In this week’s Briefing:
Local publishers need an ARPU boost
Many local and regional publishers have built meaningful digital subscriber bases in recent years, but the sustainability of their business models may now hinge on the ability to generate significantly more revenue from those existing subscribers given the limited size of their addressable markets.
Local publishers aren’t alone in their desire to grow average revenue per subscriber (ARPU.) As their subscription businesses mature and move beyond the land-grab growth stage, subscription publishers across the board are now attempting to inch up pricing and maximize yield from their subscriber bases. Most began the year reorienting their operations around monetization as opposed to raw subscriber growth, and those efforts will kick into overdrive heading into 2024.
Local publishers may face more acute ARPU needs, however, given inherent limits to the size of their addressable audiences. For those that have already achieved significant penetration in their respective markets, revenue growth can essentially be found in one of two ways: expanding coverage to appeal to readers in broader geographic areas, or convincing existing subscribers to pay more. The latter is far more scalable.
Recent data from Mediahuis-owned subscription analytics firm Mather Economics highlighted this challenge for publishers across North America. As revenue from print circulation declines, local publishers must essentially double their digital subscriber revenue over the next two years in order to maintain their topline revenues. For the reasons detailed above, ARPU growth will therefore become increasingly essential for the sustainability of local publishing businesses and will likely be prioritized heading into 2024.
The Economist moves podcasts behind its paywall
The majority of The Economist’s podcast content will be reserved for paying subscribers from October, the company said last week. Every podcast, with the exception of the Economist’s flagship daily show “The Intelligence,” will be placed behind a paywall and accessible via its owned and operated websites and apps (in addition to other platforms that support subscriber-only podcast access.)
Audio content will be available to fully-fledged Economist subscribers, but also to subscribers to a new dedicated podcast tier called Economist Podcasts+. That product will be sold at $4.90 per month or $49 per year in the U.S., the company said, although a first year is currently being offered at $24.50.
The move appears to be a logical one for The Economist. The $5 price point will likely be palatable enough to convert a meaningful chunk of its existing podcast audience, and it could create an effective gateway and mechanism to help push listeners toward print and digital subscriptions.
As we’ve explored previously, publishers are increasingly breaking apart subscriber-only features and positioning them as discreet standalone products. That’s helping them to maximize perceived value among existing subscribers, better serve the needs of specific pockets of their audiences, lower barriers to entry for new subscribers, and open up opportunities to market premium “bundles.”
Asking readers for coverage ideas could help boost subscriptions
Asking readers for story ideas can help news publishers grow subscriptions and improve audience perception, according to new research.
A study by Natalie Jomini Stroud, a professor in the communications department at The Moody College of Communication at the University of Texas at Austin, and Emily Van Duyn, an assistant professor at the University of Illinois Urbana-Champaign, looked for a causal relationship between “engaged journalism” and economic and audience support for newsrooms.
The researchers found that publishers that asked for reader input on which stories they should pursue received 1.75 more new subscriptions per day compared with those that didn’t. That increase is significant relative to the daily average of 2.27 new subscriptions observed during the study.
“By providing a service that answers questions posed by audience members, audiences are more likely to reciprocate through subscriptions,” the researchers said.
Also worth noting:
- Benchmarking data from 100 subscription businesses: Exclusive data, insights and trends gleaned from a survey of over 100 US and UK subscription executives. Download the report for predictions from thought leaders in media and publishing and exclusive analysis from Minna and FT Strategies.
- The Atlanta Journal-Constitution intends to grow its digital subscriber base eightfold by the end of 2026 to reach 500,000 subscribers. It has around 60,000 subscribers today. The ambitious target will be reached, the company hopes, by investing in new subscriber-only products dedicated to sports, Black culture, Southern cooking and politics, and by expanding into new markets across the Southeast with the hire of 100 new staffers in cities across Georgia.
- Streaming media customers are highly receptive to adding other products to their subscriptions to form bundles, according to EY’s new Decoding the Digital Home study. EY surveyed consumers about their likelihood of subscribing to a streaming service with additional products and services and found the greatest interest was in shopping discounts, while 45% expressed interest in a bundle of more than one streaming service. Respondents also said rising costs were the primary reason for subscription cancellation.
- The Daily Mail says its digital subscription product Mail+ has become a “substantial” revenue stream. The digital magazine product has more than doubled its paying subscriber base over the past three years, despite the fact the same content is available for free via the Mail Online website.
- When paying for local news products, subscribers do so to support their existence, to have their concerns heard, and to be connected with like-minded people, according to audience research by BlueLena. What don’t readers want? Branded merchandise, swag, or other physical items.
- Future’s new CEO, Jon Steinberg, says growing its digital subscription business is “top of mind” for the company.