Payment failures cost news media thousands of subscribers every year. Publishers could try harder to save them, an analysis of six months of payment data from MPP Global reveals.

Up to one-third of subscribers in the media and entertainment sectors churn every year due to the payment failures — and not because they wanted to leave. Publishers call this phenomenon involuntary, or passive churn. The reasons for the payment failures range from subscribers forgetting to update card details, to lost or stolen cards, bank rejections, network errors, or subscribers exceeding credit limit. 

“Many of those subscribers could be saved. Publishers are not using retry tooling aggressively enough,” said Julian Morelis, chief commercial officer at MPP Global, a subscription and billing software vendor. 

At INMA’s request, MPP Global analysed six months of payment data by 13 millions subscribers to some of the world’s leading video streaming services, as well as news and magazine media publishers.

The analysis found 64% of those subscribers paid with credit cards or PayPal, the two methods for which payment success can be improved with retries after the first failed attempt.

Retry tools are less useful with other popular payment methods, such as direct debit or carrier billing, in which the payment is not authorised in real time and is always successful.

• In the first six months of 2020, retries saved on average 4.5% of subscriptions to video streaming services but only 0.7% of subscriptions to publishing sites.
• If we annualise the rates, broadcasters might save 53% subscribers at risk of passive churn and publishers — just 8.6%.
• The average number of retries required for success was similar in both media sectors — 3.4-4.4.

Broadcasters try much harder to save their subscribers and set the maximum number of retries to 13.2 on average, while publishers set the maximum at merely 2.6 on average.

That makes a huge difference, as in the first six months of 2020, it took up to 16 attempts to get a successful renewal once the 1^st attempt failed, MPP Global found.

Julian Morelis offered an advice to the INMA members: “For maximum performance, you should set retry count to at least 15 and allow grace access over a similar number of days.”

A recent poll of participants of the INMA Master Class on Digital Subscriber Retention showed almost half, or 44% of publishers, set the grace period at 14 days or fewer, which might have been too short to successfully save the subscribers.

When The Daily Telegraph in the UK surveyed its churned subscribers, it found more than half did not even realise there were any issues with payment. They never wanted to cancel. 

Banner photo courtesy of rupixen.com on Unsplash.

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