News publishers should expand revenue strategy beyond subscribers to casual readers

By Dominic Young


Clapton, England, United Kingdom


When it became clear over a decade ago that advertising alone could not sustain the news industry, news publishers increasingly turned to subscriptions. Now we need to look beyond subscriptions to other reader revenue approaches which address the needs of more of the audience and a wider range of publications.

In the noughties, I was in a strategy role at NewsCorp and had long been concerned about advertising’s dependability as a single digital revenue stream. The move to subscriptions, derided by some, was one I strongly supported, and we’ve seen many stand-out successes driven by subscription models.

When I crunched the numbers, though, I had concerns. The marginal revenues of a subscriber were fantastic, but how many of our readers — especially the mass market readers of tabloid newspapers — would we persuade to subscribe?

Our modelling suggested we might achieve a few hundred thousand digital subscribers, but it was hard to imagine converting the millions of buyers our mass-market titles were reaching at the time.

Managing the plateau problem

The plateau problem has proved to be the Achilles heel of subscriptions: At some point, subscriber growth slows and then stalls. For many news publications, this happens at around 2% or 3% of readership. Once there, things get tough. Replacing or retaining cancelling subscribers, especially in tough economic times for readers, takes expensive incentives which can depress ARPU over time.

For many titles, subscription is a non-starter. Populist, mass-market brands addressing a broader and less affluent audience, for example, struggle to get formal commitment from their readers at any price.

The time is right to look beyond subscriptions in the search for reader revenue. The 90%+ who aren’t subscribing are your opportunity, they’re the great untapped footfall walking past your product on the digital high street daily.

Discount commitment, not prices

Right now, the most common way to acquire subscribers is with price discounts. Deep discounts help keep subscriber numbers high, but conversion rates to high-value, long-term customers are tiny.

How about discounting commitment instead?

Most would-be customers are, just as in the days of print, casual readers. They like and even love your product and come back to it often. But they aren’t willing to commit to monthly payments. Paying casually — the equivalent of a cover price for a day’s access or even just for single articles — fits much better with their behaviour.

You can test this assertion yourself. Are you ever frustrated by paywalls? Don’t want to subscribe, but do want to read things sometimes?  What happens if someone shares an article with you, but you’re blocked from reading it? I have yet to meet anyone who, as a customer, would not welcome the option of casual payment for the digital publications they are locked out of.

Providing customers with alternatives to traditional subscriptions could help expand revenue streams.
Providing customers with alternatives to traditional subscriptions could help expand revenue streams.

The lucrative nature of casual readers

Enabling casual payment means you can transact with more of the crowd outside your paywall and start charging for products that are ill-suited to subscription.

It also links the frequency of reading to revenue. Newsletters, notifications, and other nudges can bring occasional readers back more often, paying a small amount whenever they do.

You can sell frequent visitors a full-priced subscription; it saves them money and locks in their commitment.

Some of them will turn you down. Some people will choose the flexibility of casual purchase over the formality of a subscription, even if it costs them more. We’ve seen this at Axate. We’ve even emailed readers to point out that they could save money by subscribing, but they have opted to keep spending more money casually.

Most people are never-subscribers. They only read a few articles a month, they’re already subscribing to something else, they are careful how they spend their money, or they just don’t like having many subscriptions.  If their only option is to subscribe, they won’t be your customer. Letting them buy when it suits them makes much more sense for them and you.

The potential of churned users 

With cancellations on the rise, retaining churning users is becoming more expensive and less effective.

Most subscribers must like your product, so when they cancel is it your content or your business model they’re rejecting?

Churned and churning users stand to become your easiest source of growth. Offering continued access on terms which suit them works better than locking them out. Some publishers have more churned subscribers, historically, than active ones. They represent a deep pool of opportunity.

Reasons to be cheerful

If you’re worried about subscriber numbers, I hope this article sparks your optimism. Thinking about paying customers instead of just subscribers opens huge new opportunities.

For me, it has always been simple: If we think about customers and design a product and pricing model that works to deliver their needs better, we’ll end up with a lot more customers. The 98% who don’t transact right now offer some rich pickings.

That’s not to say there’s anything wrong with subscription for those it suits, but it shouldn’t remain the only option because there are so many customers and publishers for whom it doesn’t work.

This thinking led me to build Axate, which lets publishers offer any combination of casual payments, registrations, contributions, and subscriptions to suit their audiences and themselves.

There are millions of untapped customers out there, lots them frustrated to be crowded just paywalls. If you can knock that wall down to size, more of them will come inside and start spending money.

About Dominic Young

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