The recent report on pricing by INMA shared several case studies on smart pricing from publishers. With this in mind, here are a few other details on pricing strategies and tactics working well with print and digital subscribers.
Below, we also share benchmarks on subscription pricing from our database of more than 300 newspapers. These data come from many of the newspapers we help with subscription pricing and revenue optimization. We will be releasing a quarterly industry report on subscriptions and audience revenue beginning this month.
The average monthly price for newly acquired digital-only subscriptions is US$3.16 per month and US$15.79 for hybrid (print + digital) subscriptions. Digital-only new starts are 41.6% of total starts, and hybrid are the remaining 58.4%.
Across all subscribers, including newly acquired and existing subscribers, the average rate for digital-only subscriptions is US$9.50 per month and US$29.39 for hybrid subscriptions.
Weekly churn averages 0.98% per week for digital subscribers and 0.78% for hybrid. The difference in churn rates is due to the longer tenure of hybrid customers. Long-tenured customers, those with more than two years of active subscription life, tend to churn much less than customers in their first two years.
Hybrid customers are 80.5% of all subscribers and represent 93.5% of subscription revenue. Digital only are 19.52% of total paid subscriptions, which represents a 34% increase year-over-year (YOY). Digital only subscriptions are 6.5% of total subscription revenue, a 48% increase YOY.
Average monthly rates reflect the relative maturity of these products. Digital-only subscriptions have grown significantly in the past year due to COVID-19, the 2020 U.S. election cycle, California forest fires, and other big news events in 2020. We are seeing a softening of demand now that those events are behind us, and publishers are trying to retain and monetise their new digital subscribers to sustain growth in their digital audience revenue.
Pricing strategies and tactics for digital and hybrid news products should reflect the important factors of the customer relationship: the value proposition of the product to the customer, their tenure as a customer, their level of engagement, and their willingness and ability to pay for the product.
We have found that common value propositions for subscriptions include:
We have tested a significant number of pricing tactics for acquisition, end-of-promotion offer increases, and annual increases for subscribers. A summary of a few of our recent observations and conclusions from pricing experiments are as follows:
Subscription yield management, which includes pricing strategy as well as tactics related to audience revenue growth, is a field of analysis that has very high ROI for publishers. Please reach out to us with any questions on how to improve your subscription revenue through pricing tactics.
Matt Lindsay, Ph.D. is president at Mather Economics, based in Atlanta, Georgia. He can be reached at email@example.com. Matthew Lulay is managing director and he can be reached at firstname.lastname@example.org.