Presented by Matt Lindsay, president; Arvid Tchivzhel, senior director, product development; Matthew Lulay, senior director, consulting services; and Dustin Tetley, senior director, Mather Economics LLC
The COVID-19 digital effect. It’s increasing page views at a typical newspaper site — but that growth is not matched by growth in revenue.
Lesson 1: The paywall balance is swinging very aggressively toward subscription revenue rather than advertising revenue. So move your model towards getting revenue from users.
Lesson 2: The transition from print to digital is growing in momentum, pushed not just by publishers but also consumer preference.
Recent snapshot. Mather looked at data from hundreds of newspapers during the period from mid-February to mid-March and found growth in subscriptions across the board. On average, across several hundred publishers, conversions have grown about 77%. At the high end, growth was between 200% to 300%.
[More] In that same period, most publishers increased the content they offered by an average of 67%. Of the content offered, content related to COVID-19 ranged from about 15% to a high of about 40%.
Pandemic pattern. Mather found three distinct user behaviors in this first month of U.S. pandemic awareness. Arvid Tchivzhel: “Your gut instinct is that everyone is reading COVID content, but only about a third (of users) are COVID-only readers.” Another 30% read “a mix of everything,” while the remaining 25% “are trying to avoid COVID at all costs.”
Arvid Tchivzhel said it: “Be aware there are these different audiences on your sites. If you know 25% are avoiding COVID (content), you can say, hey, if you’re tired of all the COVID coverage, here is here is some non-COVID content.”
What to do with newbies. New user growth spiked 17% in this recent period, so be sure to take steps now to push them down the funnel to convert them to long-term readers or subscribers.
After the crisis. We’re likely to see something very similar to what happens when a city is hit with a natural disaster or wins the Super Bowl: You’ll see a ramp-up during an emotional time, but then we usually see a huge dip in new starts. Arvid Tchivzhel: “Anticipate that you are getting your subscriptions now while they are easy, so to speak, and then prepare for the dip.”
A pandemic retention model. Be a little more aggressive with the paywall while still performing your journalistic mission. The ones who were the first to convert will likely be the first to churn after the crisis. Shift them away from all-COVID-all-the-time to other content and app that have proven retention potential. Tell them, we’re not just covering COVID, we’re covering politics, business, etc. And be ready to deploy that tactic very, very soon.
A pandemic paywall model. What should be free? Breaking news on COVID-19 should be free. But if there is in-depth or COVID-19 content that is unique to you, put that behind the paywall. Essentially, anything that is not breaking news should be behind the paywall.
What about print subscribers? Now especially is the time to reach out to print subscribers and make sure they activate their digital account, and get them engaged in digital.
More retention data. Mather studied 200 publications from mid-February to mid-March and found an increase in web traffic leading to a subscription growth of 3.4%. Print volumes were down roughly 1%. Retention rates were around 96%, about the same as seen last year.
Size matters. Much of the digital growth is going disproportionately to bigger markets. Those with more than 25,000 digital subscribers grew by 5.8%. Those with just 1,500 grew barely more than 1%.
COVID-19 and print. The pandemic effect is just mostly amplifying trends we’ve seen over the last year or so. The smallest and the largest publishers tend to perform the best, with newspapers of 250,000 in print circulation showing the smallest decline. Matthew Lulay: “It’s the middle range of circulation size that is declining the most.”
Digital growth. Digital subscriptions have grown significantly over the past year (measuring February 2019 to February 2020). The share of digital as percentage of total circulation has moved from about 9% to close to one-quarter of all subscribers.
Cannibalization. Mather found 13% of digital subscribers were print subscribers, which means they’ve moved to a rate that is just about half of what they were paying for print. But price didn’t seem to make much difference to these shifting subscribers.
Hanging on. Digital subscribers still have lower retention rates than print subscribers, but that gap has narrowed significantly.
Dustin Tetley said it: “The declines in print have not been as severe as many (publishers) expected. There is a lot of demand for news so make sure you are evaluating pricing changes carefully.”
You asked about pricing digital. Matt Lindsay: “For digital subscribers who have been actively engaged, you can usually price them closer to print. We do a lot of A/B testing, (and find) there’s a reduction in price sensitivity after a year of engagement, and then again after two to three years. Once you get past that one-year anniversary or perhaps two, don’t be afraid to be more aggressive on pricing.”
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