The average promotional price for major publishers’ subscription products dropped 16% from June to July, research by Toolkits found.
Toolkits reviewed the 100 most popular subscription sites among US audiences and observed that the average subscription price available to new subscribers in July was $0.064 per day, down 15.8% from an average of $0.076 per day in June. (The length of access offered at promotional prices varied between publishers.)
The decrease in subscription pricing comes as many consumers and businesses attempt to rein in their spending, and as most businesses increase prices in line with ongoing inflation.
Explanations for the decrease could include:
Many publishers in our sample were offering “limited time” sales and other promotions when their sites were analyzed in both June and July. Aggressive promotional pricing is now common during the summer months as publishers attempt to offset reduced demand caused by seasonal behavioral trends. Traffic to publisher sites – and engagement with digital content in general – typically softens from June-August. Average pricing could increase in September and beyond if publishers opt to alter or end current promotional rates.
Changing audience expectations
As audience behaviors and expectations change and evolve, publishers are adapting accordingly. Heavily discounted subscription trials and introductory offers are now commonplace across publishers’ sites, and audiences now broadly expect to sample subscription products at attractive rates. (75% of large publishers offered discounted trials in June and July.) For publishers, that means the hard work of “selling” a subscription now begins after a conversion takes place, and those that don’t offer attractive introductory rates may find themselves at a significant conversion disadvantage if close competitors do.
A focus on lifetime value
Publishers are increasingly optimizing for subscriber lifetime value and placing less emphasis on the revenue generated in the first few months – or even years – of a subscriber relationship. Some publishers in our sample lowered the price of their introductory offers in July but raised the prices of post-trial renewals, presumably to accommodate cheaper pricing in the initial months of a subscriber relationship without a significantly decreasing LTV.
Longer-term price reductions
Seasonal promotions aside, some publishers may be lowering their subscription prices on a more permanent basis, perhaps in an attempt to combat slowing conversion rates or to find price points that better reflect audience demand for their products and content.
We’ll continue to track pricing trends as the year progresses. If you find value in this type of data, please let us know what you’d like to see more of by filling out this short 4-question survey. Benchmarks for subscription pricing and tactics are difficult to come by, but we hope to provide more data-driven insight into broad market trends based on what’s most useful for our community.