In this week’s Subscription Publishing Briefing:
Consumers scrutinize subscription spending more closely
As economic instability persists, consumers continue to scrutinize their subscription outgoings more closely. Cancellations have outpaced new subscriptions for digital media, food-of-the-month clubs and other subscription purchases for two straight quarters, according to data shared with WSJ by personal finance app Rocket Money. Meanwhile, a third of respondents to a December Credit Karma survey said their biggest financial mistake last year was paying for services they never used, WSJ reported.
Consumers are continuing to pull back their spending across the board, however, not just on subscription products and services. And tools such as Rocket Money that promise the ability to find and cancel subscriptions on consumers’ behalves have vested interests in these results, of course.
Nevertheless, it’s clear that consumers consider recurring payments more closely than one-off expenditures when looking for easy opportunities to save money, particularly for services they may use infrequently. A growing number of people are undergoing “subscription cleanses,” by canceling their subscription portfolios entirely before adding back those that they miss or need. Some businesses are taking a similar approach, with many moving toward “zero-based budgeting” that requires expenses to be justified and approved on a regular basis.
As a result, some publishers say they’ve seen an uptick in “boomerang” subscribers in recent months as customers dip in and out of paid subscriptions on a more frequent basis. It’s not uncommon for some subscribers to rekindle subscriptions multiple times a year, they say, while others appear to bounce backward and forward between their products and those offered by other publishers.
During difficult periods the most powerful retention driver for publishers remains the ability to deliver high-quality, differentiated products on a consistent basis. Those unable to do so may find themselves in difficult situations as discretionary spending continues to contract and “nice to have” products quickly become easy cost-saving opportunities in subscribers’ eyes.
But even for publishers with high-value subscription offerings, many publishers report that increased flexibility and maintaining close relationships with former subscribers is helping to maintain their subscriber bases and revenues as consumers are forced to make increasingly difficult choices about where and how they spend their dollars.
Personalized onboarding boosts retention for The Washington Post
The Washington Post overhauled its subscriber onboarding process in the fall of 2022, which the company says has resulted in a 2% lift in subscriber retention and an increase in customer lifetime value.
The new approach is designed to deliver more personalized experiences to new subscribers based on their preferences and behaviors, according to the company’s head of lifecycle marketing, Anjali Iyer. It combines on-site elements and automated emails to deliver tailored messages to users based on their individual actions, with the intention of boosting engagement and value perception in the early days of users’ subscriptions. The next iteration will expand to add on-site and in-app messaging to the mix, Iyer added.
Successful subscription-based publishers understand that their efforts to retain subscribers must begin immediately after initial signup or purchase and that a critical first step in effective subscriber retention and churn mitigation is a robust and carefully considered onboarding strategy. Our guide to onboarding subscribers provides suggestions for how publishers can establish onboarding priorities, and details tactics and approaches that can be used to help boost subscriber engagement, retention and revenue.
Five themes shaping subscription publishing in Q2
Publishers say they’re cautiously optimistic about the second quarter, but new headwinds and challenges loom on the horizon.
Our Subscription Publishing Snapshot report explores the key themes we expect will shape subscription publishing in the months ahead, and contextualizes the news and events that defined subscription publishing in Q1.
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:
- “Newsletter companies” are recasting themselves as plain old media companies as the hype around email-based content products begins to fade. That often means expanding into events, video, podcasting – and even good old-fashioned websites and apps – as they look to engage and monetize audiences beyond the inbox.
- IAC’s Barry Diller says publishers should sue companies using generative AI to repackage their content. Media companies should band together to take on large language models like ChatGPT and assert their copyrights in court, Diller said. As we’ve covered previously, publishers’ subscription products could be at risk of being undermined as some chatbots appear to reach beyond paywalls to surface subscriber-only information in their responses.
- Bloomberg Media’s move to cut advertising technology companies from its properties is part of a pivot toward an “audience-first mentality.” The publisher is also placing greater emphasis on subscription revenue.
- Advertising sales teams should focus their attention on their most important clients and deprioritize the rest, according to INMA’s advertising initiative lead.
- The New York Times was one of eight top-ten publisher sites that saw a fall in traffic in March, according to data from Similarweb.