March 6, 2018 | Lucy Penn
As many publishers continue to analyse and adjust which digital strategy best suits them, print advertising revenue and home delivery subscriptions continue to fall. Choosing the right approach is crucial, a familiar, engaging and easy to navigate platform are all essential elements required to encourage users to pay and subscribe to your publication.
U.S. daily newspapers witnessed a sharp decline in weekly circulation figures in 2016 falling for the 28th consecutive year, according to the 2017 Pew Research Centre report. Unfortunately, this is the same case for advertising revenue that observed a “double-digit decline in advertising revenue” in 2016 marking an all-time low for the industry, cutting the generated revenue by a third compared to a decade ago.
This reinforces how important the move to a subscription-based strategy is. Digital media including mobile now accounts for nearly 49.6% of all media time according to eMarketer and 90% of all mobile time is spent in apps. These statistics cannot be ignored and publishers must learn to adapt to how readers now consume digital media.
So what does this mean for publishers?
The significant decline to their traditional revenue streams is forcing publishers to pursue a new direction towards a sustainable digital subscription model. This includes figuring out what that subscription strategy entails and ensuring that it attracts paying subscribers. However, determining a pricing strategy that generates a primary revenue source whilst enticing subscribers to take out a digital subscription can be difficult…
A recent American Association Press report looked into this issue with an attempt to identify which pricing structure to choose. Analysing the individual price of digital subscriptions of 100 newspapers the report uncovered a number of key findings, including:
The weekly price of digital access for the 100 sites ranged from $0.46 to $7.85. The median digital subscription price was $2.31 per week.
This research indicates how varied the pricing structures are for digital news subscriptions, selecting one that your readers find valuable is vital. The research also looked into billing frequency, identifying the “majority (71%) of the 100 news organizations had monthly billing, 24 charged weekly and five charged annually”.
A noteworthy point found by the research was that ‘Discounted trial subscriptions’ resulted in higher conversion rates than ‘free trial subscriptions.’ Free trials resulted in conversion rates of ‘less than 25%, while discounted trials resulted in conversion rates of at least 26% (through the majority was at least 76%).
Pricing is just one element used to entice subscribers. The research also identified that publishers encouraged digital subscribers to pay for their digital subscription by adding perks and added benefits. These included things such as: fewer advertisements, subs sharing, free e-cookbooks, free movie screenings, Spotify access and much more. All of which attempt to get the readers to try the digital platform and ultimately become a loyal subscriber.
The research also looked into ways to help define which pricing model publishers should set. Unsurprisingly, ‘market testing’ came out on top with an average importance level of 4.20 out of 5. Corporate-set pricing (3.58) followed by competitor pricing followed (2.33 out of 5).
All of the elements discussed within this article need to be considered to establish a viable digital subscription strategy. If applied correctly, a robust subscription strategy can combat the sharp decline in print advertising and home delivery subscriptions that have sustained traditional newspapers for so long. If you would like to find out ways that PageSuite can use their extensive industry expertise and knowledge to help create a relevant subscription model for your readers, please get in contact.