Many publishers and media companies have employed aggressive subscriber retention techniques and cancellation policies in recent years in an attempt to maximize their revenues, with some making it intentionally difficult for customers to end or alter their subscriptions.
Laborious cancellation processes, confusing terms and conditions, and the use of dark patterns may all have helped combat subscriber churn in the short run. But as consumers become increasingly familiar with subscription models and their dynamics, their patience with such tactics is wearing thin.
Spurred by those frustrations, regulators and lawmakers in various global markets are now proposing or enforcing new rules and requirements specifically targeting subscription-based businesses. Meanwhile, a growing number of people are taking matters into their own hands with the use of tools that help them track and manage their subscriptions more closely and — in some cases — cancel subscriptions on their behalf.
Media companies are now being forced to respond and adapt as greater control is placed in consumers’ hands and it becomes clear that trapping them in unwanted subscriptions will not prove a viable long-term strategy. That includes:
- Streamlining cancellation flows and mechanisms to meet regulatory requirements and consumer demands.
- Providing more subscription options and enabling customers to “right-size” their plans.
- Offering greater billing control and flexibility to allow customers to specify how and when they’re charged.
- Taking a longer-term view of lifecycle management as it becomes clear that more consumers dip in and out of subscriptions.
Regulators worldwide have increasingly directed their attention to companies’ subscription practices over the past year.
In the United States, click-to-cancel mechanisms look set to become an unavoidable requirement as the Federal Trade Commission seeks to formally mandate that companies “make it as easy for consumers to cancel [subscriptions and trials] as it is to sign up.” The FTC proposed a rule in March 2023 that would require companies selling subscriptions to offer straightforward self-service cancellation mechanisms, stating: “If you can sign up online, you must be able to cancel on the same website, in the same number of steps.” The public comment period on the proposal ended in July, and legal experts expect the rule to take effect regardless of objections, given the FTC’s efforts to crack down on deceptive subscription practices generally.
In the United Kingdom, the Digital Markets, Competition and Consumers Bill seeks to reform local laws to protect consumers from practices including “subscription traps.” Proposed rules would require companies to allow consumers to end a subscription contract in a single communication – and mandate that consumers must be able to end subscription contracts entered into online in the same way (with easily accessible instructions for how to do so). The rules also grant consumers the right to cancel all subscription contracts (whether entered into online or otherwise) during an initial 14-day cooling-off period.
In France, a new decree requires that businesses allow consumers to cancel subscriptions and contracts online in three clicks or fewer. The rules mandate that businesses offer self-service termination functionality to all consumers on their websites and mobile applications, regardless of how a subscription or contract was initially entered into. They also state that businesses cannot require consumers to create accounts or volunteer personal information to access termination features, other than that necessary for termination.
Consumers take control
Adding to the regulatory pressure, consumers are also looking for ways to gain tighter control over their subscription spending, which is fueling the adoption of third-party tools and technologies designed to help them do so.
Some are using dedicated tools to help them track and manage their subscriptions more closely and, in some cases, cancel subscriptions on their behalf. Meanwhile, banks, credit card companies, and other financial institutions are increasingly incorporating subscription management tools into their consumer-facing products. They often present data about subscription spending in customers’ online accounts and enable them to cancel subscription payments without dealing directly with publishers and other merchants.
Subscription leaders at major media publishers and media companies say this growing trend of “off-platform” cancellation is among their key concerns for 2024, particularly in Europe where the availability and use of such tools are more advanced.
Threat or opportunity?
Some publishers hope that tighter regulation and consumer scrutiny of cancellation practices will ultimately help them grow subscription revenue in the long run. If consumers trust they can easily cancel a subscription when desired, they might be more likely to subscribe in the first place, the thinking goes. Recent Toolkits research found that two-thirds of U.S. consumers say they would be more likely to subscribe to digital publications if the process of canceling subscriptions were easier, perhaps lending credence to that theory.
Clearer signals around subscribers’ value perceptions might also prove useful for helping publishers improve their subscription offerings, tailor their content more effectively to subscriber interests, and optimize their pricing strategies and marketing approaches. No subscription business likes churn, but implementing easier cancellation processes may grant them greater visibility into who finds value in their products and why.
Perhaps most importantly, tighter restrictions could also help publishers better align their business practices with their purported editorial values. Publishers go to great lengths to position their editorial output as trustworthy, transparent, accurate, and accountable, but they often overlook those sentiments when it comes to their subscription practices and policies. Aggressive and misleading subscriber acquisition and retention approaches risk damaging publishers’ editorial credibility, and that risk is particularly pronounced for news publishers whose subscription offerings are frequently oriented around access to trustworthy reporting, unbiased journalism, and accountability to their audiences.
How publishers are responding
Major subscription-based publishers and media companies are now being forced to respond to the demands of consumers and regulators and make their cancellation processes more transparent, flexible, and consumer-friendly.
Power and control are returning to consumers, and publishers are reworking their approaches to cancellation entirely as their subscription businesses mature and long-term customer loyalty becomes increasingly important for the sustainability of their businesses.
Streamlined cancellation flows and mechanisms
Many publishers are updating their cancellation mechanisms to ensure they satisfy new and proposed regulations – or at least recognize their spirit and intent.
Some have replaced complicated policies and multi-step processes with simpler, more customer-friendly ones, while others have added additional self-service online cancellation options alongside their existing chat or phone-based options. Generally speaking, the cancellation flows utilized by major publishers are now far simpler, more direct, and less convoluted than they were a year ago.
“The increasing regulatory pressure means it’s even more important that we step up to meet consumer needs. Our customers want transparency and the flexibility of a contract type that suits them, so it’s our responsibility to ensure our customers don’t feel ‘trapped’ into subscription cycles they don’t want,” said Fiona Spooner, managing director of consumer revenue at the Financial Times.
The FT is currently enhancing its cancellation journeys to make it “as easy as possible for customers to cancel, pause, and renew their subscriptions,” Spooner added.
Publishers also hope that implementing more transparent and consumer-friendly cancellation mechanisms will help breed trust and credibility with audiences, and ultimately serve their own best interests in the long run by better aligning their business practices with their editorial promises around transparency and trust.
Satisfying online cancellation requirements doesn’t mean removing choice. Although publishers are offering more straightforward cancellation mechanisms, many say they’re maintaining flexibility for customers to interact with them on their own terms. That might mean offering subscribers the opportunity to pause subscriptions for a period without losing their accounts or data or enabling those who want to discuss their subscription terms via chat functions or other means to do so.
“All these regulations are designed to put the customer first and to give them the ability to choose, so we’re really focusing on how we give consumers that choice,” a subscription head at a major U.K. news publisher said. “Not all of our customers want to only have a one-click cancellation option: some of them do want to have a conversation. So we’re really exploring how to meet subscribers on their terms and not limit them to blunt instruments.”
The New York Times employs a similar approach with its cancellation mechanisms, offering “several ways to cancel”, including via online chat, phone, or canceling online via a three-click process. It also allows customers to pause their existing subscriptions and – for those who aren’t subscribed to its “all-access” bundle – to replace their current subscription with another product in its roster instead. (For example, to replace a News subscription with Cooking or Games instead.)
Personalized cancellation experiences
Publishers are investing more heavily in segmentation and personalization, and some say that putting data to work during cancellation flows has become a priority. Without the advantage of multi-step cancellation processes and forced customer service interactions to depend on, publishers must consider how they can present the right retention offers to consumers at the right time before or during cancellation.
That might involve tailoring experiences and offers to specific segments of subscribers based on variables such as their content consumption, tenure, lifetime value, monthly recurring revenue, and the number of times they’ve been “saved” from canceling previously.
Personalized offers and experiences are powerful for driving new conversions and registrations, publishers say, and now similar consideration is being given to how personalized cancellation experiences might help drive retention.
In light of new and proposed regulations, publishers may be limited to a single save offer that consumers can accept or reject before a cancellation must occur. If they have one opportunity to save a subscriber, they need to be confident they’re pitching the right offers.
Rethinking retention goals
Shorter, sharper cancellation flows are driving publishers to carefully consider what their retention efforts are optimized towards. As publishers look to grow their average revenue per subscriber, some are moving away from approaches that allow subscribers to effectively name their prices when threatening to cancel.
Some are now taking a more disciplined approach by setting price floors and optimizing to keep only subscribers who meet minimum revenue requirements on board, rather than simply optimizing for minimal churn.
For publishers who serve international subscribers, there’s also the thorny issue of whether they should offer localized experiences for users in different markets or take a one-size-fits-all or lowest-common-denominator approach that may or may not technically satisfy all rules and requirements.
Operating subscription products legally across the U.S. has become more challenging in recent years as states pass new laws and amend existing ones to regulate subscription businesses more closely. Complying with stronger FTC requirements could enable publishers to adopt a simpler, uniform approach — at least in the U.S.
However, some publishers are opting to take more dynamic approaches where subscribers are served tailored experiences based on their location. This might enable them to be more aggressive in some markets while ensuring they comply with local rules in others – such as those enforced by the state of California or in European countries such as France, Germany, and the U.K.
The exact approaches publishers take will vary based on the nature of their products, the location of their audiences and subscribers, access to resources, and their risk tolerance.
“Right-sized” subscription options and plans
The adoption of easier self-service cancellation mechanisms is helping to accelerate publishers’ move toward more flexible subscription products and plans. That’s enabling them to offer subscribers a middle ground between “subscribed” and “canceled,” and helping them retain paying relationships with consumers as a result.
As Toolkits has reported, publishers are increasingly breaking apart and repackaging existing subscriber features and positioning them as standalone products – moving away from broad, catch-all products to instead offer multiple subscriptions designed to service the needs of more targeted and granular segments of their audiences.
Publishers primarily designed this approach to help initiate paying relationships with larger portions of their audiences by offering clearer value propositions at lower price points, but it’s also helping to boost retention by enabling subscribers to choose the commitment levels that are right for them.
“We’re increasingly thinking about how we can give power back to consumers and allow them to right-size their own subscriptions. The ability to downgrade and upgrade more seamlessly is on our minds and on the horizon,” said a lifecycle manager for a major U.S. news publisher.
Bloomberg Media’s chief product officer, Julia Beizer, refers to the tactic as “skinny bundling.” “More publishers will experiment with new bundles to capture audiences that don’t need or want the full offering in 2024,” she predicted.
More targeted subscription products
The New York Times has led the charge on targeted subscription products, which has also opened up opportunities for rightsizing. Once upon a time, news, cooking, crosswords, and sports all featured in a broader “product” known as a newspaper, but as it has shifted to digital, The Times has succeeded in repositioning each of those features as discrete products in consumers’ minds. That’s enabling it to sell single products to consumers before encouraging them to upgrade to broader all-access bundles, but it’s also helping to retain subscribers by enabling them to downgrade to single-product plans and to transfer their subscriptions between products instead of canceling them entirely.
The Economist is employing a similar approach and launched a dedicated podcast-only subscription in October called Economist Podcasts+. The move was designed in part to attract new subscribers who might not be ready to commit to a full subscription, according to the publisher’s global head of customer, Claire Overstall.
“There’s a whole audience there that for whatever reason enjoy our journalism but don’t want to pay the full $20 a month to subscribe… we’ve decided that you can buy a podcast-only subscription in the hope that might entice some of those millions of listeners who don’t want to pay for the full-fat product to support our journalism through paying for podcasts,” she told Digital Content Next.
But when canceling that “full-fat” product, subscribers are invited to downgrade instead to either Podcasts+ or its Espresso product — a mobile app and newsletter promising “quick daily updates on the world’s most important issues.”
“There is a business benefit to upselling of course, and moving from one product to another, but also down-spinning; if people no longer have the time or the money for the full-fat products, having somewhere for them to go,” Overstall added.
Other publishers are following suit, repackaging existing subscriber-only content and features into standalone products or adding new subscription tiers targeting the needs and interests of specific audience segments.
“We’ve already been putting plans in place to meet a diverging set of consumer needs by having a broader range of packages and subscription types and making it easy to move between them,” said the FT’s Spooner.
Lightweight subscription options
While some publishers are carving off portions of content and offering access to them at lower price points, others are experimenting with more consumption-based approaches. Although the majority of major publishers remain skeptical of “micropayments” and charging for single-article access, a growing number now say they’re exploring opportunities for lightweight or “pay as you go” offerings that sit somewhere between a one-off transaction and a full subscription.
The Washington Post has experimented with a product it calls “Limited Pass”, for example, which offers access to a limited number of articles per month for a nominal financial commitment. Readers in the U.K. have been offered access to 4 articles per month for a price of £1 every 4 weeks.
The company’s newly-appointed CEO, Will Lewis, says he believes news publishers must evolve beyond simple subscription models to attract new generations of readers because the current subscription model is “creaking.”
“If you want to attract people that don’t have a propensity to take that kind of monthly subscription, which is most young adult Americans, it’s going to be on the news industry to design a new way of allowing them to access our journalism. There’s very positive evidence of how news can be accessed and paid for in more innovative ways. There are day passes that are successful, there are week passes, and there are models like the Guardian where you can make donations. So there’s a whole new generation of paying user concepts. I’m pretty excited about it. I think it’s newsroom 3.0,” he told Semafor.
Low-commitment offerings might serve as effective on-ramps for new subscribers, but also as an attractive downgrade option for subscribers who might be concerned they’re paying for more than they use with full subscriptions. And although many publishers are doing everything they can to push subscribers to longer-term commitments and plans, some may find that portions of their audiences prefer the flexibility that comes with shorter subscription terms and plans billed on a monthly or even weekly basis.
Moving between products and plans
As publishers offer more subscription products and plans, the ability for subscribers to move seamlessly between them as their needs and preferences change and evolve is essential.
Self-service cancellation is quickly becoming an expectation, but more publishers are also offering the ability to quickly and easily alter their subscriptions on the fly without laborious customer service interactions or lengthy change processes. Consumer sympathy and understanding for constraints and limitations posed by publishers’ technology and systems will diminish as a result, and flexibility and ease will quickly become competitive differentiators and, ultimately, an expectation.
The ability to quickly move between products and plans will play an increasingly important part in publishers’ broader subscription strategies as they begin to take a broader view of lifecycle management.
Greater billing control and flexibility
Lack of control and flexibility is one of consumers’ top complaints about publishers’ cancellation practices. Offering subscribers greater control over when and how they pay can help reinforce the perception that subscribers are in control of their relationships with publishers, and ultimately help publishers build stronger, longer-term relationships with subscribers.
Offering customers the ability to pause subscriptions instead of canceling them is quickly becoming standard practice for subscription businesses. In addition to placing greater control in the hands of consumers, publishers say pause functionality provides tangible benefits to their businesses, including:
- Increased retention: Publishers that offer pause functionality say its ability to mitigate cancellations is evident. In some cases, subscribers may face temporary changes in circumstances or financial constraints – or may simply wish to gauge how much they’re engaging with a subscription before canceling it entirely. The ability to pause and resume subscriptions offers publishers the opportunity to demonstrate the value of their products before cancellation, and some may even opt to provide continued access during a subscriber’s paused period to promote ongoing engagement.
- Retained data: Paused subscriptions allow publishers to retain customer data and preferences during any subscription hiatus. The ability to seamlessly pick up where they left off may make customers more likely to resume a subscription, and continuity also has benefits for publishers in terms of understanding customers’ behavior across their properties. Instead of creating new accounts if and when they decide to resume a subscription, publishers benefit from the simplicity of keeping audience members’ activity tied to single accounts.
Subscriber-selected billing dates
Subscribers have different financial situations and preferences, and allowing them to choose or modify their billing dates makes it easier for customers to align payments with paydays and other financial obligations. Some customers may also prefer to manage their finances on specific days of the month, and allowing them to align billing dates with their budgeting cycles may result in fewer unwanted surprises when it comes to recurring payments. Allowing subscribers to choose billing dates also reduces the likelihood of failed payments and can help reduce involuntary churn.
Hiding or disguising charges from subscribers is no longer a viable retention strategy, and is one of the reasons consumers are increasingly gravitating to subscription management tools that help identify recurring charges.
A longer-term view of lifecycle management
As canceling becomes easier and publishers offer a growing array of subscription products and plans to consumers, publishers say their approaches to lifecycle management are evolving.
Definitions of “subscribed” and “non-subscribed” are becoming more nuanced as it becomes increasingly clear that large portions of publishers’ audiences will have intermittent paying relationships with publishers that fall somewhere in between those two states. Meanwhile, the concept of lifecycle management itself is increasingly broadening to factor in revenue from other sources and create a more holistic view of individuals’ commercial relationships with publishers’ brands.
Ultimately, publishers say there’s a growing acknowledgment that large portions of their audiences will dip in and out of subscriptions over time as their needs and interests change, and it’s in their best interests to embrace that reality rather than fight against it.
“I think with the regulatory changes that are happening there will be a change in consumption habits from long-term subscriptions of 12 months and up, to potentially more frequent but shorter types of subscriptions. I think people still want to commit for a period, but just not for as long as they might have previously,” said the U.S. publisher lifecycle manager.
From a tactical standpoint, this shift is driving publishers to think more carefully about the ways they interact with audience members in between subscription stints and when they move around between different products, tiers, and plans – whether paid or unpaid. Some publishers say their definitions and approaches to churned subscribers are becoming more nuanced, and that post-subscription engagement is becoming far more sophisticated than simple win-back campaigns and offers.
“We’re increasingly grappling with the state of churned subscribers and what benefits and entitlements we give them after they leave. Do we let them continue to sample the product? Do we tease them with access to enough content to keep them as warm as possible?” said the U.K. news publisher subscription head, adding, “You could have a very strict line designed to retain as many subscribers as possible at cancellation, or you could loosen it and think about the lifecycle more broadly to ensure they’re the warmest possible rejoiners when they come back to you.”
This blurring of the lines between subscribed and non-subscribed states makes sense for the way consumers expect to interact with publishers and their content, but it’s not easy for publishers to build businesses around. Some say that more flexible approaches to subscriber relationships are proving difficult for some in their organizations to understand. Given the financial challenges facing many publishers, the ability to make long-term decisions at the expense of short-term revenue is also a luxury available to relatively few.
Even simple changes such as pause functionality aren’t easy to get buy-in for if they risk delaying revenue.
“It was really hard to convince our CFO about pause functionality because he kept saying, ‘Hey, it’s lost revenue,’” said the U.S. news publisher subscription head. “Yes, it’s lost revenue for a particular month, but the likelihood of them coming back and restarting their subscription is high, so it’s a short-term versus a long-term view.”
Shifting internal mindsets to accommodate greater flexibility and subscriber control might be difficult, but as new regulations and tools increasingly put power back in the hands of consumers, publishers will have little choice but to meet subscribers on their terms.
Increased consumer control will be an important theme for publishers’ subscription efforts in the years ahead, and how publishers respond to it could have significant implications on the long-term health and sustainability of their businesses.
As audiences’ relationships with digital publishers and their products shift and evolve at a quickening pace, publishers that are positioned to pivot and adapt quickly to their changing needs and expectations may be best placed to succeed.