Benchmarks show importance of news subscriber yield management

By Matthew Lulay

Mather Economics

Atlanta, Georgia, USA


By Matt Lindsay

Mather Economics

Atlanta, Georgia, USA


The recent report on pricing by INMA shared several case studies on smart pricing from publishers. With this in mind, here are a few other details on pricing strategies and tactics working well with print and digital subscribers.

Below, we also share benchmarks on subscription pricing from our database of more than 300 newspapers. These data come from many of the newspapers we help with subscription pricing and revenue optimisation. We will be releasing a quarterly industry report on subscriptions and audience revenue beginning this month.

Pricing strategies and tactics for digital and hybrid news products should reflect the important factors of the customer relationship.
Pricing strategies and tactics for digital and hybrid news products should reflect the important factors of the customer relationship.

The benchmarks

The average monthly price for newly acquired digital-only subscriptions is US$3.16 per month and US$15.79 for hybrid (print + digital) subscriptions. Digital-only new starts are 41.6% of total starts, and hybrid are the remaining 58.4%.

Across all subscribers, including newly acquired and existing subscribers, the average rate for digital-only subscriptions is US$9.50 per month and US$29.39 for hybrid subscriptions.

Weekly churn averages 0.98% per week for digital subscribers and 0.78% for hybrid. The difference in churn rates is due to the longer tenure of hybrid customers. Long-tenured customers, those with more than two years of active subscription life, tend to churn much less than customers in their first two years.

Hybrid customers are 80.5% of all subscribers and represent 93.5% of subscription revenue. Digital only are 19.52% of total paid subscriptions, which represents a 34% increase year-over-year (YOY). Digital only subscriptions are 6.5% of total subscription revenue, a 48% increase YOY.

Subscriber yield management innovation

Average monthly rates reflect the relative maturity of these products. Digital-only subscriptions have grown significantly in the past year due to COVID-19, the 2020 U.S. election cycle, California forest fires, and other big news events in 2020. We are seeing a softening of demand now that those events are behind us, and publishers are trying to retain and monetise their new digital subscribers to sustain growth in their digital audience revenue.

Pricing strategies and tactics for digital and hybrid news products should reflect the important factors of the customer relationship: the value proposition of the product to the customer, their tenure as a customer, their level of engagement, and their willingness and ability to pay for the product.

We have found common value propositions for subscriptions include:

  • Community: A desire to read about news in their local community they cannot find elsewhere.
  • Content: A desire to read specific content, such as coverage of a local sports team.
  • Cause: A desire to support local journalism. These customers will often subscribe but not remain actively engaged with the product.
  • Cost: They value the product and content but are price-sensitive customers, particularly at the point of initial subscription purchase.

We have tested a significant number of pricing tactics for acquisition, end-of-promotion offer increases, and annual increases for subscribers. A summary of a few of our recent observations and conclusions from pricing experiments are as follows:

  • Digital-only subscribers behave very similarly to hybrid subscribers with respect to price changes, particularly with annual increases to their rate.
  • High engagement does not translate into low renewal price elasticity. Often, very engaged customers will show higher price-related churn than the average level of engaged subscribers.
  • Moving customers from low acquisition offers to much higher basic rates, such as US$0.99 for six months to US$0.99 per day, is a challenging step to optimise due to the predictive modeling accuracy required. We have identified other tactics to help retain subscribers before and after this price increase.
  • Renewal price increases can be optimised not only for renewal price elasticity but for expected yield post-increase, which can extend the hybrid/print subscription revenue runway considerably.
  • “Sleepers” or “zombies” are customers who pay for their subscriptions but have very low engagement. They will usually not have the highest price elasticity and are often less likely to stop after a price increase than a highly engaged reader. These subscribers often want to “contribute” to your news organisation so it remains in the community.

Subscription yield management, which includes pricing strategy as well as tactics related to audience revenue growth, is a field of analysis that has very high ROI for publishers.

About the Authors

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