If you are looking to make budget next year, read this blog


We’re onto something at the Toronto Star.

On November 4 we will launch our third subscriber opt-in product in the past two years. The first two have resulted in new revenues, impressive profits and a growth opportunity beyond our wildest expectations.

The concept is simple: understand your readers, their wants, needs and what they might pay for. Then, give it to them and market it aggressively.

Our journey started about two years ago when newspapers across North America were cutting costs across the board in an effort to stabilise earnings. Toronto was no different. Earnings were under immense pressure.

Of course, TV books were an obvious target. After all, in this digital age, many people are no longer using a print TV book to determine what to watch on TV? In addition, advertising revenues from TV books were also on the decline. In fact, they were on their way to $0.00 over time. To some people, killing our TV book seemed an obvious decision because they considered it a losing proposition.

Others of us weren’t so sure. We wanted to find out from our readers exactly what they thought. So we reached out to our subscribers and found that, indeed, 50% of them never read a TV listings book.

BUT that also means that 50% do.

And our research showed that the 50% not only used the book, but were heavy users, and were willing to pay. But they also wanted improvements in the book. We listened, improved the book according to what readers told us, put a C$0.50 charge on it and launched it as an opt-in product. We continued to offer it in single copy, but increased the price by the same C$0.50. It’s been a huge success.

A few months later, I had a copy of The New York Times International Weekly edition dropped on my desk. It had arrived in the newsroom and was pitched to them as something that could enhance our product. After much study, we felt this could work as another opt-in product if we delivered it to the people who wanted it and were willing to pay for it.

I remember my first conversation with the NYT syndicate group when I asked them not for four or maybe six pages of content, but 24. I’m sure they figured this crazy Canadian had lost his mind. After a few more conversations, both parties were interested in this new approach. A few months later we launched a 16-page NYT International Weekly edition, plus a 12-page tabloid NYT Book Review section. We sampled all Star readers for six weeks and then offered them an opportunity to opt-in at C$1.00 weekly. We also added the product to our single copy product and doubled the rate from C$1.00 to C$2.00. In time, we had another smashing success on our hands.

Now flash forward to the present. Here comes “That’s Puzzling,” a 40-page weekly puzzle magazine with more than 50 interesting games for the puzzle enthusiast. Our research told us that almost two-thirds of our readers use the puzzles from the newspaper on a regular basis, with a good percentage of them considered heavy users. This product will be offered at a price of C$1.49 weekly. We will also include it in our Friday single copy edition and we will double the price from C$1.00 to C$2.00.

It’s too early to report on the success of That’s Puzzling, but we believe we will have a third winner on our hands. Starweek, our TV listings magazine, has a weekly paid circulation of approximately 250,000. The New York Times weekly section has a paid circulation of approximately 70,000 and we believe our puzzle book will end in the 50-60,000 paid circulation level.

You have enough information here to begin to run rough math as to what can be done in your market. It might not be TV listings or puzzle books, but there are things your readers would be willing to pay for in addition to what they pay now for their print subscription. We have a list of 4-5 other topics that might very well find their way to market. We have more work to do on the reach front, but extensive reader communication has opened up a whole new world to us.

And, have you noticed these are print offerings in a digital world? Don’t give up on print. The earnings from these efforts help us invest even more in our digital offerings. It’s a win-win for a print/digital strategy.

I would suggest you follow the tips below should you decide to venture into the opt-in world. Success on this front does not come easy. Having a good idea, a solid plan and executing it well can be a recipe for success. Short cuts will likely result in fewer opt-ins and softer results.

  • Research: I can’t say enough about understanding reader’s expectations, both on the products they might pay for and the content of those products. Had we not conducted extensive research I doubt we would have experienced the success we have. Our models based on research and our reality have turned out to be mirror images of each other.

  • Ignore the internal experts: Too often we talk to our friends and/or colleagues at the office to determine what readers might want. I think that may have worked 20 years ago (probably not!) but now we better actually listen to the readers. I’m not a big TV viewer or a puzzle player, but my readers are. Your executive team likely doesn’t represent your average reader.

  • Don’t over-serve your audience: It’s easy to fall into the trap of taking new products to your entire market. But don’t! We would lose money on these products if we had to incur the production costs of sending them to people who won’t pay for them and won’t read them. By finding the niche inside your existing customer base you can have a profitable market segment.

  • Pricing: You really have one opportunity to get this right. In hindsight, I think we priced our TV book too low. We felt that because it had been free for years we would be lucky to charge C$0.25 per week. I pushed our team hard to go to C$0.50, but I think I should have pushed harder. The puzzle magazine will come out at C$1.49 per week. We will soon find out if that is too high, but our consumer research tells us we have the price right.

  • Opt-in process: Make it super-easy. We have developed an online process that just requires your phone number and a couple of clicks and you are in. We also developed an IVR option that is equally easy.

  • Sampling: We had a free trial to all subsribers for six weeks with both of our first two offerings. The puzzle magazine will be a three-week sample to all Star subscribers. You need to give them time to “like” (not a digital like — just a like) the product. We think three weeks is the absolute minimum and we may find the six-week schedule might actually be the right model.

  • Keep the costs low: It goes without saying that you must make these products as simple to execute as possible — low content charges, low production costs and cheap delivery all play into the financial model. Simply put, effective operations are key. For instance, we run the NYT product at the end of a daily run when we have press crews already in place.

  • Effective field operations: You need to be able to handle these deliveries in the field. For years we have been investing in the quality of our delivery. It’s allowed us to be innovative in what we can bring to market. In the next six months we expect to introduce a tablet for carriers to better manage their routes.

  • Invest in marketing efforts: Unfortunately, there is a one-time cost to acquire these new opt-in commitments. I won’t go into the details of our plan, but you will need to budget roughly C$1.00 to market to each subscriber effectively over the course of your sample period.

I wish you success; this approach could help you make your budget next year.

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