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Research shows the most convincing subscription pitches, why young readers pay

By Greg Piechota

INMA

Oxford, United Kingdom

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In this newsletter, I am analysing new research about subscription pitches, demystifying attitudes of young audiences toward paying for news, and strategising around target segments.

If you have questions or suggestions, e-mail me today at greg.piechota@inma.org or meet in person at INMA Media Innovation Week in September in Antwerp, Belgium.

The most convincing subscription pitches refer to journalism and the industry crisis

If you want to convince readers to pay for online news, tell them how their money supports good journalism and be honest about your financial situation, researchers from Munich, Germany, recommend.

“Understand what your audience wants, offer something thats hard to get for free elsewhere, and keep your pitches simple and focused,” said Dr. Bartosz Wilczek, one of the study authors, in an interview with INMA.

Academics of Ludwig Maximilian University aimed to find out what kind of marketing messages make people want to subscribe to online news. Over 800 U.K. news consumers were shown different subscription pitches and then asked how much theyd pay for a subscription.

Brand-neutral paywall pages were used to focus solely on the effect of the messaging. Researchers also gathered information about news habits and personal details to control for other factors that might affect willingness to pay, such as age, education, or wealth.

Taxonomy: Academics from Munich tested four types of appeals:

  • Digital-specific appeals: These spotlighted the unique benefits of online subscriptions, such as personalised content or online-first delivery.

  • Social appeals: These emphasised that reading helps create new relationships and engage with the readers’ community.

  • Normative appeals: These aimed to convince potential subscribers that their contribution sustained independent, inclusive, and watchdog journalism.

  • Price transparency appeals: These disclosed information about the industry’s critical financial situation and reasons for the implementation of a paywall, hoping readers perceive the pricing fair.

Results: The study found single types of subscription pitches dont really convince people to pay more for online news. 

But, when you combine the normative appeal (telling people their subscription will support quality journalism) with price transparency (explaining the tough financial situation of the news industry), people become more willing to pay.

Adding digital-specific or social appeal to the mix didn’t really help. “Perhaps, the longer and more complex the pitch, the less effective it becomes,” explained Dr. Wilczek.

Additionally, older readers and those who often accessed news on mobile were found more likely to pay. Gender, education, monthly income, and how often someone checked the news on the desktop didn’t really make a difference. 

Other studies: Across countries surveyed by Oxford’s Reuters Institute in 2023, the most frequently stated reason to subscribe for online news is to get access to better quality or more distinctive journalism (on average, 51% payers said it; 48% in the U.K.).

The second reason is identification with the brand and its journalists (44% in the U.K.). Other popular motivations were to help fund good journalism (29%), games and other member benefits, along with a convenient user experience for the Web site and app (21%).

These motivations vary across markets and individual brands. At a 2021 INMA master class, the Institute’s Nic Newman revealed, for example, that among subscribers to The Washington Post 72% paid primarily to help fund good journalism. In the case of The Wall Street Journal, only 39% of subscribers were similarly motivated, and 56% paid simply for better quality or distinctive content.

In the interview, Dr. Wilczek acknowledged the differences and recommended publishers test different appeals to find which ones work for specific brand and reader segments: “Test the combinations and not only individual pitches,” he advised.

The market ceiling: In 2023, Reuters Institute asked the non-payers (on average, 83% of news consumers across markets) what might persuade them to pay: 32% said cheaper or more flexible payment options, 22% said more valuable content, and 13% said an ad-free experience. 

Interestingly, only 42% of non-payers declared nothing could persuade them to pay. Assuming the rest could be persuaded somehow, news publishers theoretically have a shot at quadrupling the number of payers (from an international average of 17% today to 65% of news consumers).

Interested in marketing beyond the core readership? Read my 2021 report Light Readers: Digital Subscriptions’ Next Growth Path.

Young readers pay for online news but not for traditional sources

Most U.S. Millennials and Gen Z audiences are paying for news, but they are twice as likely to pay for or donate to e-mail newsletters, video blogs, or audio podcasts from independent creators than pay for newspapers in print or digital.

This is based on the latest data by the American Press Institute, broadly supported by surveys of Oxford’s Reuters Institute.

Reuters Institute’s 2023 survey across 46 markets found that, on average, 19% news consumers aged 18-24 and 25-34 paid for online news at least once in the past year. 

This is actually a higher proportion than older generations — only 16% of 35- to 44-year-old consumers paid for online news, 14% of 45- to 54-year-olds, and 13% of those aged 55 and older.

In the United States, per the 2023 API survey, 51% of Gen Z (16- to 24-year-olds) pay for or donate to news, either online, or broadcast, or in print. 

The number rises to 63% among younger Millennials (25- to 31-year-olds) and to 67% among older Millennials (32- to 40-year olds).

Problem definition: As the latest data shows, the challenge is not to get young readers to pay for any news, as they already do, but rather to get them to value traditional sources more, such as digital newspapers. 

API found people younger than 40 are more than twice as likely to pay for or donate to e-mail newsletters, video, or audio content from independent creators (47%) than to print or digital newspapers (22%).

Reuters Institute saw an average age of a digital newspaper subscriber to be almost 50.

Media CEOs treat diversifying audiences as one of their firms’ strategic challenges and debated the best practices at the recent INMA World Congress of News Media in New York.

CEOs heard that traditional brands can learn from the independent creators about, for example:

  • Perceived higher authenticity of individual voices vs. institutional voices. 

  • Rising preference for audiovisual formats vs. text.

  • Or flexible ways individuals support creators, through recurring or one-time payments vs. subscription-only.

How to respond to this strategic challenge?

Theory: Marketing theory and studies suggest publishers should consider the risks of moving into new products and into new markets, e.g., products tailored to the needs of Gen Z.

In brief, the further a firm moves away from the core, the higher the risk due to the uncertainties about the unfamiliar segments, and new resources and competencies required to serve them.

In his 1957 Harvard Business Review article Strategies for Diversification, Igor Ansoff introduced the idea that the riskiest growth strategy is diversification, which involves both targeting new markets with new products. 

In his 2004 book Beyond the Core, Chris Zook suggested firms can minimise the risk by moving into adjacent areas, which are closely related to the core business. 

In case of news and younger audiences, this less risky way would prioritise investment in, for example, the closest adjacent segment to the current subscriber base (the 40-49 age group) or the near-core segment (the 30-39 age group), rather than the far-core segments (those aged 29 and younger). 

The near adjacencies are less risky because the needs of 30-49 age groups are likely similar to the current subscriber base, and the publisher’s content and formats require less adaptation. 

These readers also likely are familiar with the brand, access news through established channels, react positively to similar advertising, and show a comparable willingness to pay. 

These shared attributes help maintain manageable acquisition and retention costs.

Practice: The review of INMA case studies suggests news publishers usually target the far-core segments, taking on more risk and cost.

From January 2022 to June 2023, INMA published 59 articles featuring 56 unique examples of brands trying to understand, attract, engage, and monetise younger audiences.

We identified the articles based on keywords, and then we used a generative AI tool, OpenAI’s GPT-4 model, to extract the information on targeted segments. AI succeeded in 43 cases.

  • In 35 or 82% cases, brands targeted users aged 29 or younger.

  • Specifically, in 13 or 30% cases, they targeted users aged 19 or younger.

  • Only in eight or 18% cases, the target age group was 30-year-old or older.

Counterargument: Although marketing theory and studies imply moving far away from the core increases risk, they also suggest that with calculated risks, clear strategies, and leveraging existing strengths, companies can successfully diversify and expand.

For example, at the June 2023 INMA Subscription Growth Master Class, Swedish regional group NWT presented how it grew the volume of digital subscribers by 33%, while reducing the average age by 3.5 years in 2022. 

It succeeded with a combination of tailored content, distribution, pricing and promotion, all managed by agile, cross-disciplinary teams.

Interested in learning more about Gen Z? Download the 2022 INMA report What Gen Z + Media Need From Each Other by Paula Felps.

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 letters, Greg shares original research, analysis, and best practices in growing reader revenue.

E-mail Greg at greg.piechota@inma.org, message him on Slack, meet him at the next online meet-up or in person at the INMA Media Innovation Week in September in Antwerp, Belgium.

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