By Massimo Barsotti

Chief Marketing Officer and Chief Product Officer

Eidosmedia

Milan, Italy

Connect

Online news subscriptions picked up during the pandemic, and, for some providers, that pandemic-driven boost now represents a sustainable revenue stream.

However, a recent report on digital news from Reuters Institute shows growth has slowed, and only a few players in each market have developed a successful subscription-based revenue model.

Most digital news companies have not unlocked the formula for getting people to subscribe to news.

What, if anything, can news outlets can do to keep the subscription momentum going?

The evolution of online news subscriptions

After years of declining revenue, the surge in online news subscriptions during the pandemic provided a much-needed lifeline for many publishers. As people looked for reliable, accurate coverage of the COVID-19 pandemic in their area, they turned to the news.

We also saw surges in subscriptions across all types of entertainment apps as people looked to fill their time in quarantine. Even as late as 2022, research showed subscription revenue was still growing for news organisations of every size. Now, however, the Reuters research shows we may be seeing that trend start to change.

"Our data show little growth in news subscription, with just 17% saying they paid for any online news in the last year, across a basket of 20 richer countries," according to the report. Many of the countries leading the pack when it comes to supporting news are in Northern Europe. According to Reuters, "Norway (40%) and Sweden (31%) have the highest proportion of those paying, with Japan (9%) and the United Kingdom (8%) amongst the lowest."

Perhaps more importantly, the research found large proportions of digital subscription dollars go to just a few "upmarket national brands."

Still, even when people are willing to pay for news, they seem to want a discount. Reuters found heavy discounting was commonplace, with 41% of respondents reporting they currently pay less than the full price. Additionally, Reuters reported, "Well over half (55%) of those that are not currently subscribing say that they would pay nothing for online news, with most of the rest prepared to offer the equivalent of just a few dollars per month, when pressed." A meager 2% of people who do not currently pay for a news subscription say they are willing to pay the equivalent of an average full-price subscription.

Despite the dire statistics, however, some news organisations are clearly making it work. What are they doing right?

Characteristics of sustainable subscription models

Press Gazette ranks the news brands that outpace the competition when it comes to converting site visitors to paying subscribers: "Topping the list of brands included in our analysis once again are The Athletic and News Corp financial title Barron's, which both had conversion rates of above or close to 20% - well above most industry benchmarks."

Meanwhile, Press Gazette reports that International News Media Association (INMA) found the median publisher conversion rate was just 0.6%, with the 25% of brands who performed best converting 1.4%.

So, what sets outliers like The Athletic and Barron's apart? Press Gazette identified a few factors:

• How long the paywall has been in place: The longer a paywall has been in place, the more time it has had to become effective.
• Premium content: Press Gazette found that, of seven brands on the list with a conversion rate of more than 10%, five of them were specialist titles focused on areas such as sports, consumer reviews, or finance.
• Breaking big news: The news cycle can make or break a news publication, and those that put up paywalls before a big story - such as COVID-19 - did better than those waiting until after the news breaks.
• Knowing your users: User experience (UX) is integral, especially when it comes to converting subscribers. Katelyn Belyus, from audience intelligence company Piano, told Press Gazette, "It's about understanding what appeals to your audience and tailouring your subscription messaging and offers accordingly, ensuring that price and terms are displayed in front of audiences who are most likely to engage and convert. By targeting the right offer to the right audience, you can optimise conversion rates further."
• The type of paywall: While soft paywalls allow users to experience some content before they buy, research shows the fastest-growing news organisations ask for money from the outset.
• Pricing: While discounts may be popular, many publishers are doubling down and increasing subscription fees: "Research by Press Gazette earlier this year found that the price of a digital news subscription had risen by 19% on average among a group of titles in the UK over the last year, which included the Financial Times, Bloomberg, the Telegraph, and the Times - all news brands with conversion rates (based on our metric) that are higher than the median rate found by INMA."

Importantly, publishers should stay focused on more than just bringing in new subscribers. Reducing churn is also critical to ensuring the sustainability of subscription strategies. Local Media offered the following advice: "Knowing that churn will continue to be a challenge, build a multi-discipline plan for reducing it through smart engagement, marketing, and content strategies."

Last year, Eidosmedia reported, a German publisher learned that 50% of subscribers who churned did so because they felt there were too many ads. The publisher reduced its ad space by 70% to improve the subscriber experience. The reason for churning fell by 50%, and the drop in revenue was offset by a 20% higher price for the improved subscription experience.

Every audience is different, but finding the right combination of factors while employing best practices is key to success. Sometimes, it's as much about the right technological strategy as it is about the content and user experience.

Effective paywall strategies to boost conversions

Zuora, a paywall technology provider, issued several tips to make the most of conversions.

• Consistently test the entire UX: Using A/B or split testing can help publishers understand their audiences and collect data to communicate what works.
• Customise your forms: Reduce friction to make it as easy as possible for people to make the leap.
• Optimise across devices: From optimising for screen size to ensuring users have access across all their devices, it is important to think about cross-device functionality.
• Personalise your paywall messaging: Publishers do not need to decide between hard and soft paywalls. Personalising your offers to the individual can be a better way to maximise conversions.
• Curate relevant content: Showing the right content to the right audience at the right time can help boost conversions. In fact, according to Zuora, "Conversion rates grow across audiences when content is curated or strategically packaged to make sure products resonate with users' actual lifestyles."

As the digital landscape evolves, subscription strategies must also change. Savvy publishers must not only stay on top of the technology but continue collecting and iterating on data. Increasingly, AI and other tools are part of the strategy to stay ahead of audience preferences.

AI and machine learning power tools can enable better decision-making and do it automatically to ensure publishers are capturing every revenue opportunity.

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About Massimo Barsotti

Massimo Barsotti is chief marketing officer and chief product officer at Eidosmedia in Milan, Italy. Massimo can be reached at [email protected].

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