As publishers around the world continue to search for the right revenue model, new analysis from the States reveals the extent to which digital subscriptions remain at the heart of many news media business strategies.

Of the 98 daily newspapers in the USA with a combined daily circulation (across print, digital and branded editions) of over 50,000 readers, 77 of them (79%) use some sort of digital subscription model. 

However, the research – which was conducted by Alex T. Williams, a 2015 Research Fellow at the American Press Institute (API)) and a doctoral candidate at the University of Pennsylvania’s Annenberg School for Communication – also demonstrates considerable variances in the subscription models that are being deployed.

America’s next top (subscription) model

Metered models are, by some margin, the most popular digital subscription system used by American news publishers. 

“Of the 98 newspapers we looked at, 62 papers used meters,” Williams observed, “which is nearly three times as many as those [21 papers] not requiring a digital subscription.”

In contrast, just three titles – The Wall Street Journal, Honolulu Star-Advertiser and Newsday –  used a hard paywall, where a subscription is needed to access most content on the website. 

The other 12 papers that Williams analysed harness a freemium offering, which means that most of the content is available for free, with only “premium” material requiring payment.


Recent roll out

Alongside identifying these different digital subscription models, Williams’ research also highlights the nascent nature of many of these efforts; 71 of the 77 digital plans were launched in the last five years. 

“I was surprised by the rate of adoption,” Williams told TheMediaBriefing. “In 2009, only 6 of the 98 newspapers we examined were using a digital subscription,” he noted. “In 2013, 74 were.”

 With only three new papers adopting digital subscriptions in the past two years, this adoption curve has clearly slowed, but that doesn’t mean that publishers aren’t continuing to experiment and innovate with their subscription plans.

As the report records: “several newspapers have changed from one digital subscription model to another in the past three years.”

This includes The Florida Times Union and the Daily Press in News Port migrating from a hard model to a metered approach, as well as both The Omaha World Herald and Boston Globe moving from freemium models to adopting a metered arrangement.


Regional variations

Digging deeper into the data also uncovers discernible differences – by location and subscription model – for the cost of accessing content:

 “The average weekly price of a digital subscription varies by type of model: $2.97 for meters; $3.52 for freemium; and $4.43 hard models.” 

These averages, however, mask regional differences, with Newspapers in the Northeast and Central United States typically charging more for digital subscriptions. 


Other regional variants include the fact that “meter models are most prevalent in the Southeast (83 percent) and least common in the Southwest (45 percent).” Equally, “freemium models are 3 times more popular in the Southwest (36 percent of newspapers) than in any other region.” 

 Arguably, despite the relatively small sample size, understanding the reasons for such variances (which are not all simply attributable to different publishing houses) merits further investigation.


Size matters

Williams says:

“When you examine digital strategy by circulation size or geographic area, you see a lot of variance in pricing and the number of free articles allowed by the meterIt’s clear that despite the growing prevalence of meters, newspapers are continuing to experiment.”

Perhaps the most striking variance is found in the role that audience size potentially plays in shaping digital subscription strategies.

For example, only 64% of newspaper with daily circulations above 250,000 have digital subscriptions plans (including the only newspapers where hard paywalls exist). 

These larger papers are also the more expensive to access. The research found that:

“Comparing the average weekly price of a digital-only subscription, newspapers with circulations between 50-100k had an average price of $2.95, those in the 100-250k group had an average price of $3.20, and those in the 250k+ group had an average of $3.41.”

However, despite their digital subscriptions being cheaper, papers with a daily reach of between 50,000-100,000 users are much more likely to employ an online subscription model; 85% of them have a digital pricing plan in place.

This hints at two potential scenarios; that larger publications remain better placed to take advantage of large-scale traditional print and digital advertising models. Or, conversely, that smaller geographically focused publications are able to offer a more niche product – one that is less easily replicated elsewhere – and which thereby enables them to (successfully) charge for access.

Again, this is another fascinating conclusion which may also warrant additional investigation. 


Innovation and experimentation

Alongside, using different subscription models and pricing plans, publications are also testing other tools and techniques to drive sales. 

For metered titles, this includes reducing the number of free articles that audiences can use, once they have got used to this model. The report states:

“Of the newspapers analyzed 23 have reduced the number of free articles, 14 have kept it the same, and 5 have increased the number of free articles. Thus, it is rare for a newspaper to increase the number of free articles after their launch date.”

More widely, a number of publishers continue to explore bundling a Sunday print edition in with a digital subscription. Although this typically pushes up subscription costs, with nearly half of the newspapers in the west of the country reducing the cost of their digital package if this option is selected.

The benefit of this model for publishers includes the fact that readers remain exposed to premium print ads and special inserts, which they might otherwise by-pass in an online only world. One publication, the Arkansas Democrat-Gazette even offers a full seven-day home delivery service at the same price as their digital subscription. 

Meanwhile, in 2012 the Albuquerque Journal began to ask non-subscribers to participate in consumer surveys from Google in return for access. The paper receives a payment from Google for each completed answer, a model – the research observes – that both Digital First Media and the Columbia Missourian have also experimented with. 


Emerging Models

“I think 2016 will expand our understanding of whether readers will adopt micropayments,” Williams suggests, citing Blendle’s US launch as one to watch:

“Blendle’s launch in the US is noteworthy because most newspapers are using meters, [whereas] Blendle’s main value-proposition is news curation.”

“Understanding whether uses will value that curation enough to pay micro-transactions will be a noteworthy experiment.”

Blendle’s move, although using a very different model, follows on from 2015’s decision by the Winnipeg Free Press in Canada, to become the first legacy publisher in North America to take a gamble with featuring micropayments on its own site.

“Up until now the Winnipeg Free Press was really probably the last metro paper to not have a paywall,” Christian Panson, vice president, digital content and audience revenue, told TheMediaBriefing last July. “So we approached things a little bit differently than our counterparts in the industry, because we were able to learn from what they did, evaluate it, and try to adjust the model a little bit.”

As this approach reaches its first anniversary, Williams discerns that “while they have been happy with their results thus far, it will be interesting to see how much growth they experience this year.” 

With publishers considerably more likely to consult with each other, rather than their audience the outcome of the Winnipeg Free Press’ experiment is no doubt being watched with interest.

“Researchers at the University of Missouri School of Journalism found that 85% of publishers consulted with other newspapers before implementing a plan. However, only 29% conducted focus groups and only 28% tested the digital subscription with a subset of users.”

The future: managing change and user data

“Finding when a digital subscription was launched was … difficult,” Williams admits when asked how easy it was to find the information used in his analysis. “If I didn’t have access to academic databases that archive newspaper articles, I might not have been able to find this information for certain newspapers,” he says.

However, Williams says, “using those archives, one pattern I noticed is that many newspapers did a good job of explaining their digital strategy reasoning for months leading up to the launch of a paywall.”

This approach enabled regular readers to understand “why changes were being made” and “in some cases, editors would respond to letters from readers about the change.”

For newspapers introducing new forms of digital subscription this explanatory approach is clearly important if audiences are to understand what’s happening (and why). But for new digital visitors, this level of explanation is often lacking, or hard to find. 

Supporting these consumers – and also reinforcing the “new normal” to older more established audiences – may be something that publishers need to reconsider.

Another area ripe for review is the “missed opportunity of registration data.”


Highlighting how Time, The Financial Times and Piano Media, are exploring opportunities to use personal data in lieu of cash payments, or to provide more targeted advertising (and indeed potentially increased advertising rates), Williams’ research nonetheless revealed that: 

“Of the 77 newspapers with digital subscriptions that the American Press Institute examined, no newspaper asked about the subscribers’ interests, profession or education.” 

“I spoke to one newspaper executive who mentioned fear that asking such questions could spook prospective subscribers.”

In an era of personalisation and data mined – algorithm driven – recommendations, such an approach risks being both antiquated and one that does publishers a potential disservice.

Williams says:

“I was surprised that no newspaper was transparent and simply asked a person subscribing to the paper about their interests and demographics. Newspapers produce a ton of content and … it can be tiring for readers to try to comb through it to find what they want.”

“If explained well, I think readers would be willing to trade personal data for more tailored recommended readings.”


Damian Radcliffe (@damianradcliffe) is the Carolyn S. Chambers Professor in Journalism at the University of Oregon and a former guest editor of TheMediaBriefing.