Digital Publishing Reader Revenue
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Why readers don’t pay for news, and how publishers convince them to

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Price remains the biggest issue and turns out Netflix and Spotify are seen as benchmarks by younger audiences

new study says price, the access to free news somewhere else, commitment and technical issues are the main reasons for not paying for news.

The good thing is that these reasons have remained largely the same across countries, small and big news outlets for the past decade since digital subscriptions became a revenue driver.

Also, there are strategies that publishers are using to make these reasons less of an issue. The challenge, as always, is aligning your news organisation to follow the best practices, test and experiment.

I have recently published the history of Bild’s digital subscription evolution. The leading German outlet started out with an initial three-tiered offer (good-better-best) and after years of testing and experimentation found out that a simpler proposition for new subscribers drives more conversions and also higher revenue.

Thanks to the RQ1 newsletter, I get a monthly dose of the latest research on news and journalism. That’s where I found this paper by Tim Groot Kormelink of the Vrije Universiteit Amsterdam.

The qualitative study follows the results from interviews with 68 participants who tried a free three-week newspaper trial subscription and afterward were interviewed about their considerations for (not) getting a paid subscription.

The ages of the participants ranged from 20 to 75, 36 were women and 32 men. All data collection took place in the Netherlands and the trial subscriptions were also to four Dutch newspapers: 37 participants chose De Volkskrant, 7 chose Trouw, 12 chose AD and 12 Het Parool.

Groot Kormelink’s intention was to study people’s considerations for (not) paying for news. It focuses not on a general public but on participants interested in receiving a trial subscription. 

Price is too high

The Dutch researcher identified five price-related subthemes:

  • Too expensive – for younger participants their limited budget was an issue and for others it was the high price followed by an introductory proposal and high long-term price (yearly, etc.).
  • Print subscription as reference price – participants argued news subscription was too pricey without knowing the actual cost, having a print subscription as their reference price, that tends to be much higher than digital.
  • Normative concerns against paying for news – some participants, atthough a marginal group suggested they cannot afford quality news and felt it should be free because “news is a public good”.
  • Subscription-saturation – participants felt they already spend enough on other subscpritions like video and music streaming services. Some hinted that getting only one news subscription creates a FOMO – fear of missing out on what others are publishing.
  • Insufficient use – some simply realized, despite having the subscription, they are not reading the paper enough and others with this mindset thought once subscribed they would need an extra time to read the paper to make the subscription and money spend worth it.

Let’s unpack this. Money will likely remain the biggest issue for subscriptions, not only for news but overall. I have already mentioned Bild’s subscription offer evolution but the German outlet also did extensive price experimentation and had to increase the price of the initial basic offering that started at €4.99 and ended up at €7.99 with and introductory offer of €3.99 for the first year.

Other news publishers, notably The New York Times, also offer introductory pricing and for some the jump from the introductory price to the final price is quite the increase. NY Times’ initial price is only 25% of the normal subscription value, Boston Globe offers a 99% discount on the introductory price (which is something the paper also extensively tested).

When speaking about the issue of pricing experiments and testing to media managers I am always surprised how extremely careful they are, in my opinion, too careful which leads to stubbornly following their once set proposition and being afraid of testing.

Another takeaway – we (as an industry) are probably not talking enough is about the price of the journalism we create, in this case not explaining clearly what the price of the subscription is. Otherwise how is it possible that even young people have the print subscription reference in their heads.

Sufficient freely available news

There will always be a free option for news and depending on the country you have in mind, it will be either by a public broadcaster or by a tabloid.

Groot Kormelink’s study notes that participants recognized that paid-for news tends to be more in-depth, but they were satisfied with the free options saying freely available sources are sufficient enough to get a general sense of what is going on.

TV news was the most mentioned supplement and, surprisingly, news podcasts which were mentioned by participants as a free option to get high quality news from outlets with paywalls as news podcasts are rarely behind a paywall.

That can lead to two conclusions, a) publishers should tighten their content offering and put news podcasts behind a paywall (personally, not a fan of this approach, but it’s definitely an option); b) use news podcasts as a gateway to convince listeners to become subscribers because that’s how the podcast is sustained (that’s one of the paywall messaging publishers have used to convert listeners into paying subscribers or members).

Regarding this topic, I keep coming back to the research paper How to build a good reader revenue model: lessons from Spain and the UK by Eduardo Suárez of the Reuters Institute for the Study of Journalism.

Suárez wrote that there always will be outlets offering free access to their news content and any company with a pay model must explain why readers should support its work. 

It’s not enough just to come up with any messaging, it has to be carefully crafted and convey the mission of the organisation. The Guardian is one of the bright examples that extensively tested its membership pitch to readers.

Suárez also went on and wrote that journalists should explain how they do what they do and media executives should be as transparent as possible in their financial reports. The Guardian told him they found out readers thought that such big news brand with over hundred million readers worldwide must be doing financially fine and be sustainable just from ad revenue. So they had to explain that this source is shrinking every year and they need support from readers’ revenue.

In my experience, talking about the price of journalism is one of the underestimated topics, and at the same time an issue newsroom don’t like and don’t know how to talk about. If you see some of the examples, those are usually newsrooms trying it out for a couple of months and then giving up.

The Guardian is a good example. They spend years testing what kind of messaging gets through to the readers and how various versions appeal to different groups.

Commitment to an outlet and the act of consuming the news

Some participants understood the subscription as extra work, a commitment they had to keep and at times dedicate extra time. Not only that, committing financially to a recurring subscription still seems scary.

One of the strategies news publishers and companies offering subscriptions have been successfully using to counter this particular issue is to add a message next to or close to the “buy” button that readers can “cancel anytime”. Just look at the subscription pages of the leading reader revenue news outlets.

Reading news shouldn’t be a labour. John Crowley, an editor, trainer and consultant, wrote recently for that audio appears to be the least stressful medium for news. Listening to a news podcast allows you to be anywhere, not watch your screen, there is no breaking news and people feel that they can put less effort and spend less energy. Just hit play and listen to an interview.

Podcasts are just one of the options. Newsletters serve as an antidote to overwhelming breaking news coverage to some. Outlets like The Economist or The Financial Times offer mobile apps with limited stories to consume for a lower price.

If your readers and subscribers feel a pressure that consuming news is another job then possibly you are doing something wrong.

Delivery and technical issues are also discouraging from paying for news

Not surprising, an inferior user experience with a subscription leads to people not wanting to pay for it. 

This research is not the first or the last to point out how processes and bad UX fail subscribers. Recently, I worked on a news app, and after years of getting little to none support from the publishing house, it got twice the resources and the team was able to exponentially increase the user experience with very positive feedback. It simply takes money. Also, the publisher found out that a third of their subscribers are daily users and realized the app should get even more resources.

For other publishers it can be a slow webpage or bloated experience with lots of popups or no tablet view.

There is a good parallel in the video streaming world. Netflix and YouTube are heralded as the best experiences for watching online video. Not a surprise that both are the leaders in ad-supported and subscription-supported streaming video charts.

Groot Kormelink also points out Netflix and Spotify serve for younger audiences as price reference points. In addition, the sharing of the subscription is another key feature the streaming services offer.

Although the official subscription sharing was intended for a single household Netflix estimates over 100 million of subscribers are using it across multiple households and is planning steps to crack down on the practice. Spotify plans to do the same. But the current stage and perception by subscribers is that this is a feature, not a bug and Groot Kormelink’s study participants confirmed it.

One of the ways news publishers are fighting this issue among young audiences is by offering discounted subscriptions for students and schools or for retired seniors. Once the students reach productive age and get a job there is a high chance they will stay subscribed for the regular price because they have already built the habit for consuming the news from this outlet.

One (not) surprising and biggest takeaway from the study

Groot Kormelink did a good job also documenting how the study came to be. He enlisted the help of his students who got proper training as the 68 participants had to be interviewed over the course of the three weeks the trial lasted.

There was obviously some time needed to prepare the experiment and sign agreements with the participating news outlets. All in all you are looking at the result of the work of a small team across several months. But you get very country- and outlet-specific results.

My biggest takeaway from this is that such a research team would be immensely valuable to have for publishers from a certain size, but also smaller outlets could enlist outside researchers and task them with doing a specific study over the course of few months.

Not saying this study isn’t helpful for anyone, it is. It’s a great start for future discussions and experiments in any news outlet looking to figure out reader revenue. But more specific data would inform your future steps even better.

David Tvrdon

This piece was originally published in The Fix and is re-published with permission.