The pandemic-driven subscription surge and the rise of segmented approaches to audience management are driving new urgency for sharper pricing strategies by media companies as markets emerge from the worst of COVID-19, according to a new report released today by the International News Media Association (INMA).
“Subscription Pricing: From COVID Bump to Sustainable Revenue” dives into why pricing is so important, why it’s so difficult, and who is doing it well today.
“Pricing is the fastest and most effective way for media businesses to increase profits,” says INMA Researcher-in-Residence Greg Piechota. Yet while some media companies are well into prioritising their pricing strategy, many do not yet have a road map in place. The good news is this: Most of the media industry learned in 2020 how important a pricing strategy is.
Dawn McMullan, senior editor at INMA and lead author on the report, talked to Piechota, as well as pricing experts from FTI Consulting, Mather Economics, and Piano. Case studies from Denník N in Slovakia, The Boston Globe in the United States, Politiken in Denmark, Amedia in Norway, and Malaysiakini in Malaysia also share current success stories about subscription pricing.
Key takeaways from the INMA report include:
- Charging your more engaged customers more over time, the “revenue maximising journey,” is generally accepted as a best practice.
- A digital subscriptions strategy means volume first (which COVID gifted the news industry), pricing second. Yet smart pricing is key to both acquisition and retention.
- Data, not gut feelings, must guide pricing strategy.
- Most media companies are not competing with The New York Times or Netflix, so prices shouldn’t be based on those subscription models.
- Media companies can’t switch print readers who were paying US$40+ per month to digital readers paying US$10 per month. Those prices need to get closer.
- Research shows what price change individual customers will tolerate.
- Customer lifetime value (CLTV) is a key factor when determining pricing strategies.
The goal with all of this: establish a business model based on a direct reader relationship that sustains journalism.
“Subscription Pricing: From COVID Bump to Sustainable Revenue” is free to INMA members and available for purchase by non-members. For complete information and to download or purchase, click here.
The International News Media Association (INMA) is a global community of market-leading news media companies reinventing how they engage audiences and grow revenue in a multi-platform environment. The INMA community consists of more than 16,000 members at 890 media companies in 70+ countries. INMA is the news media industry’s foremost ideas-sharing network with members connected via conferences, reports, Webinars, virtual meetings, an unparalleled archive of best practices, and strategic initiatives focused on digital subscriptions, smart data, and product.