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Why “sleepers” are the biggest risk to your subscription business

By Greg Piechota

INMA

Oxford, United Kingdom

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

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ENGAGEMENT. Nearly half of news subscribers are inactive. How to break the spell and wake up the “sleepers”?

An inconvenient truth

Almost half of news subscribers globally, or 39%, haven’t visited the news company’s Web site in a month. These subscribers are most likely to churn, posing the single biggest risk to digital reader revenue.

This insight is based on the January data of 320 subscription news sites across the world and comes from Piano, their subscription software vendor.

Other studies confirm. For example, Northwestern University in Chicago analysed engagement data of 45 local news outlets in the United States and found the proportion of sleepers was even higher than globally — 49%.

Sleepers are at high risk of cancellation. According to Piano, almost two-thirds of inactive subscribers are gone within 12 months since falling asleep. One-third churn in the first three months!

Inactivity of such a large number of subscribers poses the single biggest threat to publishers’ reader revenue. High churn rates are also likely to suppress growth, as publishers might lose subscribers as quickly as they acquire them. Engaging sleepers should be a priority.

Psychology of activation

Some call the inactive subscribers “zombies.” I prefer the term “sleepers,” as I imagine these customers as “sleeping beauties” from the old European folk tales or the more recent Disney’s musicals. As you might remember, the sleeping princess is waiting for a kiss that would break the spell. Better to kiss than to kill, don’t you agree?

After a review of academic literature and studies on consumer behaviour, I would like to propose a systemic, science-based approach to analyse this problem and evaluate solutions.

  • Firstly, I break down a news customer value chain (a metaphor I used in a book with Harvard Professor Thales Teixeira as an alternative to funnels) into stages that include: trial use, conversion, post-purchase use, and retention. 

  • Secondly, based on subscriber behaviour modelling, I argue that decisions on both conversion and retention are likely outcomes of the readers’ decisions to use the product. The caveat is though that for some readers, usage is not the reason to subscribe and does not create value.

  • Thirdly, I use a behaviour model by a renowned Stanford University researcher BJ Fogg to map the initiatives publishers may wish to consider to nudge a behaviour change of inactive subscribers.

Value of engagement

In general, studies find usage is the best predictor for conversion and retention. Readers who visit the news site for a long time, frequently, spending a lot of time engaging with content are the most likely to subscribe and the least likely to churn.

In the real world though, the heavy readers are the minority, and most conversions come from light readers. 

According to the analysis by Michael Silberman of Piano, heavy readers help to kickstart paywalls. But in the first year of a subscription programme, their proportion among new converters goes down to 19%. In comparison, 37% of new subscribers at the time convert on their first active day in a given month.

If it was not the decision to try the content that made them buy, what was it?

Journalism as a service

In the past years, many news publishers shifted their marketing strategies to promote journalism as a service instead of access to content. Campaigns, such as “Truth is Hard” by The New York Times, saw great success in attracting new subscribers. 

Membership models, which don’t restrict access and emphasise consumers’ identity or moral duty to pay for online news, proliferated globally. My studies show they gained share in reader revenue models across 33 countries from 1% in 2018 to 12% in 2020. 

A review of Oxford’s Reuters Institute surveys confirms the proportion of people who paid for online news to help fund journalism increased from 13% in 2017 to 52% in the United States and 39% in the UK in 2020. 

An unintended consequence is news publishers might have broken the connection in the customer value chain between the decisions to buy and to use the product. Some readers are happy to support journalism as a worthy cause but they don’t feel an urge to read.

Waking up sleepers

“For a behaviour to occur,” Stanford’s BJ Fogg explains in his 2019 book Tiny Habits, “three elements must converge at the same moment: motivation, ability, and prompt.” Let’s consider each.

• Motivation: News publishers may wish to study motivations to buy and to use products separately.

Interviews, surveys, and data analytics might help to segment readers and inform engagement strategies — shaping unique on-boarding sequences for identity or cause-driven subscribers, for example.

Light-reading subscribers tend also to have different interests than heavy-reading subscribers, as The Wall Street Journal found in its content review

In particular, many subscribers might access news sites for reasons other than to see the news — to be entertained, to find something to talk about with friends, or to distract themselves, for example. Did you know that more than 28 million readers played one of The New York Times’ games last year? 

• Ability: Publishers may wish to adapt their promotion and distribution strategies to continuously refresh consumer memories and get noticed when the casual readers might need journalism.

Broad distribution via search, social, and aggregators — the spaces where casual readers spend a lot of time — might help remind them about content they already paid for. In general, psychology studies find recognition (aided awareness) is easier than recall (unaided).

Casual readers often live their lives without thinking about news, yet they mobilise when big news breaks — such as the COVID pandemic or the U.S. elections in 2020. Therefore, advertising activity might be stronger around those events to fully exploit the opportunities high-interest events bring.

Longer trials or contracts, e.g., six to 12 months, might also provide publishers longer runways to engage casual readers across different news lifecycles. 

• Prompt: Publishers should not just wait for sleepers to visit but rather actively push content.

The priority is to establish communication channels: sign new subscribers up for e-mail newsletters, nudge them to download apps and allow push notifications in the Web browsers and on mobile.

Segmentation unlocks more relevant recommendations: While only a few publishers have tools to personalise feeds to each and every reader, most can differentiate at least some channels, such as e-mails, for groups of readers.

The Holy Grail of engagement

The objective of all those tactics is to help readers form a habit of reading. Habits simplify our lives, automating decision-making on repeated activities.

In general, forming a new habit is difficult.

  • Habits take time: Researchers of University College London found it takes an average 66 days of daily repetition to adopt a new behaviour. Depending on the type of the behaviour, the actual range was between 18 and 254 days. This insight, potentially, has implications for how long publishers’ onboarding initiatives or trials should be — the more times a reader gets nudged, the higher chance she repeats reading enough to integrate the news site into her daily life.

  • Study existing habits: Instead of forming a new habit, publishers might wish to piggyback on the habits readers already demonstrate. For example, newsletters work so brilliantly because they inject prompts to read articles into the existing strong habit of checking e-mail — 89% U.S. adults check e-mail every day, and 58% do it first thing in the morning, before they log in to social media or news sites.

  • Build upon familiarity: Researchers at the University of Southern California discovered habits remain strong thanks to consistency and familiarity of the behaviour’s context — place, time, environment, presence of others, etc. Change these circumstances, and the habit might break. This could explain why news publishers, such as The Straits Times, see digital replicas of print newspapers enjoy high engagement from former print subscribers or why daily podcasts flourish by fitting into people’s daily routines, such as commutes to work or home chores.

If you want to learn how other publishers wake up sleepers, register to the INMA Digital Subscriber Retention Master Class on April 13-27. Agenda includes experts from Bonnier in Sweden, News UK, and Nine in Australia.

About this newsletter

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

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