Building a Better Subscription Strategy

Building a Better Subscription Strategy

Digital subscriptions are fast becoming a powerful revenue tool for publishers.

The New York Times, for example, recently reported 105,000 new digital-only subscriptions in Q3 of 2017, with digital subscription revenue rising to $86 million, a 46 percent increase from the same period in 2016.¹

Many premium publishers, including the Times, are restricting public access to all or some of their content. In the typical paywall model, only paying subscribers can access content. Still, there are a variety of subscription strategies publishers are utilizing to grow their digital subscription base.

Here are some of the most effective paywall strategies publishers are using to drive digital subscriptions.

Tiered Model
The Guardian, which grew its digital subscription base from 15,000 to 200,000 in 2016², uses a three-tier subscription model to drive readers to sign up.

The three tiers include: “Supporters,” “Partners” and “Patrons.” Supporters pay £5 per month, essentially to remove ads. Partners and Patrons pay larger monthly fees in exchange for ad-free content and other perks like subscriber-only event tickets or free books.³

To drive awareness, the Guardian has pushed the subscription options via 30 unique pop-up messages to on-site users, social media channels and email newsletters.⁴

Since anyone can access the Guardian’s content for free, the digital subscription drives value by providing an ad-free experience for readers – and, for “Partners” and “Patrons,” additional add-ons.

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“Guardian Membership is part of our focus on finding new, meaningful ways to monetise our huge audience while protecting and affirming our commitment to open journalism without building walls around our content,” said David Pemsel, deputy chief executive of Guardian News & Media.⁵

Traditional Paywalls
The New York Times allows non-subscribers to access 10 free articles per-month.⁶ This model, called a “soft” paywall, incentivizes users to subscribe by offering a “taste” of the publisher’s content, while also serving users with lighter consumption.

“We’re a general interest publication,” says Kinsey Wilson, executive vice president for product and technology at the Times. “We need to create a great experience for subscribers, but we want a great experience for people who are consuming it lightly, too.”⁷

In addition to the Times’ “soft” paywall strategy, the publisher utilizes a clever three-tier subscription model to encourage readers to become paying subscribers.

Unlike the Guardian, the New York Times does not offer an ad-free experience to subscribers, allowing the publisher to benefit from both subscription and digital advertising revenues.

Premium Niche Content
Other publishers, like Business Insider and Politico, are driving digital subscriptions by creating gated premium content for niche audiences.

Politico, a politics content provider, offers a paid edition called Political Pro, which provides additional premium content.

Politico’s premium content is laser-focused on providing unique content for government workers, lobbyists and policy analysts.⁸ By catering its content to a white-collar niche market, Politico can drive lucrative digital subscriptions.

A five-account Politico Pro subscription costs roughly $8,000 per year, up from $2,495 in 2010.⁹ Politico Pro drives nearly half of the publisher’s revenues despite only 20,000 of its 30 million unique monthly visitors subscribing.¹⁰

“There’s so much growth at the higher end that it makes more sense for us to target those customers,” said Bobby Moran, Politico’s VP and GM. “That’s not to say there isn’t a long tail. But we’re more focused on the narrow, niche audience.”¹¹

Similarly, Business Insider creates premium niche content for a small pool of subscribers.

Its 40-person research unit, called BI Intelligence, creates unique content about digital trends and behaviors. Subscriptions cost $2,500 per year and are aimed at tech and finance professionals.¹²

Paywall revenues aren’t the holy grail
While digital subscriptions are certainly showing promise for publishers, they likely won’t pay all the bills.

At The New York Times for example, digital subscriptions made up just $86 million of the $386 million total revenue in the third quarter of 2017.¹³

So while paid models can create revenue, additional revenue sources including digital advertising and print revenue appear to still be necessary for publishers to thrive in 2017 and beyond.

1. Ember, Sydney. “New York Times Co. Reports Solid Digital Growth as Print Slides.” The New York Times, The New York Times, 1 Nov. 2017.
2. Davies, Jessica. “Road to 1 million: The Guardian has gone from 15,000 to 200,000 paying ‘members’ in the past year.” Digiday. Digiday, 2 Feb. 2017
3. “Guardian Members | The Guardian Members.” The Guardian, Guardian News and Media.
4. Davies, Jessica. “Road to 1 million: The Guardian has gone from 15,000 to 200,000 paying ‘members’ in the past year.” Digiday. Digiday, 2 Feb. 2017.
5. 10, 2014 Arif Durrani September, et al. “Guardian Launches Three-Tier Membership Scheme.” Campaign: Marketing, Advertising and Media News & Analysis
6. Stulberg, Ariel. “Testing news paywalls: Which are leaky, and which are airtight?” Columbia Journalism Review. Columbia Journalism Review, 23 May. 2017.
7. IBID.
8. IBID.
9. Willens, Max. “Politico now has 20,000 paid subscribers that account for half of its revenue.” Digiday. Digiday, 17 July. 2017.
10. IBID.
11. IBID.
12. Willens, Max. “Business Insider now has a 40-person research group and 7,500 subscribers.” Digiday. Digiday, 17 May. 2017.
13. Ember, Sydney. “New York Times Co. Reports Solid Digital Growth as Print Slides.” The New York Times, The New York Times, 1 Nov. 2017.