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You are here: Home / News Media / Why Do Subscribers Subscribe?

Why Do Subscribers Subscribe?

March 29, 2016 by Matt Lindsay Leave a Comment

news-media-subscribersThe future of the news media industry and of content providers is the subscriber.  Subscribers will pay to consume and support the production of content that they find important or entertaining. The delivery platform is important, but less so, than the engagement the subscriber has with the content itself.

Print may have a long life ahead of it if the audience will pay for access to the content in that form. Digital platforms will continue to evolve rapidly, likely moving to augmented reality and virtual reality technologies. What is most important for the content developers is the relationship with their customers and the trust that relationship creates.

Casual consumers of the content may generate revenue from advertising impressions, but that revenue stream will not support the creation of content at a professional level, such as investigative journalism, in most cases. Ad blocking software is becoming ubiquitous, which is further reducing the potential of ad revenue. The decline in advertising revenue is increasing the importance of subscription revenue as each year passes.

The Steps to Subscribing

The path that individuals take to a subscription is a topic many companies and academic researchers are studying. We do a lot of work with our clients on digital audience and subscription analytics, and we have found some interesting and counter-intuitive results. These findings have changed our perception of the decision process that takes place when individuals consider subscribing to content.

It is important to realize that the cost of a subscription involves non-monetary components in addition to the price paid by the customer. The sharing of personal information is a considerable cost to most consumers, and we find that the bounce rate, the percentage of visitors that leave a page requesting contact information to access content, is almost as high as the bounce rate for pages requesting payment. 

Actions that are leading indicators of a visitor’s eventual subscription are indications of growing engagement with the content. These indicators include frequency of visits, number of pages viewed and time on the site. For news media sites, the breadth of topics consumed is important, which likely indicates the individual’s interest in a community at large instead of a particular subject.

A typical site will have about half of its page views consumed by one tenth of its visitors. Of the engaged visitors, converting 20 percent of them is a common benchmark, and this requires considerable marketing and acquisition effort.

A funnel is a common depiction of the path to the subscription transaction. The steps along the funnel typically represent steps of a financial transaction such as the presentation of subscription offers, payment information, order confirmation and successful completion. A better set of steps to represent could include engagement metrics such as first repeat visit, newsletter opt-in via email, interaction through social platforms, registration with name and zip code and then acceptance of a subscription offer promotion.

Screenshot of paywall and subscriber entry funnels

These steps would precede the financial transaction funnel stages typically represented. Knowledge of the actions that can influence the progression of readers from one level of engagement to another enables publishers to affect these progressions through marketing communication or incentives.

Predicting Who Will Subscribe

In a traditional print publication, subscription probability is often well predicted with demographic and geographic segmentation. With digital publications, demographic variables are much less powerful for predictive modeling of subscriber behavior. Attitudinal variables such as preferences or opinions are more important.  So, for instance, desire to learn more about cooking plays a far greater role in determining an individual’s probability in subscribing to a cooking publication than income.

Sharing content via platforms such as Facebook, Twitter and Google is an opportunity for publishers to attract potential subscribers. They will need to understand what content to share on the platforms and what content to keep for their paying subscribers. These platforms are sales channels, and it will require testing to understand how best to optimize the conversion of readers that first interact with a publisher’s content via a platform to a direct subscription relationship. Encouraging interaction with the content has been identified as an important element of the acquisition strategy.

Audience revenue from subscriptions is one of the critical metrics that publishers will need to develop as they transition to a digital-dominant business model.  Advertising will remain important, and ad technologies will help publishers monetize their customer data. Subscriptions will not only generate direct revenue, but they will also enable greater advertising revenue through the creation of greater first-party data.

Why Do Subscribers Subscribe?

Because they value their relationship with the content and the community around that content. Acquiring subscribers is about establishing that relationship and adding them to the community.

Filed Under: News Media, Publishing, subscribe Tagged With: digital media, news media, Publishing, subscribers

About Matt Lindsay

Matt Lindsay, president of Mather Economics, has more than 20 years of experience in helping businesses improve performance and drive revenue through economic modeling. In consulting roles over the past 15 years, he has shared this expertise and developed pricing strategies and predictive models for clients, including the Intercontinental Exchange, Gannett, The Home Depot, NRG Energy, Tribune, IHG, McClatchy, the Everglades Foundation, the Walton Foundation, Dow Jones, and The New York Times.

Prior to joining Mather Economics, Lindsay worked with the Corporate Economics Group to leverage information on price elasticity and marginal network costs to improve profitability by customer for the United Parcel Service (UPS). He began his consulting career with Arthur Andersen, working in the firm’s Atlanta strategy practice.

Lindsay’s extensive experience in marketing spend effectiveness optimization, customer retention, analysis and the resulting predictive models have been used to support strategic pricing decisions, marketing initiatives and customer acquisition tactics, ultimately generating millions of dollars in incremental profits for his clients. He is a sought after expert and frequently speaks at industry events including the NAA’s MediaXchange, the INMA World Congress, and the WAN-IFRA World Newspaper Conference.

Lindsay has a doctorate in economics from the University of Georgia, a master of applied economics from Clemson University and an undergraduate degree in economics from the University of Georgia.

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