Highlights this week:
- Publishers experiment with automated paywall decisioning.
- The Information launched a second subscription product oriented around data and research.
- Increasingly complex subscription renewal laws are causing compliance headaches for publishers.
Publishers experiment with automated paywall decisioning
Many publishers have gravitated towards “freemium” subscription models in recent years, opting to reserve specific portions of content for paying subscribers while leaving the remainder freely accessible or subject to meters and/or registration walls.
Other publishers continue to take a more ad-hoc approach, however, with editors making case-by-case judgment calls on which articles to place behind paywalls, typically based on whether they believe specific pieces of content are more likely to drive subscription conversions or page views. Unsurprisingly, this approach has put editorial departments in difficult situations – sucking up their time and focus, and often creating conflicts and perverse incentives.
Now, some publishers are turning to automated technology in an attempt to remove paywall decisions from editorial teams’ hands. Australian news publisher The West Australian says it now runs natural language processing on every article it publishes, for example, in order to predict whether articles are likely to generate more revenue from advertising or subscriptions. Its technology, powered by Sophi, automatically places content behind paywalls or leaves it unlocked based on its conclusion.
The publisher said it’s seen a dramatic increase in the number of subscribers it’s acquired with automated paywall decisions versus the human-powered system it had in place prior. In essence: Algorithms have proved better at making revenue-based decisions than editors, on average. “It took the guesswork out of some of the stories that we locked or unlocked,” said David Johns, The West’s online editor.
Whether publishers should make case-by-case decisions on which content to paywall is open to debate. While the approach can prove effective for driving subscriber conversions in the short term, some suggest it risks confusing and alienating audiences in the long run, and that it places publishers’ commercial interests before those of their audiences and subscriber bases. Nonetheless, for publishers that intend to continue making paywall decisions at the article level, removing those decisions from editorial teams could add efficiency and help mitigate conflicts of interest or messy incentives for editorial teams.
Publishers grapple with increasingly complex subscription renewal laws
Operating subscription products legally in the U.S. is becoming more challenging as states across the country pass new laws and amend existing ones to regulate subscription businesses more closely. The growing patchwork of laws and regulations is proving increasingly complicated for publishers and other companies to navigate, and some are finding themselves potentially exposed to legal action as a result.
States have stepped up their scrutiny of subscription models in recent years, specifically around automatic renewal charges and the provision of free trials. At least 20 states now have laws in place regulating subscription models, but local legislatures continue to pass new laws and revise existing ones.
“States are imposing more granular requirements around subscriptions and it’s likely we’re going to see more states with laws on the books,” Julie O’Neill, a partner at law firm Morrison & Foerster who specializes in consumer protection compliance, told Toolkits.
With subscription products gaining prevalence, legal experts say they’ve seen a notable increase in class action litigation targeting auto-renewal law violations in recent months. Companies selling products on a subscription basis are finding themselves under increased scrutiny, including publishers and media companies.
The Information launches a second subscription product
Business and technology publication The Information launched a new subscription product called “Pro”, which it says will provide access to data, org charts, survey results and other resources for “professionals who need non-public resources to excel at their jobs.”
The majority of The Information’s editorial output is only available with a subscription, for which it currently charges a sticker price of $399. The new “Pro” tier will provide access to all of the company’s editorial coverage and the additional resources for $999 per year.
The Information’s chief executive, Jessica Lessin, said the product is intended to provide access to high-quality, verified data. “Numerous services—often specialized by vertical—are charging astronomical fees for access to data that does little to help those customers stand apart. And often, the data isn’t accurate,” she wrote, adding, “Over the years, we’ve built out our own tools based on something in too short supply: careful reporting with trusted and vetted sources. Those resources are what we are starting to share with you today.”
Business publishers offering high-priced data products is by no means a new phenomenon, but subscription publishers are increasingly exploring opportunities to offer additional paid products designed to serve more specific segments of their audiences – often at premium price points. Some, such as The New York Times, are breaking apart and repackaging existing subscription features – moving away from broad, catch-all products and instead offering multiple subscriptions designed to service the needs of more targeted and granular audience segments. Others such as The Information are layering new high-priced products on top of their existing offerings. We expect to see more publishers bringing multiple subscription products to market over the next year or two.
How Stat approaches subscription products
If you haven’t already, check out my conversation with Stat’s chief operation officer, Angus Macaulay, on the latest episode of The Subscription Publishing Show. Stat covers pharma and life-sciences news, and Angus and I discussed the company’s push into high-priced data products, why it opted to build much of its subscription technology in-house, and whether economic instability could present an opportunity for publishers that deliver indispensable content for professional audiences.
Also worth noting:
- Subscription businesses lose money when they acquire new customers, and might make money if they keep them. That was the key takeaway from a new report on membership economics published by Manifesto Growth Architects.
- Subscription models for local news are challenging to sustain in the U.K. Belfast Telegraph and Highland News and Media are bucking the trend, according to Press Gazette.
- Gannett said it grew its digital subscriber base by 24% in 2022 to reach over 2 million paid subscribers, but demand for its advertising products remains shaky.
- Netflix is cutting its subscription prices in several smaller markets as households continue to curb their discretionary spending and competition for their dollars intensifies.
- Restaurant chains are increasingly experimenting with subscription models in an attempt to drive steadier revenue and more frequent customer visits.