NZ Herald outperforms global industry leaders in digital subscriptions

By Grzegorz Piechota

INMA

Oxford, United Kingdom

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At the end of August, or 16 months after the launch of a digital subscription product, New Zealand Herald had 82,000 premium digital customers, including 43,000 digital-only subscribers. 

In a country of less than five million, NZ Herald reaches 1.7 million users monthly. It’s one of the top-five most popular Web sites, according to SimilarWeb, competing with Google, YouTube, Facebook, and Stuff, another New Zealand publisher. 

This head-to-head competition between NZ Herald and Stuff delayed the shift to reader revenue. “The two companies feared that if one of them would introduce paid content, the other one would reap the benefits and gain in traffic,” explained Merja Myllylahti, a researcher with Auckland University of Technology and INMA blogger

“We were unsure there was a first mover advantage,” admitted Matt Wilson, chief operations officer at New Zealand Media and Entertainment, the NZ Herald’s publishing company, in an interview with INMA. 

Yet, in just 16 months since the launch, the subscriber penetration rate — counted as a proportion of all users who were paid customers in a month — reached almost 5%. 

It is higher than the 3% enjoyed by the industry leaders, such as The New York Times (after nine years) and higher than the industry benchmarks of 2%-4% based on studies by FTI Consulting and Mather Economics. 

“In hindsight, we were lucky to launch late. We learned a lot from publishers around the world,” Wilson said.

Herald executives interviewed by INMA recalled the initial reaction from the market was positive: “Most people said: ‘It was about time.’” 

Fearing readers might object to paying for Web site content that used to be free and remained full of ads, NZ Herald focused on improving quality of its journalism.

The paywall launch re-energised the newsroom to do investigations on public health, rankings of politicians and businessmen, and in-depth features on tragedies and disasters. “We believe people subscribe primarily for journalism,” said Carolyn Adams, business manager/customer. 

NZ Herald followed a freemium model for its paywall, with 15%-20% daily output being locked. The premium offer includes also access to syndicated stories from The New York Times and The Financial Times, crosswords and puzzles. 

NZ Herald enjoyed a spike in online subscription sales after the COVID-19 broke, up to 400% up versus the period before the pandemic, but it dropped quickly, as the secluded country opened up sooner than the rest of the world. 

Other acquisition tactics included:

  • Subscriber-only competitions, e.g., one for sports fans that sent two to London for the Cricket World Cup boosted the week’s sales 660%.
  • Group discounts that attracted some corporate customers.
  • And premium subscription gifts for Christmas that pleased individuals. 

NZ Herald chose to grant digital access to all of its nearly 80,000 print subscribers, and it succeeded in activating 50% of them. 

This is a great result. In a 2019 study of the U.S. metropolitan newspapers, FTI Consulting saw the print subscriber activation rates ranging from 13% to 63%, with a median of 42%.

According to FTI’s Pete Doucette, “Digital activation is the first step in preparing print subscribers for a potential digital-first future with digital-only or digital-plus-Sunday-print options.” 

Earlier this year across the Tasman Sea, in Australia, News Corp stopped printing more than 100 regional and community titles and moved them to a digital-only format. There was a stark difference in conversion rates between readers who used the digital product before the closure and those who had not. At last week’s INMA meet-up, News Corp’s Brendan Collogan said 82% of digitally activated subscribers stayed versus 20% of the print-only readers. 

How did NZ Herald get its print subscribers to unlock the paywall? It communicated the new product with a front-page wrap, an onboarding section, e-mail campaigns, and even a letter of support from a New York Times’ executive.

Digital activation, despite being free, had an immediate impact on the business, too — it helped reduce print subscription churn by 14%. 

Carolyn Adams of NZ Herald is one of the speakers at the upcoming INMA Subscriber Acquisition Masterclass starting on October 6. Other experts will share best practices from The Atlantic, Media24, Mediahuis, The Wall Street Journal, and The Washington Post. Don’t miss their proven strategies and tactics to drive traffic and conversions. Register today.

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