2020 set up the perfect digital subscription opportunity, so now what?

By L. Carol Christopher

INMA

Pleasant Hill, California, United States

Connect      

The COVID year was a year people turned to trusted sources, and news publishers translated the global demand for news into subscriptions. Their strategy, as INMA Researcher-in-Residence Greg Piechota described it, was:

  • Attract: News publishers effectively broadened each stage of the subscription funnel.

  • Register: High-interest news attracted more visitors to sites.

  • Show offers: Trading content for registrations helped to nurture new, light readers

  • Convert: Tighter paywalls exposed more readers to offers. “Publishers who used trial subscriptions … outperformed those who didn’t,” he said. 

  • Retain: Long-term trial offers helped to retain readers better. “This gave them a longer runway to engage readers successfully,” he said.

The result was that in 2020 many publishers broke records in subscriptions, Piechota, who heads up INMAs Readers First Initiative, said during module five of seven as part of the INMA World Congress of News Media on Thursday.

Piechota shared many industry data points, including this one: the median change in the digital subscriber base of news publishers globally at the end of 2020 vs. 2019 was +58%, he said: “This was the dividend of years of focus on reader revenue, of investment in journalism, in talent on the marketing, product, technology, data sides and, of course, the business learnings of at least 10 years of building the subscription business in digital for news.” 

In 2020, subscription leaders were funded primarily by digital and by readers:

  • 48% from reader revenue.

  • 30% from advertising.

  • 22% from other.

Piechota quoted The New York Times President & CEO Meredith Kopit Levien: “The last 10 years were to test our strategy that journalism was worth paying for; the next ten will try to scale that idea.”

What’s next?

So where is the growth coming from in 2021? 

  • The news cycle no longer drives acquisition so it will be important to turn to marketing instead. 2021 will be about retention, promotion, and new products. News publishers cannot rely on the news cycle; they need to use marketing to grow as well as innovate new products.  
  • This year, news publishers need to turn to marketing tools to keep the acquisition at least at 2019 levels since they can no longer depend on the news cycle to drive it. 
  • The Big Idea: News subscription leaders see opportunities in new consumer and group offers. To unlock growth, identify new segments and adjust your value proposition and marketing mix.

Rethinking the funnel

Trade content for data to engage casual readers and collect first-party data, Piechota encouraged, describing the engagement loop of one hypothetical reader:

  1. New and returning reader comes sideways, e.g., through search and social media.

  2. She creates an account to read an article.

  3. She goes through onboarding and completes a “sticky” action, e.g., signs up for a newsletter.

  4. She gets pushed more articles, e.g., via e-mails or paid ads, and over time gets stopped by a paywall.

  5. Hopefully, after a number of loops, she crosses an inflection point of engagement and subscribes.

  6. As a new subscriber, she gets onboarded to the full experience.

  7. If engaged, she is likely to renew the subscription or even upgrade and advocate the brand to others.

Piechota highlighted businesses that have rebalanced their business models with reader revenue. To succeed with subscriptions, these publishers refocused on the end consumers of their news products. For example: in 2008, The New York Times had US$1,800 million in advertising compared to US$1,080 in subscriptions. By 2020, advertising had fallen to below US$720 million, while subscriptions had risen to more than US$1,080 million.

News media companies are growing subscriptions and thinking about collecting first-person user data because of the opportunity to reinvent advertising in post third-party cookie world, Piechota said. The next step in business transformation and reader revenue is innovation in advertising. 

“Who would have thought?” he queried. Reader revenue and advertising strategies converge and rely on each other. To succeed with subscriptions, publishers had to get new resources, talent, skills, work methods. The business model change forced changes in resources, staffing, operating model and companies’ culture. This is all now translated into innovation in advertising.

The big questions for 2021

The questions to ask for 2021, primarily, are about readers:

  1. How to engage readers beyond news content with community, experiences?

  2. How to engage young, female, out-of-the market readers?

  3. How to respond to the unbundling of newsrooms and the rise of the individual journalist? “How do we give journalists a stake in our brands,” he asked.

The World Congress continues Tuesdays and Thursdays through May. Register here for future and recordings of past sessions.

About L. Carol Christopher

By continuing to browse or by clicking “ACCEPT,” you agree to the storing of cookies on your device to enhance your site experience. To learn more about how we use cookies, please see our privacy policy.
x

I ACCEPT