It’s crunch time for publishers’ business strategies. Great journalism is needed more than ever, and publishers desperately need to find new ways to fund it. There’s value in being a pioneer, in throwing everything at the wall and seeing what sticks, but there’s a huge amount of experimentation already taking place across Europe that media companies worldwide should be watching.
In our latest report on Europe’s Successful Paid Content Strategies, which launches today at noon right here on TMB, we’ve collected insight and advice from those European publishers. From hard paywalls to crowdfunding; featuring interviews with The Economist, Schibsted, Le Monde; there’s value in each of the 15 case studies we’ve presented. Here’s only a handful of the lessons we learned.
Clever conversion strategies
As our editor-at-large and chief author of the report Peter Houston mentions in his introduction:
“Conversion from free to paid readership lies at the core of most paid content strategies. Even for publications with content that is normally locked up tight, teasing readers with free access or nominal-cost trials has become a major marketing strategy.”
That a conversion strategy is needed at all is an artefact of the publishing’s digital original sin, that of putting any of their articles up for free in the first place. As notions of scale as a means of success begin to get questioned, publishers are having to re-educate their audiences in why they should pay for their digital content at all, rather than upping sticks and moving onto a free alternative.
Le Monde are achieving that by keeping what they consider their premium content – opinion and analysis – behind a paywall, while continuing to publish the bread and butter news content outside the paywall. Consequently, their digital subscriber base has reached 110,000, with an additional 60,000 taking advantage of a combined print-digital subscription. Cécile Prieur, Le Monde’s deputy director of editorial in charge of digital, told us:
“The old rule that was that all print content was paid and all web content was free. We decided that wasn’t a good definition nowadays and now, every morning, we have a meeting to decide what is paid and what is not.”
As a result, customers are far more likely to transition to paying regularly. A similar strategy is underway at NZZ, with a focus on using user data to facilitate that conversion. In revenue generation, the company has focused on a free to paid conversion strategy, with marketing efforts resting on the development of data-driven customer lifecycle management. It is moving from manual or semi-automated data selection and campaign management to a system of real-time, automated marketing actions based on detailed usage and behavioral profiles.
Consequently NZZ has seen growth across all its paid products. Year on year paid subscriber growth in 2015 – 2016 is 0.9 percent compared with a drop of 3.6 percent in 2013 – 2014. Small wonder then that for many publishers across Europe, luring those free audience members down the funnel to a paid model is the key principle of a conversion strategy,
Some outlets, like the Times and Sunday Times, have made a defence of the quality of their content a central tenet of their marketing strategy. Alan Hunter, the head of digital for those titles, told us that a successful paid content strategy is based on carving out a niche and fiercely defending your expertise in it:
“If you’re going to be paid for, you have to have that key kernel of difference from your competitors – find out what makes you different and focus on that. The ones that have made a success of paid models have been really specialist.”
Consequently, at a time in which even venerable old brands like The Times are feeling the squeeze in print, it has managed to grow its proportion of digital-only subscribers to 44 percent.
Similarly, The Economist’s chief marketing officer Michael Brunt is adamant that the journal couldn’t have build its subscriber base across its various platforms and devices without a keen eye for what makes the brand valuable:
“We knew from the time we launched the economist.com site that our journalism was of high quality and worth paying for just like our print product. We weren’t willing to compromise on that fact.”
Time and again during the interviews we conducted for our Europe’s Successful Paid Content Strategies report, we heard the same: If you don’t value your own content, how can you expect your audience to?
New models appear all the time
In addition to print-digital combo models and digital-only models, some publishers are reappraising how their audience might like to support them financially. A regular payment for access to a product is all well and good, but there are other models emerging – and thriving – across Europe.
Take De Correspondent, the Netherlands-based niche publisher whose entire mission statement and payment method is about empowering journalists to cover niches that aren’t receiving much focus elsewhere. Its co-founder and publisher Ernst-Jan Pfauth told us why that approach changes the relationship between publisher and paying audience:
“If you call someone a subscriber it suggests that they are a passive consumer who just pays for stuff, reads it, and that’s it. We really want an active relationship with our readers. That’s why we call them members.”
Consequently year on year retention rate for the site’s original annual membership plan is running at 83 percent. Retention on the more recently introduced monthly plan is lower at 73 percent, but it was introduced for people that don’t want to pay 60 euros all at once, especially students. Around 80 percent of all members are currently on the annual plan, but the split between annual and monthly on new memberships is about 50-50.
By contrast El Español, the Spanish start-up that launched with a crowdfunding campaign, relies on a hybrid subs and advertising model that attempts to ameliorate the inherent weaknesses of both. That’s especially valuable in an country that isn’t used to paying for online news to any significant degree.
Initial revenue projections showed advertising contributing up to 80 percent of revenue, but with long-term subscription income growing to equal cash from ads. The business is still someway short of its 20,000 subscriber target so far, but with a strong crowdfunding campaign behind them, there’s hope that the new hybrid model will win out.
The above insights and interviews are only a fraction of those contained within our full Europe’s Successful Paid Content Strategies report, available here.
Additionally, we’ll be hearing from some of the interviews and discussing the topic of new sources of revenue online heavily at Digital Media Strategies ’17 this February. For more information or to book your place, click here.