

We got an interesting snapshot of what triggers digital subscriptions and the article locks being put in place to aid those triggers.

The percentage of articles locked by editors, either in a hybrid or freemium model, seems to range from 30% for Dagens Nyheter to 40%-60% across Amedia’s community titles.

In 2013, Schibsted adopted a hybrid meter/freemium model for its quality newspaper, Aftenposten: 10 articles per device per month, traffic from Facebook was free, and 5%-10% of content was locked. Four years later, Aftenposten has tightened its hybrid model: six articles per device per month and 35% of content is locked while Facebook traffic is subject to meter/freemium rules. 

In terms of what genre of articles are getting locked, the Swedish national daily Dagens Nyheter reports investigative journalism, long-form quality stories, opinion pieces, high-propensity social share stories, and stories that improve your life.

Norwegian national daily Aftenposten is constantly experimenting with different tactics. Staff lowered its meter on election day recently — only to raise it the day after the election and trigger a high number of subscriptions. This feels like a global best-practice. 

Across its 63 community titles in Norway and three years of experience, Amedia believes priority triggers are content related to transportation/commuting, health care and social, crime/police/legal, real estate, and accidents/incidents. Surprisingly, the lowest levels of subscription triggers are culture, politics, and football/sports.

National news, Amedia executives warn, does not fit well in local newspapers unless there is a local angle — and that is even more important in digital than print. The days of local “newspapers of record” covering the country and world are long gone, and trying to do so diminishes the local news brand’s USPs. 

Live-steam video has been crucial to triggering subscription sales and activating print subscribers at Amedia’s community titles. For example, Amedia streams live 1,500+ second- and third-division Norwegian football matches — often with a single camera, occasionally with cameras in the goals. They are not BBC quality, but they are “good enough.” Some 95% of video is behind a subscription layer.

Dagens Nyheter’s micro-segments

Despite its quick success in digital subscriptions, Dagens Nyheter faced rising subscriber churn: 11%-15% per month as late as March 2017.

Yet a chance encounter with an Israeli entrepreneur helped turn around fortunes, and SparkBeyond helped infuse Dagens Nyheter with artificial intelligence (AI) and machine learning solutions that identified patterns — to a level whereby they can identify within 86% accuracy who will likely churn. 

Dagens Nyheter has since shifted from broad segmentation to micro-segmentation. 

Some of those drivers are obvious: monthly reminders and telemarketing are bad, for example. Some of those drivers are simply informational: channels, pricing offers, and payment genres are churn keys.

Yet the level of sophistication is rising every day, with a real-time dashboard based on the most important drivers that Dagens Nyheter can take action on every day. Today, Dagens Nyheter has 250 micro-segments it is managing, and management suspects this will rise to more than 1,000 within a year. 

The news media company is taking a chapter from telecommunication companies, cable operators, and utility companies that are most successful in managing micro-segments. 

Conclusion

What I heard over and over is that the key to Swedish and Norwegian success on digital subscriptions is “focus.” Unbundling that word, I would observe it is about getting the newsroom to own the subscription business and driving the KPIs around subscription triggers. It is about a healthy obsession with the economics of content.

Editorial may not follow business management historically, but business management will absolutely follow editorial because it is the cultural center of every media house.

Case in point: Peter Wolodarski is the 39-year-old chief editor of Dagens Nyheter. I met Peter at the INMA World Congress of News Media three years ago in San Francisco. Today — as chief editor — he is in charge of Dagens Nyheter’s digital subscription business.

As he walked the INMA group to the heart of his newsroom, he talked with passion about the value of content — what drives brand, what drives eyeballs, what drives subscriptions. He talked about changing the newsroom culture to rally behind new KPIs. There may be others, but he is the first chief editor I have met worldwide who truly owns digital subscriptions, and that is nothing short of a cultural revolution.

Culture is what separates Scandinavian publishers from the rest of the world in digital subscription success.

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