Hi! This is Readers First, a newsletter for INMA members on reader revenue innovation. I’m researcher-in-residence at INMA. E-mail me at: grzegorz.piechota@inma.org 

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1. STRATEGY: Sweden’s Expressen enjoys a delayed success with its paywall 

Since the launch of the paywall in December 2018, Sweden’s Expressen has grown from 0 to 90,000 digital subscribers. But why did it wait so long with this launch?

Last week, Sweden’s Expressen won the INMA Global Media Award for the Best New Digital Subscription Initiative and the Best in Show for Europe.

In the award application, it described a number of success factors for the launch:

• Cross-functional team: Representatives from editorial, analytics, tech, and commercial departments worked closely together before and after the launch of the paywall. The project was led by Johanna Odlander, head of Expressen Premium.
• Ambitious yet realistic goals: Based on the industry benchmarks and proven models of popular newspapers such as Bild in Germany and Dagbladet and VG in Norway, the team set goals and milestones and used data to make smarter decisions and prioritise efforts.
• Data democratisation and a bit of Slack policing: The data was made available to everyone in the newsroom and other departments in the form of dashboards and explanatory reports. Desks got their weekly conversion targets. Slack bot reminded managers every hour of how they were performing toward the target.
• Flexible paywall: Expressen chose a freemium model, in which 95% articles were free to all and 5% were exclusive to subscribers. An internally built tool let marketers experiment with unique paywall settings and messaging for each article or a campaign.
• Premium content: While any high-quality article could be locked, a dedicated team of premium editors produced a daily set of differentiated, worth-paying-for articles — investigative stories, profiles, guides, and advice columns. 

While award-winning, successful and inspiring, the story of Expressen’s paywall begs an explanation:

• Why did it launch as one of the last newspapers in Sweden? Sweden enjoys the second highest proportion of people paying for news in the world — in 2019, per the Oxford’s Reuters Institute, 27% of adults did pay.
• Why did it wait 15 years to catch up with its main competitor, Aftonbladet, that launched its paywall in 2003 and over years amassed an online subscriber base of more than 250,000?

Thomas Mattsson, former editor-in-chief of Expressen from 2009 to 2019 and now senior advisor at Bonnier News, mentioned the paywall plans to the trade press back in 2014, but the project was aborted.

“Timing was not right,” Mattsson said in an interview with INMA. “Expressen was a well-known national newspaper brand winning awards for its journalism, but our market share on mobile was at the time below 20% compared to our rival Aftonbladet. This position was too weak. We needed to gain traffic and reach before trying to convert visitors to paying customers.”

Over years, Expressen has focused on mobile content and distribution, growing reach across social media and launched live video news service called Expressen TV. Its “Traffic attack” project aimed at becoming Sweden’s biggest news publisher on owned and social platforms. By 2019, the Expressen’s market share on mobile compared to its arch-rival Aftonbladet grew to 49%. Per the company’s estimates, it reached every week 70% of the country’s 10-million-strong population. Mattsson: “We were ready.” 

Today, as many publishers across the world wander whether it’s the right time to finally launch a paywall, Mattsson offers this one piece of advice: “Do it only when you are confident… If your business and journalism is weak, then your paywall offering will be weak, too.” 

Depending on the market position, publishers might also entertain different strategies: “If you’re the market leader, you can enjoy the first mover’s advantage in digital subscriptions. But if you’re not the market leader, it might still be tempting to try and overtake your competitor [before you launch the paywall].”

The first step towards a successful online subscription project? “Recruit a good head of analytics, and give her or him great responsibility,” suggests Mattsson, whose old newsroom looks like wall-papered with screens showing data. To send a clear signal internally, Mattsson offered the Head of Marketing and Analytics Josefina Rickardt the room next to his office and added her name to the masthead. 

Check out other subscription projects awarded last week by INMA: The full list of winners contains links to award applications and presentations. 

2. NEW PRODUCTS: In the lockdown, Germany’s Handelsblatt is launching premium newsletters 

Working from home amid the COVID-19 pandemic, teams of the German business newspaper Handelsblatt launched two new premium newsletters, one on personal finance and another on the real estate business.

• The latest of the two, “Handelblatt Inside Real Estate”, was launched as a public beta last week and is available for an eight-week free trial.
• “Handelsblatt Inside Geldanlage” (“Inside Financial Investment”) launched in March. It costs Handelsblatt subscribers €4.90 extra per month. The price for non-subscribers: €29.90 monthly.
• The newspaper launched its first premium newsletter, “Handelsblatt Inside Digital Health,” in November 2019. The price: €14.90 for subscribers and €49.90 for non-subscribers.
• Handelsblatt is the fourth-biggest national daily newspaper in Germany, with a circulation of 87,000 in the first quarter of 2020. The cheapest digital subscription costs €29.99 monthly. The bundle that includes the print edition costs €45.99 monthly. 

“Handelsblatt is highly reputable in many business sectors, and the brand proved it can carry many products,” said Martin Dowideit, head of product, said in an interview with INMA.

The team chose digital health as the first in the product line, as it acknowledged digital disruption and new regulations re-shaping the healthcare industry.

According to Dowideit, the newsletter’s performance “exceeded” expectations set by the business plan, and it encouraged Handelsblatt to launch the next ones. While he did not share the exact numbers, he said most of the premium newsletter buyers were existing subscribers of Handelsblatt.

How new verticals are chosen? “It’s a combination of an educated guess based on our readership data and a feedback from the industry, as well as one-to-one interviews with potential subscribers,” Dowideit explained.

“The first question is: ‘Who.’ Find a segment of readers with deep pockets before you start thinking ‘What,’” he advised. “The second question is: How can you differentiate?”

Each segment Handelsblatt chose had been already served by a number of niche publications. How to be distinct? “We asked readers what they expect from us. For example, in case of the real estate newsletter, they wanted a bird’s eye view of the market trends, while other publications are focused on individual deals.”

E-mail newsletters proved to be both effective and efficient channels for new products, as well as easy and inexpensive compared to launching new Web sites or apps.

Up to 15 people from newsroom, product, and marketing departments were involved in each launch. The length of the process could be squeezed down to two weeks.

Each newsletter contains both original and exclusive stories as well as some resurfaced content from the newspaper. Each has an editorial team of three to five journalists plus the back office of two to three people.

The pandemic turned Germany and the world upside down, but it did not disrupt the development. People continued from homes connected on Slack and Microsoft Teams.

What’s next? “I am quite optimistic that our brand can accommodate more verticals,” said Dowideit.

He pointed to the example of Watch Medier, a subsidiary of Denmark’s biggest publisher JP/Politikens Hus. It runs 11 niche business verticals such as Shipping Watch or Clean Tech Watch, and charges up to €80 per month for access to each. 

Share your case study with INMA peers: What are you experimenting with? What have you learnt so far?E-mail me at: grzegorz.piechota@inma.org 

3. AUTOMATION: Editors and algorithms recommend different stories to readers 

Two Northwestern University researchers audited two Apple News sections: one curated by editors and one by an algorithm. Humans selected more stories on policy and international events, while machines featured more celebrities and entertainment.

• Jack Bandy, one of the authors of the academic paper scheduled to be published later in 2020, has popularised the findings in the Medium post last week.
• It’s the first data-backed analysis of Apple News editorial practice. The app has more than 125 million monthly active users, or about half of what Google News enjoys.
• Algorithmic curation of news feeds, home pages, or e-mail newsletters is increasingly adopted by news publishers, including the subscription leaders such as Aftenposten of Norway and The Times of London, that aim to offer more personalised and engaging experiences.
• The financial squeeze many publishers suffer from during the pandemic accelerates automation. For example, two weeks ago Microsoft sacked the editors curating home pages of the MSN Web site, planning to replace them with robots.

Academic researchers analysed 4,412 stories recommended over two months of 2019 by Apple News, of which one-third were “Top Stories” curated by human editors and the remaining were “Trending Stories” selected by an algorithm.

• Editors chose sources more evenly: While the app aggregates more than 80 news sources, the top 10 ones claimed 75% of all algorithmically curated Trending Stories. In contrast, the top ten sources chosen by human editors claimed only 56% of all Top Stories.
• Editors chose more diverse sources: Algorithms chose most often CNN, Fox News, People, and BuzzFeed, while human editors were choosing from a wider array of sources — for example, The Washington Post, NBC News, The New York Times or The Wall Street Journal.
• Editors chose less “soft news”: The headlines of the algorithmically selected Trending Stories were dominated by keywords such as “Donald Trump,” “Meghan Markle,” “Kate Middleton,” and “Justin Bieber.” The Top Stories chosen by humans most often mentioned in the headlines “hard news” keywords: “measles case,” “sanctuary cities,” “affordable care act,” or “New Zealand mosque.” 

In summary, automated curation generates different results than editorial one. Algorithms such as the one by Apple News optimise for engagement, while editors include other factors in their judgment such as the importance of news events or credibility of sources.

Automation brings risks but also benefits — for example, it frees time of journalists to focus on original reporting and analysis. It is required to personalise recommendations to make the news sites relevant to individual readers. Newsrooms have also the choice of which tasks to automate, and which not to.

As algorithms take over roles of editors, their designers become the new editors-in-chief. Newsroom leaders cannot outsource the job of setting the algorithms’ goals and rules to engineers. They may wish also to look for success criteria beyond engagement, for example, ensuring readers stay up-to-date with the current affairs or growing their knowledge about subjects of importance and interest. 

To automate or not to automate? Where do you stand? What are you working on?E-mail me at: grzegorz.piechota@inma.org 

About this newsletter

Today’s newsletter is written by Grzegorz (Greg) Piechota, Researcher-In-Residence at INMA, based in Oxford, England. Here I am share results of my original research, notes from interviews with news publishers, 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 grzegorz.piechota@inma.org with thoughts, suggestions, and questions. Sign up to our Slack channel.

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