The drop in print advertising revenue has led to a sink-or-swim environment for publishing organisations. For companies who publish niche or specialist titles, the opportunity to implement a high-value subscriptions strategy has never been more tempting, and is generally seen as a good way to futureproof revenue…for now, at least.
At last week’s PPA Festival, Steve Newbold, Centaur’s Divisional MD chose to tell a story of one brand whose approach stood out as being particularly bold.
Centaur were facing challenges, running in siloes over fifty brands in a primarily controlled-circulation publishing environment. A decade ago, the company was forced to think about moving forward because of an increasingly stormy industry.
They decided to invest more money into research, understanding customers and product development, which in turn helped boost the individual brands.
The Lawyer is one of Centaur’s specialist brands, and over the past few years, has undergone a significant transformation from a free site and circulation magazine into a paid-for subscriptions product, including dropping from a weekly to a monthly print magazine last month.
Like many magazines of the time, what made The Lawyer profitable in the past was its recruitment advertising, which saw a steep 75 percent decline in profits in 2013. Newbold explained that it was the kick they needed to realise that they had to change.
“We decided to do the biggest piece of research we’d ever conducted…to really try to understand how to meet our customer’s needs.
“We were sending 15-20,000 copies of the magazine out to top firms, private practices, law firms, partners and senior people, but all our money was coming from the lower end of the chain from suppliers and groups trying to reach that audience. We weren’t getting any money whatsoever out of that top end.
“The research showed that there was an opportunity for The Lawyer to move more towards an information service. It was very clear that the readers of our magazine and our website really valued the news, analysis and data which we were running under the brand.
“Our new strategy was to say, ‘through digital and through internationalising, we can be a market leader and move ourselves towards a high-value subscriptions business where we’re no longer reliant on advertising.’”
The move paid off. The Lawyer has gone from having no subscriptions revenue at all in 2013, to now having almost a third of its total revenue from paid-for subscriptions: around £2.2 million.
But Newbold warned that the move wasn’t as straightforward as just slapping a hard paywall, or even restricting content initially. The first wave was to move into reports to get the audience familiar with paying for their content, albeit in larger and less regular quantities.
The added benefit of doing reports first is that it gave the business time to identify gaps in skills and resources with moving to paid content.
“If you’re going to move your business, you have to change the skillset you have within your team.
“The step-change since then has been investment in data and analysis, and investment in those teams and the technology to get it all moving.”
It was the reports and research which, almost three years later, led the team at Centaur to realise that there was a big opportunity they were missing to monetise their content.
“The pivotal point was last year when we decided to change the core website, which was free to read but supported by display ads and recruitment. We decided we were going to make it paid-for. That’s quite a risky manoevure when you’ve got almost £4 million of advertising revenue…you can’t afford to slip up.
“When we did the reports and invested in research and data, we found out how respected and valued The Lawyer was to our core audience – who weren’t giving us any money at all. We converted almost all of them within the first three months to paying subscribers.
“Put quite simply, we were undervaluing our content.”
Centaur decided to set out three clear tiers on The Lawyer website. The first would be a free-to-view entry point, which meant that about 10 percent of content was accessible to anyone who visited the site. Around forty percent of the articles were then behind a ‘soft’ registration barrier, which required users to be signed in, although the content itself was still free. The third tier – the remaining fifty percent of content – was behind a paid-for barrier.
Putting a paywall up on content that has previously been free is unquestionably a risky move, and Newbold acknowledged that there was internal nervousness about it:
“On the main website, we had 140,000 unique monthly users before the paywall. We knew it was critical that we couldn’t suddenly drop that down to 70,000, and we had to hold steady.”
But the risk paid off. The site maintained the same number of visitors, and with sales and marketing teams assigned to work on corporate subscriptions, they realised the move would pay off quickly.
“The interesting learning for us is that the corporate teams, companies and individuals were really worried, and when they realised they wouldn’t be able to access over fifty percent of The Lawyer’s content, they signed up really quickly.
“What we underestimated and what we know for sure now is that they wanted The Lawyer’s opinion and authority on the market and the data…the power of the brand and the respect is what worked well for us.”
The renewal rate for the site is currently running at an “unexpected” 96 percent; an encouraging sign for the team to start looking to grow the brand further.
The revenue structure has also evolved. Advertising used to make up over 73 percent of The Lawyer’s total revenue, but it is now just 45 percent. Paid content has grown significantly, from 5 percent in 2013 to 30 percent in 2016 following the paywall launch. The team hopes that digital subscriptions will make up 50 percent of the revenue share by 2020.
“We’ve got 656 individual subscribers* just on the digital site paying on average £370 each…that was entirely unexpected.
“By 2020, we anticipate almost all our content to be available through a digital subscription, with reports available as part of a subscription or separately.”
The main focus for The Lawyer now will be getting the top law firms to commit to corporate subscriptions for their members. They have 146 organisations on their books to date, and 28 of the International Top 30 firms have signed up. This has made reinvesting in the business much more straightforward:
“The top law firms need this information…once we got them signed up, we were confident that as long as we kept investing in the product, we’d be in a strong position for renewals.”
With such drastic changes come hard lessons, and Newbold was unafraid of sharing these with the PPA audience.
The first lesson, and one he reiterated throughout the talk, was that The Lawyer was seen as the clear market leader in the UK for news, content and analysis, they just didn’t charge for it. Undervaluing content is the single biggest mistake a publisher can make, and it is one that led to many years of wasted opportunity in this case.
The second lesson was to invest in the right skills in a blended approach. This doesn’t necessarily mean replacing staff or changing the editorial culture.
“We didn’t want to lose the editorial expertise, but we brought in more analytics, data, rankings and factual stuff. The editorial team love that as it gives them the tools to write even better stories.”
Now The Lawyer has figured out what makes its individual audience tick, it has set its sights on understanding the intricate network of the corporate law world; what connects firms, top individuals and what they can do to provide value to those people. If it carries on making bold moves, and more importantly, work hard to understand who reads it on both an individual and company level, it will make strides that will continue to pleasantly surprise Centaur and the rest of us in the media industry.
*Private individual subscriptions, as opposed to corporate subscriptions