Greetings from Oxford! This is Readers First, a newsletter for INMA members on reader revenue innovation. I am INMA’s researcher-in-residence. E-mail me at: email@example.com
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ENGAGEMENT AND SUBSCRIPTION BENCHMARKS: Comparing peers in the Americas and Europe
How engaging is your news site? How many users have signed up for e-mail newsletters? How many users did you convert into subscribers? What is the average revenue per user?
Last week, Google released a number of benchmarks based on studies by FTI Consulting, FT Strategies, and Mather Economics, consultancies working with news publishers in the Americas and Europe. INMA partnering with FT Strategies for the GNI Subscriptions Lab in Europe.
The consultancies identified common metrics for online engagement and subscriptions, providing averages for the companies in their labs:
- FTI Consulting worked with 10 companies in the United States and Canada, mostly publishers of metropolitan daily newspapers, e.g., Baltimore Sun, Houston Chronicle or Toronto Star.
- FT Strategies is working with eight publishers across eight European markets, both regional and national, e.g., El Mundo in Spain, Rheinische Post in Germany, or The Independent in the UK.
- Mather Economics worked with eight brands across Latin America, mostly metropolitan or national, e.g., Clarin in Argentina, El Espectador in Colombia or Reforma in Mexico.
Google sponsored a number of other initiatives, such as audience development labs or membership-focused programmes, with other partners. It summarised the findings in an interactive playbook.
The playbook includes tools, such as user funnel diagnostic, that allows publishers to see how they are performing across engagement and subscription metrics vs. the peers participating in Google programmes.
- Successful access models differ throughout the world, and Europe has been found to present greater diversity and maturity of markets than the Americas.
- Performance does not correlate with resources: Smaller publishers often outdo bigger ones if they are focused and agile.
- Digital subscription growth is hindered by four common blockers: poor internal alignment around reader revenue, insufficient knowledge of readers’ segments and needs, lack of focus and prioritisation of initiatives, data and tech stack missing customer-centric view or testing tools.
Together with Google and FT Strategies, INMA plans to organise an open town hall in November to summarise the winning strategies observed in Europe.
FROM PRINT TO DIGITAL: In a faraway country, NZ Herald outperforms global industry leaders in subscriptions
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.
About this newsletter
Today’s newsletter is written by Grzegorz (Greg) Piechota, researcher-in-residence at INMA, based in Oxford, England. Here I share results of my original research, notes from interviews with news publishers, and reflections on my readings. Previous editions are archived online.
This newsletter is a public face of a revenue and media subscriptions initiative by INMA, outlined here. E-mail me at firstname.lastname@example.org with thoughts, suggestions, and questions. Sign up to our Slack channel.