Get people to subscribe using behavioural economics theories

By Greg Piechota


Oxford, United Kingdom


Today, I am reflecting on the legacy of the father of behavioural economics and diving into the new data on performance of annual subscription contracts.

If you have questions or suggestions, e-mail me at or meet me at the INMA World Congress of News Media in London next week.

Behavioural science: How to nudge people to subscribe to online news

A modern subscription marketer’s playbook — with price anchors, trials, and win-back tactics — is part of the legacy of Professor Daniel Kahneman, who died in March at the age of 90.

This Nobel Prize-winning Israeli psychologist revealed the limits of human reason and laid the foundation for the field of behavioural economics studying instincts. 

Kahneman’s work with Amos Tversky upended classical economic assumptions of human rationality in decision-making as they identified common mental shortcuts, or “heuristics,” that lead to predictable errors.

  • Framing effects: making different choices based on how options are presented.

  • Anchoring: over-relying on initial information when making estimates.

  • Endowment effect and loss aversion: feeling losses more intensely than equivalent gains.

From theory to practice: As these instinctive behaviours are common and repeatable, they can be prompted or triggered. 

This makes the behavioural economics theory inspiring and applicable, for example, for marketers trying to influence decisions of consumers.

Here are examples from the communications I collected in the past few months:

  • Framing by The New York Times: When presenting a subscription price as US$1/week, The Times makes it sound more affordable than US$4 every four weeks or US$208 every 12 months.

  • Anchoring by France’s Le Figaro: With the product line of three options, Le Figaro nudges consumers to choose the middle “recommended” option, which is rich but less expensive than the “premium” option.

  • Endowment effect and loss aversion as used by the Financial Times in the U.K.: During the cancellation flow, the FT reminds the reader what she would miss out on — from coverage on Russia’s and China’s next moves, the most-read stories of the day, to her favourite reads on fashion. 

Kahneman’s best-selling popular book Thinking, Fast and Slow, published in 2011, described these heuristics and some others, such as the power of social proof (e.g., “Join over 1 million subscribers”). 

He also warned: “We are prone to overestimate how much we understand about the world and to underestimate the role of chance in events.”

Scientific revolutions: During my last Easter holiday, I returned to Kahneman’s classic book and read it alongside a new biography of a Renaissance astronomer Nicolaus Copernicus, Revolutions, by Wojciech Orlinski. 

While the two scientists studied different domains and at different times, their discoveries transformed our understanding of the world.

Copernicus proposed that the Earth revolves around the Sun, rather than vice versa. This challenged centuries of orthodox belief which placed Earth at the centre of the universe.

Similarly, Kahneman challenged classic assumptions in economics that portrayed humans as rational agents who consistently make optimal choices that maximise their benefit.

The analogy has limits. Copernicus’ theory sparked a fierce resistance from the Church and was slow to gain acceptance, while behavioural economics has gained ground quickly, with the Nobel Prize awarded to Kahneman in 2002.

Kahneman’s book is a masterpiece, but practitioners may prefer more actionable textbooks by the professor’s disciples, such as Nancy Harbut’s Using Behavioural Science in Marketing, published in 2022.

Interested in practical lessons from behavioural economists? Join our virtual Subscriber Retention Master Class in June.

New data: How contract length drives retention and subscriber lifetime value

Subscribers on annual plans retain at double the rates of subscribers on monthly plans, and the gap widens over time, found Piano.

By the third year, an average annual subscription is 60% more valuable than an average monthly subscription. 

Katelyn Belyus, vice president/strategy and analytics at Piano, presented the results of five years of observations involving 400+ clients in February at the recent INMA Media Subscription Summit in New York.

The findings highlight the significant impact of contract length on retention and lifetime value in the news media industry. 

Executives can leverage the insights to optimise their strategy — focus on acquiring and retaining annual subscribers by making annual offers more prominent and attractive (e.g., discounted vs. monthly offers).

Executives might also use the figures mentioned in this article for benchmarking, revenue forecasting, and budgeting.

Annual vs. monthly retention rates: Out of newly acquired subscribers, after the first year a median client of Piano retains 70% of those on annual contracts and 34% of those on monthly contracts.

After the second year, the gap grows — a median publisher retains 52% of annual customers and 22% of monthly customers. 

After the third year, the gap almost triples — a median site retains 40% of annual subscribers and only 15% of monthly subscribers.

As a result, an average three-year lifetime value for an annual subscriber is 60% higher than for a monthly subscriber: US$154 vs. US$96.

Comparison to the INMA benchmarks: Piano clients’ benchmarks ring true, as the values are similar to the INMA Subscription Benchmarks, which are based on data volunteered by 234 news brands worldwide.

The median survival rate after the first three years of a digital-only subscription stands at 18.5% industry-wide. This is a retention rate modelled based on average monthly churn rates in 4Q 2023. 

The best 25% brands retain at least 42% subscribers after three years.

The median three-year average digital-only subscription lifetime value was US$162, and that was modelled based on average monthly revenue per subscription and adjusted for the differences in purchasing power between countries. 

The best 25% saw a lifetime value of at least US$224.

Previous research by Northwestern University in the United States found regularity of consumption is the best predictor for retention.

Several factors may contribute to the differences in retention rates between annual and monthly subscribers, including pre-purchase awareness and commitment, individual price sensitivity, and onboarding activities.

Interested in benchmarking with INMA? Watch my presentation and e-mail me to schedule a private demonstration.

About this newsletter

Today’s newsletter is written by Grzegorz “Greg” Piechota, INMA’s researcher-in-residence and lead for the Readers First Initiative. In his newsletters, Greg shares original research, analysis, and best practices in growing reader revenue.

E-mail Greg at, message him on Slack, or meet him in person at the INMA World Congress of News Media in London next week.

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