Subscription Pricing: From COVID Bump To Sustainable Revenue
The pandemic-driven subscription surge and the rise of segmented approaches to audience management are driving new urgency for sharper pricing strategies by media companies as markets emerge from the worst of COVID-19.
Who should read the report
Media professionals in charge of digital subscriptions and pricing strategy.
Dawn McMullan is senior editor of the International News Media Association (INMA) and a freelance author across numerous magazines.
The pandemic-driven subscription surge and the rise of segmented approaches to audience management are driving new urgency for sharper pricing strategies by media companies as markets emerge from the worst of COVID-19, according to a new report by the International News Media Association (INMA).
“Subscription Pricing: From COVID Bump to Sustainable Revenue” dives into why pricing is so important, why it’s so difficult, and who is doing it well today.
“Pricing is the fastest and most effective way for media businesses to increase profits,” says INMA Researcher-in-Residence Greg Piechota. Yet while some media companies are well into prioritising their pricing strategy, many do not yet have a road map in place. The good news is this: Most of the media industry learned in 2020 how important a pricing strategy is.
Dawn McMullan, senior editor at INMA and lead author on the report, talked to Piechota, as well as pricing experts from FTI Consulting, Mather Economics, and Piano. Case studies from Dennik N in Slovakia, The Boston Globe in the United States, Politiken in Denmark, Amedia in Finland, and Malaysiakini in Malaysia also share current success stories about subscription pricing.
Key takeaways from the INMA report include:
- Charging your more engaged customers more over time, the “revenue maximising journey,” is generally accepted as a best practice.
- A digital subscriptions strategy means volume first (which COVID gifted the news industry), pricing second. Yet smart pricing is key to both acquisition and retention.
- Data, not gut feelings, must guide pricing strategy.
- Most media companies are not competing with The New York Times or Netflix, so prices shouldn’t be based on those subscription models.
- Media companies can’t switch print readers who were paying US$40+ per month to digital readers paying US$10 per month. Those prices need to get closer.
- Research shows what price change individual customers will tolerate.
- Customer lifetime value (CLTV) is a key factor when determining pricing strategies.
The goal with all of this: establish a business model based on a direct reader relationship that sustains journalism.