Much has gone down in the past two years. Delving into the narrow view of media digital subscriptions, INMA Researcher-in-Residence Greg Piechota summarised what it all means at this point in time and for the near future of news media companies.
“We all know that in a crisis, people turn to quality news, and many of you observed that,” he said, noting the huge growth in demand as the pandemic descended on the world during 2020.
Speaking on day three of the INMA World Congress of News Media, sponsored by Piano, Piechota shared some of the original research he has done in the past two years with attendees. The World Congress continues throughout May on Tuesdays and Thursdays. Registation is available here for all or individual sessions.
Piechota shared these statistics:
- The number of online users grew, with the median site doubling its online subscriber base.
- Worldwide, the number of online readers spiked 40% from 2019 to 2020.
- Although those numbers slid somewhat during 2021, the continuing battle with COVID-19 in Asia and the war in Ukraine have pushed subscription growth.
- By Q1 of 2022, online subscriptions to news brands were up 130% from that same time in 2019.
“We can really see that the interest in news is much higher than it was before the pandemic,” he said. “And many publishers translated this higher demand into subscriptions.”
3 key lessons learned
This shared worldwide experience provides publishers with several takeaways, and Piechota shared three of those lessons:
Lesson 1: The news cycle makes or breaks subscriptions businesses.
When big news broke, news brands benefited and enjoyed significant gains in online users. Some companies saw a nearly 75% bump in online subscriptions for the first quarter of 2020, and COVID-19 had the single largest effect on the success of new paywalls.
As the pandemic eased in early 2022, digital-only subscription starts fell off. But for national news brands, that slowdown was soon offset by the war in Ukraine. While sales bumps are linked to the strength of the brand, it also requires mobilisation of the newsroom and attention to marketing efforts during big news events: “It is not just about luck, it is about the skill. News is everything,” Piechota said.
Lesson No. 2: Growth is linked to paywalls, price, and processes.
The brands that saw the most subscription growth had certain things in common:
- They showed their paywalls to six times more users and had an average paid stop rate of 30%.
- They offered an efficient checkout process.
- The offered cheap, longer trial offers.
“Almost half of the top 50 news brands were offering very long trials, more than three months,” Piechota said.
Lesson 3: Leaders created growth engines.
High-performing publications had certain elements, such as a long-term strategy, internal alignment and collaboration, operational excellence, and a readers-first culture. Piechota said they started with a North Star goal and planned backward, adopting agile work methods and empowering teams with the ability to have a say in how they reach those outcomes.
Organisation around the funnel is also important, with a focus on acquisition, retention, and revenue. And finally, it’s essential to budget for long-term growth and keep the funnel healthy.
“This all needs to come together,” Piechota said. “That’s why mature publishers are growing the fastest.”
The road ahead
Although publishers can learn from the past, what’s on the mind of most now is how to continue this growth for the future. Although heavy news readers are crucial to kickstarting subscription growth, they cannot sustain a publication’s long-term growth.
And while the casual readers were essential for subscription growth during difficult times, how do publishers attract them during times when there’s no war or pandemic to keep them engaged?
“You need to adjust the value proposition and also your marketing mix and distribution,” Piechota said. He focused his thoughts on the value proposition and suggested three ways for publishers to beef up their news bundle:
As an example, he looked at the path taken by The New York Times to become “the essential subscription” and found that its growth is increasingly driven by non-news products.
Using the “build, borrow, or buy” method, he showed that building its own products — such as games and cooking —required The Times to spend more than nine years to achieve 1 million subscriptions for games and seven years to do the same for cooking.
While it allows complete creative control, that route is slower, costlier — and has more risk than borrowing or buying. Each method has its tradeoff when it comes to factors of creative control, speed, risk, and cost.
Bundling is becoming the answer for publishers, Piechota said, and 47 of the top 50 news brands offer bundling that allows benefits beyond access to their news Web sites.
Of those brands, 90% integrated non-news benefits into their news products and 30% sell standalone products as part of a bundle. While fewer publishers are working with third parties on bundling, he said this could change in the future.