This is the third installment in a series exploring consumer attitudes to publishers’ digital subscription products, based on exclusive research conducted by Toolkits and NRG. New readers can sign up here to receive new data as it’s published.
- 56% of subscribers to digital publications have canceled a subscription in the past year, down from 63% who reported doing so in 2022.
- 22% expect to reduce their number of subscriptions in the year ahead, down from 29% in 2022.
- The most common reasons for subscription cancellations include lack of use and poor value for money.
- 49% of subscribers say they actively “hop around” and try many different subscriptions with the intention of canceling those they don’t get value from.
Consumers say they are less likely to cancel subscriptions to digital publications now than they were in 2022, according to research conducted by Toolkits and National Research Group. The findings suggest that consumers may be spending on subscriptions less cautiously than they were last year, when fears of a recession were more acute.
In a study of 1,007 U.S. consumers who have subscribed to digital publications, 56% said they’ve canceled a subscription in the past year, down from 63% who reported doing so in September 2023.
Looking ahead, 22% expect to reduce their number of subscriptions in the coming year, down from 29% in 2022. Thirty-two percent expect their number of subscriptions to increase or stay the same, while 46% expect it to remain consistent.
Lack of use, budgetary concerns, and price increases topped the list of reasons for canceling publication subscriptions, remaining broadly consistent with 2022. Fewer consumers reported that value for money was a reason for canceling compared with last year, suggesting publishers may be doing a better job of delivering value through their subscription offerings and/or communicating value more effectively.
The data also imply that consumers cancel subscriptions to digital publications for different reasons than for streaming services such as Netflix or Spotify. People who have canceled subscriptions to streaming services tended to do so because of cost, not because they weren’t using the service enough, implying streaming services might be more “sticky” than most publishers’ products.
Previous NRG research found that among consumers who have canceled a TV or movie streaming service subscription in the past, the most common reason was the expense. For music and podcast streaming services, 41% canceled for the same reason.
Implications for publishers
Economic conditions are influencing subscription behavior less
The data suggest that consumers are spending on subscriptions less cautiously than they were in 2022, when inflation was at its height and fears of a recession were more acute. That’s good news for publishers with subscriptions as a core part of their revenue mix, and particularly for those emphasizing their subscription businesses heading into 2024.
Publishers should tread carefully when raising subscription prices
Conversations about pricing have moved front and center for publishers as they look for ways to grow revenue per subscriber and maximize yield from their existing subscriber bases. Many are now actively exploring how best to increase their pricing and, crucially, migrate subscribers on cheap (and often long) introductory terms to more lucrative and sustainable ones. Twenty-four percent of subscribers said they’ve canceled subscriptions in response to price increases, however, highlighting the importance of a strategic approach.
New features and benefits often make for nice “hooks” on which to hang price increases and to help convince subscribers to push beyond introductory tiers and pricing. Some publishers are also experimenting with dynamic approaches to renewal pricing that seek to segment customers by price elasticity and identify at what price points different groups of subscribers are likely to churn.
Increased value perception can help minimize churn
Adding value and maximizing subscribers’ value perceptions remains the most powerful way for subscription businesses to reduce churn. Publishers are currently attempting to do so in a variety of ways: Some are bolstering their existing subscription products with new content and features, while others are launching additional offerings designed to appeal more directly to specific segments of their audiences. Almost all are exploring opportunities to market “bundles” – however they’re defined – which promise audiences greater value and cost efficiencies. Forty-nine percent of subscribers report actively “hopping around” and trying different subscriptions with the intention of canceling those they don’t get value from, highlighting the growing importance of value perception for attracting new subscribers.
Engagement remains critical for subscriber retention
The data reinforces what most publishers are well aware of: Subscriber engagement is crucial for driving retention. Lack of use remains the most common reason for canceling subscriptions, and 62% of consumers say they’ve subscribed to publications with the intention of canceling before trial periods end. As canceling and moving between subscriptions becomes easier, companies with the stickiest products and the most engaged audiences will be best positioned for success.
Methodology: Research was conducted by Toolkits and National Research Group, a global research and insights firm that works with the world’s largest content creators and marketers. The study surveyed 1,007 U.S. consumers aged 18-64 who reported having a current or previous subscription to at least one digital publication and was conducted in October 2023. The audience for this sample was weighted to reflect the pool of total subscribers to digital publications in the U.S., based on a larger market-sizing study of 6,562 consumers.