Most major publishers promoted Cyber Monday deals for their subscription products this week, but many attempted to entice new subscribers with extended promotional periods instead of deeper discounts.
For some publishers that was out of simple necessity: Having discounted so deeply already, they’re being forced to find other hooks on which to hang promotional offers. A significant number already offered months-long trials for as little as $1 in early November, for example, leaving promotional length as the next obvious variable to adjust.
On Cyber Monday (November 28) Toolkits examined the 100 most popular subscription sites among U.S. audiences and found the average promotional period offered to new subscribers was 165 days, 14% longer than the 145 day average offered on November 10.
Meanwhile, the average subscription price available to new subscribers dipped 17% on Cyber Monday to reach $0.079 per day, compared with $0.095 per day on November 10th. The dip in average per day pricing was largely a result of extended promotional periods.
Promotional pricing inches toward zero
Promotional pricing for major publishers’ subscription products has inched closer to free as the year has progressed, with publishers attempting to keep new conversions ticking over in an increasingly difficult economic climate. While few publishers in our sample currently offer completely free trials, many now charge negligible fees for new subscriptions – largely in order to collect payment information.
On Cyber Monday, 48% of publishers offered new subscriptions of various lengths for a commitment of $1 or less, and 82% offered access for $12 or less. In some instances $1 purchased 1 month of access, but in many cases it purchased 3 or 6 months. Other publishers offered 1 year of access for $10 or $12.
Deferred revenue
With promotional pricing inching toward free and promotional periods elongating, questions arise around when, exactly, publishers expect newly converted subscribers to begin generating meaningful revenue. For those using aggressive promotional offers, the hard work of selling subscriptions begins after a conversion takes place,
Some publishers may remain confident that essentially free subscriptions will convert to paid ones 6 or 12 months down the road. But as promotional periods continue to stretch further into the future, the reality is it’s getting harder to predict with any accuracy what portion of new subscribers are likely to stick around when promotional rates expire – and what price points they’re likely to tolerate.
At some point, heavily discounted long-term promotional offers cease being a smart conversion strategy and begin to look more like a house of cards, particularly during periods of economic uncertainty. The question is where that line lies, and how confident publishers are in their ability to identify it.