Don’t Believe the Hype: People Are Willing to Pay for Content


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Article ImageIt’s hardly news that consumer preferences have shifted from outright ownership to paying for services on a subscription basis. The so-called subscription economy is going strong, with popular services such as Netflix and Amazon Prime boasting millions of subscribers worldwide. As of January 2019, Netflix counted 139 million subscribers, while Amazon reported 100 million Prime subscribers in April 2018. The subscription model extends to the realm of digital media, where long-standing publications such as The New York Times, as well as newer players such as The Information, have built strong subscriber bases. Nevertheless, many companies may be wondering how to build a strong subscriber base or how to retain those subscribers once they have them.

Experts assert that attracting subscribers begins with having a differentiated product. “If digital media publishers can differentiate their content and make sure that it’s unique—that it has value for people—then they’re willing to pay for it. Otherwise, if it’s just general content that they can find anywhere, it’s hard to charge for it. Publishers have to prove that they’ve got something unique that people would be willing to pay for,” says Mark Glaser, founder and executive director of MediaShift.

Robbie Kellman Baxter, founder of Peninsula Strategies, agrees and suggests that publishers look for patterns in the type of content their paying readers engage with. “You want to see what the difference is in behavior between your readers who pay and your readers who don’t pay, because often what they actually read is very different,” she says. She uses financial news as an example, saying that non-payers tend to look at breaking news and big stories, while payers tend to look at articles with more in-depth analysis or ongoing stories with an investigative approach. “You want to get really disciplined about which articles you write and which articles you don’t write. A lot of publications have stopped doing breaking news, for example, because people don’t pay for breaking news—it’s easy to come by, and it doesn’t necessarily require the depth of journalism that people will pay for,” she adds.

In order to develop a better understanding of their customers, Baxter suggests that publishers track engagement with three metrics: recency, frequency, and depth of usage. Recency, she says, refers to the last time a person engaged with a piece of content; frequency refers to how often a person is engaging with content in a given week; and depth refers to how much time, how many pages, or how many features a person is using when he or she engages with content. “If you start tracking these things, you’ll start understanding whether people are getting value out of what they’re paying for,” she says.

When it comes to retaining subscribers, experts agree that the focus should be on what those subscribers want, as opposed to the desires of other parties such as advertisers. “For the longest time, publications have focused more on advertisers or sponsors, and seen them as the main audience, in a way, the people that they’re catering to. Now they’re realizing that they need to cater specifically to their audience, and that means finding out what their audience wants, what they like, and what they want to see more of,” Glaser says. “Do they want to see [for example] more in-depth reporting, more sports—what is it exactly that audience wants? That means surveying those people, having events, making their editors available, and setting up membership services where the audience gets to have more input into what the publication is doing.”

For Jason Kint, CEO of Digital Content Next, retention has an operational component as well as delivering more value over time. With regard to the former, he says that the “direct aspect” of a subscription relationship is essential, as opposed to outsourcing to a third party. “That’s the important dynamic with what we’ve seen in the growth in subscriptions—those are direct relationships where the publication has access to the customer and their data; it’s not being channeled through Google or some other intermediary,” Kint explains.

As for delivering more value over time, Kint says that doing so shows subscribers “that you’re worth the price they’re paying.” He also notes that reinvesting is key. “When you have a direct subscription revenue stream, it’s normal practice to reinvest that revenue back into the product. Subscription offerings have two differentiators from free offerings: One is that they’ve already proven that their offering is worth paying for because people are subscribing to it; that, alone, establishes value in the mind of the audience. Then they also have that stability that comes with that direct revenue: that they can then reinvest it back into the core product and continue to improve the product,” Kint says.

Companies that started out in print may be wondering how the medium fits into the digital age. According to experts, print still serves a role, but that role has changed. Baxter notes that a lot of people simply “haven’t transitioned to digital, even when it would be more convenient for them.” However, she goes on to say that at the same time, publishers “want to be looking toward the future and asking what is special about print and how can we use print for that, rather than using it just in the way it used to be used.” For example, Baxter says that many people enjoy the pictures in print publications, and they might want to have print publications on their coffee table. “For many people, it gives you other benefits. I’d rather read the paper physically over my coffee than look at my phone,” she says.

Glaser agrees: “You have to set it apart—it has to be a really beautiful magazine, really well-designed, really eye-catching for people to want to pay.” As with so many other things in the digital age, getting and maintaining subscribers is about knowing your audience and giving them—or at least the ones who are willing to pay—what they want in the format that appeals to them.   

 


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