Publishers delivering news through both print-only (or all-access) and digital-only products are facing the challenge of managing the transition toward a digitally dominant subscription economy.
Mather’s benchmarking database shows print volumes in the United States declined by ~16% during the past year, while digital volumes grew by ~18%. Given these trends, the average news publisher will have a majority digital-only subscriber base by the middle of this decade.
While the growth in digital subscriptions is encouraging, the reality facing publishers today is that the revenue contribution from print subscriptions far outweighs that of digital subscriptions. In fact, while digital subscribers make up 23% of overall subscriber volumes for the average publisher, only 11% of total revenue comes from this group.
We find that, on average, the average revenue per user (ARPU) of a digital subscriber is only one-third that of a print subscriber. Thus, the long-term sustainability of news publishers relies on the ability to intelligently manage the transition to a digital future.
In this blog post, we will briefly investigate the makeup of print to digital conversions, including how e-edition engagement is proving to be a leading indicator. We will also discuss some strategies for publishers to consider to preserve revenue on converted subscribers.
In an analysis with one of our publishing partners, we found that over the previous year, about 0.1% of the print subscriber base was converting to the digital-only product every month. This metric was in line with the average monthly conversion percentage within our benchmarking database, as illustrated in the image below. This implies that just over 1% of a publisher’s print subscriber base is converting to digital-only every year, on average.
The same analysis revealed the average rate of accounts that converted to digital went from a print rate of US$8.46 per week to a digital-only rate of US$1.41, resulting in an 83% cannibalisation of ARPU.
This indicated many of the conversions started on the digital product at a highly discounted introductory rate despite being tenured accounts, with a majority (58%) having five or more years of tenure with the market at the time of the conversion. Additionally, a plurality (48%) of the print-to-digital conversions migrated from a full, seven-day print schedule.
Beyond price, tenure, and frequency, print-to-digital conversions also exhibited interesting digital engagement attributes. We found, generally, that conversions were deeply engaged with digital content, exhibiting the highest levels of article pageviews and lowest levels of non-engagement in the last 30 days of any subscriber cohort analysed, including print-only, digital-only, and digital-to-print conversions.
Of particular interest is how print-to-digital conversions engaged with the e-edition in the period leading up to the conversion. As seen in the image below, conversions had the highest percentage of subscribers engaging with the e-edition of any cohort analysed at 23%, seven percentage points higher than the digital-only subscriber base at 15%.
Additionally, conversions had 2.5 times the number of pageviews on the tablet than digital-only subscribers and 45% more unique days engaged with the e-edition in the previous 30 days.
As we have seen, print-to-digital conversions have a unique makeup of attributes and engagement behaviours. In particular, our research indicates the hypothesis that print users view the e-edition as a bridge or gateway to adopting the digital-only product is correct.
Publishers can mitigate the rate cannibalisation from conversions by proactively offering digital packages to print users highly engaged with the e-edition that are higher than the introductory digital price. These offers can be prioritised to print users that have low or negative profitability, given their current rate and cost to serve.
Publishers can also implement application fees to dissuade customers from “promo jumping,” where subscribers routinely sign up for introductory rates and stop when the promotion period is over only to restart on a new promotion weeks or months later.