There’s a common perception about how digital subscription offerings develop.

Most industry watchers guess new subscription offerings take off quickly in the initial stages, as all of the most loyal users sign up. After that excitement, though, they expect growth to level off and signing up additional users to be difficult.

After all, once you convert the converted, who is left? It’s no wonder subscription organisations are told to anticipate an exciting growth curve followed by a plateau. And companies launching new subscription offerings pay extra attention to their early acquisition numbers.

Witness how intently we’re all watching the launches of Apple News Plus and Disney Plus play out, regardless of the fact acquisition curves started slowly for companies like The New York Times, Spotify, Netflix, The Guardian, and Hulu. Yet we will all rush to judge the eventual chance of success of these new businesses based only on their first days.

Meanwhile, because Piano is a company working daily with hundreds of media providers, we have a pretty clear idea of how those businesses trend — across traditional media, digital media, and broadcast. We put millions of offers to subscribe in front of users every day.

And it turns out, what most people expect is precisely wrong. Here’s why.

The launch

Publishers always ask what percentage of their unique users will convert to subscription. The problem is when it comes to subscriptions, the unique user number is almost totally irrelevant.

As I pointed out in my last INMA blog post, thinking about converting from that pool is a bit like asking, “If I open an Italian restaurant in New York, what percentage of New Yorkers will show up?” One number is too big to be successfully correlated to the other. If 80% of your users bounce, you can’t really think of them as subscriber candidates; you’ll only convert from your pool of loyal users.

But even savvy publishers who look at their loyal audiences as a fixed pool of users to convert from are making a mistake, because the group of users who are loyal changes every month.

Isn’t this what you experience in your own behaviour? Aren’t there sites you’re fond of that you might not have visited in 30 or 60 days? Is it unthinkable that, if they created a really great product that you want, you would consider subscribing even if you hadn’t visited recently?

This bears itself out in the data. For the most part, only loyal users convert, but, conversely, we are seeing more and more conversions from browsers we haven’t cookied in the last 90 days. And more than 70% of the devices we see that are in the “direct and dedicated” segment we use to measure overall loyalty were not in that segment in the prior month.

Rather than thinking a new offering will convert then subsequently run out of loyal users, publishers need to realise there are new loyal users for them to reach all the time.

When The New York Times reached one million subscribers, many people in the industry watched and said, “That’s great, but where will the next million come from?” They didn’t realise the huge number of unique browsers and the smaller number of loyal users at any given moment are both hiding a number in the middle: the number of users who know the site and who are considering a subscription, regardless of any one of their device’s visits in the last 30 days.

2000% growth makes everyone happy

Our theory at Piano is that, far from plateauing, publishers get better and better at acquiring subscribers over time. That’s because more and more users enter the consideration set and because publishers get better and better at converting them.

So we did the math to figure it out. We took a random sampling of our customers that have been in business between four and nine quarters, comparing their first two quarters with their last two. We found those with just a year behind them experienced increases of up to 50% in their average number of new monthly subscribers. And for those with nine quarters behind them, growth rates reached more than 2000% on average.

It turned out instead of the climb/plateau trajectory you might expect, media companies experienced dramatically higher subscriber acquisition each quarter, continually building their revenue growth.

And why wouldn’t they? As they get further and further into their subscription business, companies get better at what they’re doing. They hire more marketing people, refine their product offerings, and more closely align with the newsroom to produce more content that drives loyalty. All of these things are very different capabilities than what might have been required of them when they ran a traffic-focused, ad-supported business.

In short, they become subscription businesses. And at the same time, audiences start to recognise them as such, learning more about their offerings and ultimately making the choice to subscribe.

Or do little or nothing instead

There were some exceptions in our sample — some businesses even showed declines. But those were sites that didn’t evolve their product, didn’t test and learn, and didn’t cultivate internal talent. If you treat a subscription offering like a widget to put up and test — rather than an entirely new business to enter and a product to develop that is worth buying — well, the results reflect that approach.

Then there are other businesses that are taking a wait-and-see attitude and doing nothing while their competitors move ahead of them in learning from the market. There’s a saying I sometimes use when I’m talking to organisations at this stage: Sitting on the sidelines is indistinguishable from failure. Making the decision not to jump into the market because you’re waiting on an internal strategy review or an IT project means you’re putting off your opportunity to build revenue growth. Zero dollars in subscriptions this month, compounding zero dollars in subscriptions last month, doesn’t add up to much — no matter how sage it may seem to sit back and evaluate the market.

There is simply no substitute for in-market data. Post-launch, you can start tracking and actively growing your audience and revenue, testing and experimenting with your offers, and getting to know your user behaviour. You can contextualise your results against others in the market and better develop your team and site experience to beat that benchmark. And you can put all of the right technology in place to optimise your business model. All of this will help you grow those numbers faster and entice both new and loyal users to fall in love with your new product.

News media brands must align for success. A commitment to a new model is the first step.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .