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As subscription growth plateaus, many media companies are turning to artificial intelligence to bolster their revenue streams. From personalized content and recommendations to dynamic pricing, AI allows publishers to tailor their services and connect with users like never before.
In this post, we explore four key ways media companies can use AI to drive reader revenue and help secure their future in an evolving industry.
1. Personalized content
Consumer needs and expectations have changed considerably over recent years. In an age of advanced algorithms, users expect content that’s curated specifically for them, along with accurate recommendations. In fact, a study by McKinsey found that 71% of consumers now expect companies to deliver personalization, and 76% even get frustrated when they don’t.
In short, consumers want to feel valued and understood – something that streaming giants Netflix and Amazon have mastered. Their AI-powered algorithms devour vast amounts of data on genre preferences, viewing habits, watch history and ratings, which then allows them to make real-time recommendations based on that user’s specific interests. It’s a strategy that’s proved highly successful in keeping viewers engaged and loyal to the platform.
It’s perhaps no surprise then that publishers are also tapping into the trend for more personalized content. By using AI-driven tools to analyze readers’ behavior, interests and engagement patterns, you can refine audience segmentation and deliver targeted content that resonates with the user. What’s more, you can use the data to optimize your distribution channels and maximize reach too.
This results in higher levels of engagement and greater brand loyalty, ultimately driving reader revenue. The statistics speak for themselves. According to the McKinsey report, companies that excel at personalization generate 40% more revenue. Some 76% also said personalized content encourages them to buy, underlining its importance as a business growth tool.
2. Trend analysis and predictive modeling
Trend analysis is another useful strategy for boosting revenue. By crunching vast amounts of data, AI predictive modeling tools can help publishers spot emerging trends and anticipate what content will be a hit with readers in the future. Armed with this foresight, you can then align your content creation, marketing and distribution strategies accordingly.
Being able to predict and capitalize on future trends is essential if you want to stay ahead of the curve, attract more visitors and drive up subscriptions. It’s a strategy that’s certainly paid off for Belgium-based media company, Mediahuis Group. By using machine learning models to identify past trends and predict new behavior patterns, Mediahuis increased retention by over 14% in just three months. They now have around 1.8 million subscribers across the group.
The media industry is constantly evolving and keeping pace with the changes can be challenging. However, by investing in predictive AI tools you can adapt more quickly to emerging industry trends and future-proof your business for the long term.
3. Dynamic pricing strategies
With subscription volume reportedly growing by just 3% last year, many media outlets are having to rethink their pricing strategy. Once again, this is an area where AI really excels. By analyzing market trends, user behavior and other valuable data, AI algorithms can automatically adjust paywall prices and value propositions to meet the unique needs of each consumer.
This dynamic approach is a game-changer for increasing conversions, reducing churn and driving reader revenue. In fact, research suggests dynamic pricing solutions may boost revenue by 2-5% and margins by 5-10%. They can also lead to higher levels of customer satisfaction through improved price perception.
By using artificial intelligence to set prices, publishers can optimize pricing to maximize value for their content, while staying competitive in the market.
4. Churn prediction modeling
With the high cost of living continuing to stretch household budgets, subscription churn is a major issue for publishers. According to INMA Benchmarks, 67% of new subscribers stay for a year and just 28% remain for three years. Although the average monthly churn rate for a median news brand is estimated to be 3.6%, the figure can be much higher for individual brands.
If your media company has a high churn rate, it’s losing subscribers quickly. This translates directly to lost revenue, decreased profitability and reduced growth potential. However, with the help of artificial intelligence, you can reduce this risk.
Churn prediction algorithms analyze historical data to help companies identify the behaviors that could lead to customers unsubscribing from their service. Once you know which readers are most likely to churn, you can take proactive steps to re-engage them – before it’s too late. This might involve offering incentives such as discounts, promotions, or other rewards.
We’ll be sharing more insights on how media companies can drive revenue and enjoy long-term growth at our one day Revenue Europe conference in Berlin on 1st October. Book your ticket here.
