Newsletter: the downside of subscription models

Hi there!

In our previous newsletter, we asked for questions or contributions from you, our reader. We received an interesting question from Gerbert van Loenen (DPG Media) that is worth discussing here:

“We see search traffic and socials decrease. Most media are now focusing on loyal subscribers and engaged visitors. That's great. But it is also comfortable. We are getting back to our old subscription based business model.

Are we becoming complacent? Do we accept that we lose the connection with the majority of the citizens who indicate that they are not willing to pay for digital news?”

It’s an intriguing question - and one likely on many people’s minds right now.

Publications that use advertising or public broadcast models to fund their journalism remain free at the point of access to readers, but there’s hope for substantial subscription growth too.

Greg Piechota from INMA remains upbeat about subscriptions prospects, and the title of his latest research paper teases why: “There is no subscription-ceiling for news media”. When publishers align with what readers are looking for and focus on these critical points, they can build a strong force that keeps subscription numbers growing.

Bundle and unbundle

One way to build those numbers is to take a leaf out of the strategy book of Big Tech platforms: personalise, be more convenient, more interactive, bundle like social media. 

The system of bundling and unbundling can still be pursued more vigorously. DPG Media has set  a great example in bundling by giving subscribers of one of their eleven Dutch newspapers access to all premium articles of all their newspapers and magazines. In the extended reading tips of this newsletter, there's a fine example of how The Economist is doing exactly the opposite by offering young people a ‘light’ subscription.

You could endlessly continue this strategy: a subscription for a podcast, a special newsletter, a certain columnist, or all the news about your favourite football club. As long as you clearly understand the unique value you bring with such an unbundled content package and how it contributes to your mission. Part of that mission is, hopefully, to aim to reach as many people as possible.

BLOG: Attracting social natives

If you want to reach as many people as possible, you might need to start with the youth. The real innovation in journalism must, of course, take place by being there for the new generations. That's why we asked Sophie van Oostvoorn to write a guest blog.

She’s the editor-in-chief of C.Tru, a project by Belgian publisher, Mediahuis. This project takes a  deep dive into the significant misalignment between in-depth journalism with analysis and so-called social natives. She focuses on two central questions:

1. How can we effectively engage young people with quality journalism, and
2. What sustainable revenue model can support this endeavour?

BLOG: Engagement vs loyalty

If you’re focusing on subscriptions, it’s key to find an engaged audience. That is, of course, easier said than done. Smartocto can help in forming the strategy, particularly by providing suggestions through the tool on how to steer on these determining metrics:

• Scroll depth: How far the user has scrolled through a page. The deeper/further they go, the more interesting that page is deemed to be. Expressed as a percentage.
• Read depth: A more accurate representation of how far a reader has read. At smartocto, for example, read depth blends multiple metrics - such as the number of words in a piece and the average reading speed - to give a score. This results in a percentage for each page (as well as an average) showing how far a reader got through an article.
• Reading time, also known as active time or attention time: The number of seconds a visitor is active on a page.
• Page depth: This is the number of pages a visitor visits during a session. Often expressed as an average, like ‘3.45 pages per session’.
• Reactions: If a page has the option for reactions, the willingness to take the time to respond says quite a lot. Likes, shares, and reactions on social media are also included if they can be linked with the page data.

In the blog, our strategy and sales manager Miloš Stanić recommends focusing on one figure, namely the Content Performance Indicator. And he mentions something interesting, namely that perhaps it would be better to focus on loyalty rather than engagement, even though those two are interconnected at smartocto.

READING TIPS

• Let’s stay with the younger generations for a moment, as they say so much about the shifting media landscape. A recent study has shown that new media formats have special appeal to people younger than 40. Americans aged 16 to 40 are more than twice as likely to pay for or donate to email newsletters, video, or audio content from independent creators (47%) than to traditional sources like print or digital newspapers (22%). A majority of Gen Z and Millennials, regardless of race or ethnicity, pay for or donate to some type of news.
• As mentioned at the beginning of this newsletter, here's an article from Press Gazette on an initiative by The Economist to entice younger audiences to subscribe. Espresso, as they call it, launched in 2014 but has only published its audited circulation numbers since 2022, showing that it has grown 74% year on year to an average of 22k subscribers per day. For £7.90 per month, Espresso offers readers five articles per day, four longer reads per week, and a daily podcast (compared with £19.90 for the digital edition and £26.50 for digital plus print).
• Some online news publishers are broadening their business models by finding other ways to generate income besides subscriptions and advertisements through books, workshops, and educational content, as reported here  by The Fix.
• If you're thinking even further outside the box, The Fix shares another inspiring example: merchandise is helping publishers generate revenue, build engagement, and grow subscriptions. While it won’t work for everyone, where there’s a potential community to be grown (particularly around campaigns or ideas) this is certainly interesting.

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That concludes this newsletter, sparked by a question from one of the subscribers. You’re still welcome to ask questions or make comments - and we promise to respond to everything. It's great to connect with the people we’re creating this newsletter for - and anything we can do to align information with need is a win for everyone.

Best wishes,

Team smartocto