Attend any news industry conference these days, and stories abound at the fantastic results the big global players like The New York Times, Financial Times, The Wall Street Journal, and The Economist are reporting in digital subscriptions.
Yet dig a level deeper, and you find metropolitan dailies are struggling to find the correct formula for paid content. Dig even deeper, and community publishers simply can’t create the scale necessary to make digital subscriptions work.
During a recent visit to Norway, I found several groups that have defied these global trends. One such group is Norway’s No. 2 publisher, Amedia. I am pleased to present this story based on an INMA study tour visit to Amedia, an INMA conference presentation, and a meeting with Amedia CEO Are Stokstad.
Amedia was founded in 2012 from a merger between Norwegian community publishers A-Pressen and Edda Media. Today, the company consists of 63 local titles with an aggregate circulation of 511,000 and 1.9 million daily readers.
Titles range from daily to weekly, with the largest being the six-day-per-week Drammens Tidende — with 25,000+ circulation, four editors, 27 journalists, and 17 sales/administrative staff — and the smallest being Vesty Avis, a weekly 1,900-circulation newspaper south of Oslo with one editor, one part-time journalist, and one advertising sales rep.
In 2013, Amedia subscriptions were declining 8%-9% per year. Print advertising was declining 12% per year — then went further off the cliff in 2014-2015. Reach was insufficient across Amedia properties, and executives knew digital advertising revenue was unable to finance local journalism as they historically knew it.
In April 2014, Amedia put in place a two-phased plan:
- Conversion: The news media company aimed to convert 480,000 paying print subscribers to activate their digital subscriptions that came bundled with their offer. They wanted to build digital habits among readers, creating a future bulwark against the inevitable reduction in print frequency. And they wanted to reduce subscriber churn, which at the time was 9%.
- Growth: They wanted to sell new digital-only subscriptions, a new front for the company. And they wanted to reach new digital audiences.
Ultimately, Amedia aimed to move readers up the value chain from free registered users to paid subscribers to selling paid subscribers more things.
What came next was a massive mobilisation of 2,000+ Amedia employees throughout Norway:
- Technological: Systems, services, functionality, sales.
- Organisational: Work processes, sales processes, cooperation across functions.
- Cultural: Editorial, management, commercial, communications.
As Amedia editors toyed with the freemium structure, they moved the percentage of locked articles from 10% to between 40%-60% today. They continue to see value in free reach as their most important selling point to attract new subscribers.
As of late September 2017, Amedia had a logged-in paid relationship with 566,733 people, or 14% of Norwegians above the age of 15 — of whom 151,405 were pure digital subscribers. On the day Amedia shared this data with INMA, 334,017 people were consuming Amedia based on login data.
Once the principles of digital subscriptions became the norm throughout Amedia, the company launched into a series of trial-and-error experiments to see what triggered consumer action.
For example, they got interesting spikes when they locked articles about the financial performance of media companies. In November 2016, they got 4,600 subscriptions based on a Black Friday campaign. A January 2017 discount campaign (5 kr. for 5 weeks) triggered 20,000 subscriptions in 21 days.
Today, Amedia sells 650 subscriptions daily on average throughout Norway. Some 53 of its 63 markets are reporting subscription growth year on year — including Bergensavisen up 31% to 17,237, Fredriksstad Blad up 13% to 19,989, and even tiny Vestiy Avis up 20% to 2,974 subscribers.
Finnmark Dagblad recently crossed the threshold of having more digital subscribers than print subscribers, while Vestby Avis is now profitable before advertising (the historic Economist business model scaled to the smallest of weeklies).
Those deeply into the digital subscription game constantly bring up the “Netflix Line”: What rate does Netflix charge for its monthly subscription?
I remember the News Corp Australia executives cringing at my cringe when they told me they were charging about double the Australian Netflix rate of A$15 per month. Now, four weeks later, Amedia trots out that with a Netflix rate of about €8.50 per month, they charge between €16 and €25. They are aware of the Netflix Line, just as they are aware of international comparisons to global brands like the Financial Times.
Every company must find its price point versus value proposition, executives advise, and for this community publisher that means “local relevance” and “building local communities.” I cringed less hearing premium pricing a second time.
Even with this declaration, Amedia reports systematic testing of price sensitivity. The company has significantly ramped up analysis and insight, testing a lot more and making fewer decisions from gut feeling.
Amedia took INMA behind the scenes of how subscriptions are obtained and the evolution of preferred platforms.
At the beginning of its digital subscription journey three years ago, 25% of all new subscriptions were obtained via mobile device; today, that percentage is 55%. Some 87% of all subscription sales are done online. They have zero marketing budget and few salespeople — with telephone sales only triggered when someone cancels. With Norway’s average age being 43, 24% of all Amedia digital subscribers are under the age of 40.
The big question at Amedia, like other publishers with freemium models, is what triggers a digital subscription?
Executives caution there are large variations in consumption among content categories, and they emphasise results are from smaller Norwegian communities. Yet across its 63 titles 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. “Average” content categories for subscription triggers are schools, outdoors, travel, food, cars, curiosities, and finance/business. 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 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.
There have been affirmations and surprises in Amedia’s journey. Journalism they suspected was important turned out to be important. Yet content volume has reduced from 2,000 stories per day across its 63 titles to 1,750 articles per day — with no discernable impact on subscriptions.
Metrics are changing at Amedia. Gone are unique users per day and data not reported to local newsrooms. Instead, there is a focus on loyal non-subscribers. They want to exclude “fly-bys.” They want to focus less on viral content for fly-bys and instead prioritise what content matters to core subscribers. Fly-by stories encourage high churn and low sales; they prefer to filter out that content noise and focus on impact stories for their core audience.
We asked Amedia executives to outline some big lessons in their three-year digital subscription journey. Here is what they said:
- Put the reader first and adapt to reader needs. They had to re-discover the local value they provide.
- Delivering this value proposition trumps everything else.
- Digital subscriptions have to be prioritised to succeed. It can’t be one of many initiatives.
- Have clear goals, be willing to change, and have a consistent feedback loop.
- The value proposition must be continuously communicated.
- Don’t be afraid to change.
- The value for readers, ultimately, is about good journalism.
Amedia’s success behind a paywall is not unique to Norway. Schibsted and Polaris Media are experiencing similar results. Yet it is Amedia’s nearly 4-year-old company-wide cultural commitment that stands out — a healthy obsession. It is the persistent high regard for local media brands in the consumer’s mind that has helped foster this story. It is the entire news industry’s willingness to go behind a wall together and share best-practices that stands out internationally.