3 insights for generating reader revenue

Newspapers are starting to realise it is engagement, not reach, that will help them survive in the digital age. To succeed, newspapers must monetise the engagement of their most loyal readers, whether that is through direct subscriptions, memberships, or something entirely different. A new report from the AP’s Ryan Nakashima and Anne Cai looks at how publishers are capturing digital reader revenues. While full of interesting examples, there are three main insights that I think are important to highlight.

Reduce subscription friction

There are many drop-off points in the subscription funnel, with different segments of readers being deterred by a variety of things, including the fear of getting stuck in a subscription they can’t easily cancel. However once a reader has made the commitment to pay for content, it’s imperative to make it easy for them to continue. We’ve studied before what The Washington Post’s Miki Toliver King calls ‘involuntary churners’–subscribers who would continue to subscribe but instead churn. She had a feeling that some subscribers where churning when their credit cards expired. So instead of simply sending an email reminder, they also implemented a pop-up warning for subscribers to update their information while reading on the website. Since 2016 this small action has reduced the amount of involuntary churners by 19%.

The Seattle Times had a similar issue with credit card decline failures resulting in unexpected churns. If a credit card failed for print subscribers, the company would simply send a print invoice and continue delivering the paper; however, for digital subscribers there would be a stop in service. In the beginning, 62% of all digital subscription churns were due to issues with processing a credit card transaction. Now by focusing on addressing this problem head on, through reminding customers of their credit card expiration dates, using dedicated services for updating credit card information, and changing the payment retry rules, The Seattle Times has been able to lower the rate of involuntary churners.

Metered paywalls drive subscriptions

It shouldn’t come as a surprise, but metered paywalls are the strongest drivers of digital subscriptions, according to a study from the Media Insights Project. 47% of subscribers report that running out of free articles pushed them to pay for a subscription.

Matt Skibinski studied comparative data from more than 500 publishers to compile best practices for paywalls. For publishers with a metered paywall strategy, he suggests setting a meter that will stop 5-10% of their readers—for most publishers, this means 5 or fewer free stories per month. The report is very interesting, so I will be analysing it and giving highlights later this summer.

Explore alternative business models

In addition to paywall and subscription strategies, publishers should explore alternative business models for reader revenue.

One such alternative business model is the soon to launch startup from Square co-founder Jim McKelvey. Invisibly aims to frictionlessly nudge readers through the digital reader revenue funnel. Through a digital wallet of sorts, readers are given credits for every ad they interact with, which are then subtracted when they consume content. Once the balance runs out, the publisher can opt to ask for payment for the single article or for access over a certain time period, or prompt the reader to view another ad. Both readers and advertisers can benefit from the improved experience, with readers facing less intrusive ads and advertisers having a better chance of converting readers that have chosen to see the ad. Currently Invisibly is working to partner with publishers before a planned launch later this year.

LaterPay is another example, allowing readers to pledge to pay for content at a later day. Once a reader pledges to pay, their content consumption is tallied up until they reach $5. Then they are asked to either pay or they won’t be able to access any more content. Currently in use at German magazine Der Spiegel, LaterPay reports that 80% of users do chose to pay when presented with the bill. This model works on the IOU concept, so that readers are more willing to pay for what they’ve already consumed rather than on a prediction of the value they would get out of a subscription.

This article was written by Mary-Katharine Phillips, Media Innovation Analyst at Twipe from 2017 – 2021.


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