What can be done to encourage people to pay for online news? Part of the answer, as heard at the recent FIPP D2C summit, could be summarised as: meeting supply and demand, broadening your horizons and not giving your best articles away for free.
Speaking at the event, Wired, Bloomberg Media and Business Insider are three US-based news publications each with a different - but thriving - subscription strategy. But none of them simply locked away their articles and charged readers for the key.
That does not work because people are simply not that willing to pay for news. The latest Reuters Institute Digital News Report 2021 highlighted this: just eight per cent of Britons and 21 per cent of Americans pay for online news.
Yet, digital subscriptions are becoming more important as publishers think about increasing their revenue options to safeguard against sources of income that can be compromised in the future (like advertising revenue was during the pandemic).
Audiences can also get most of their news elsewhere for free. It means news publishers need to think hard about a subscription offering which has enough exclusive incentives but also allows people to try before they buy. Here is how those three publishers have been navigating this situation.
Biding your time
For an organisation founded in 1857, The Atlantic sure left it late to launch a subscription model in late 2019. By this point, CEO Nicholas Thompson's previous titles The New Yorker (2014) and Wired (2018) had already rolled out similar offerings.
When it did go live with its subscription model, however, sign-ups went through the roof. Since launching, it has secured 400k digital subscribers.
"It makes sense to have an alternative," said Thompson, referring to advertising revenue which is not just less available, but now has higher demands to package it into other mediums like podcasts and video. The Atlantic was also "trapped by all the success of its digital website".
In other words, it was reluctant to change a website that was already getting 20 per cent year-on-year audience growth, and 25 per cent year-on-year active reader growth. The moment you gate off content, you not only mess with the website but with people's habits. The website needed to take its time to get this decision right.
It ultimately went with a three-tier subscription model: digital only ($50/year), digital and print ($60/year), and premium with extras ($100/year). This is geared towards making the middle option appear as the most attractive proposition.
Readers can view five articles before being asked to pay. In order to get the reader to use up their quota as quickly as possible, articles include lots of internal links, and visitors are signposted to daily newsletters and social media feeds. These channels continue to recommend more articles to try and ratchet their commitment up to a paid subscription.
They especially target visitors who engage across verticals (say, politics or science) as they are more likely to have a stronger affinity with the brand. People who read just one section probably get a variety of news elsewhere.
New subscribers receive a newsletter written by the editor-in-chief welcoming them in and then it is all about ensuring smooth experiences. Thompson compares this to staying at a hotel, where customers are greeted and someone offers to take your bags.
Huge introductory deals
Bloomberg Media occupies a slightly different position where 40 per cent of its 300k active digital subscribers are based outside of the US. It is a very global brand.
Its media business is a smaller cog in a larger operation where its primary business model is selling information to terminals and financial professionals. Three years ago, however, it launched a digital subscription model for news consumers. Two main tiers include unlimited access to the website and app (RRP $415/year), or an all-access tier which includes website and app, plus a weekly print edition and in-person events (RRP $475/year).
That is a considerable commitment to make from the get-go. That is why it runs big introductory deals, which slashes a monthly subscription down from $40 to $1. There are also student rates of $10/month which run until graduation.
It uses a dynamic paywall to allow readers to view a number of free articles based on their individual behaviour and preferences. Website analytics and tracking data show the reader's history on the site, and an algorithm determines their propensity to subscribe ranging from high, medium and low.
"We're thinking thoughtfully about what is the right experience which ultimately will get you to subscribe: it may not be blocking you from day one when you show up on our site," said Lindsay Horrigan, global head consumer marketing and general manager of subscriptions, Bloomberg Media.
Despite being a household name, it does not presume visitors will know who or what Bloomberg is. For that reason, is it trying not to pigeonhole itself into financial and business journalism - what it is best-known for.
For instance, it now has CityLab, a hub for reporting on the world's cities, communities, and neighbourhoods. There is also a shift towards covering the economic side of politics and lifestyle.
"What gets them over the hump?" asked Horrigan. The answer seems to be a broader appeal to a global audience, and making sampling the subscription really affordable and accessible. But then you have to capitalise on their new commitment: validate their choice and keep promoting all the new content they can now unlock.
"Typically, you have a 30-day window to make someone remember why they bought something and feel confident about purchasing it," added Horrigan.
Charging only for best articles
"When I think about what separates our brand, people do like the brevity and the bullet points, they like conversational style," said Olivia Oran, head of editorial subscription strategy at Business Insider.
The news publisher does have a distinctly decluttered look to its articles. More than that though, Oran says reporters are encouraged to be "edgy" and tell stories as if "they are explaining something to a friend at a bar".
Jargon is a turn off, and part of the subscription's appeal is that no-nonsense approach. It now has around 100k paying digital subscribers since setting it up in 2017, costing $50/year with ads or $80/year without. You can get a taster in the form of a $1, one month trial, just like Bloomberg.
Similarly, there are also student ($29/month) and teacher ($49/year) tiers. Unlike Bloomberg, it offers bulk subscriptions for groups, and the option to "gift" subscriptions to people as well, like the New York Times has started to do.
"To build a successful model, you need to lead with editorial content," added Oran. That is emphasised in the messaging to "become an Insider".
In the next few years, Insider aims for its revenue to be split in even thirds between subscriptions, commerce and advertising - but that is not yet the case as 90 per cent of stories are still free under its freemium model. Oran claims there is not enough return readership to start experimenting with a dynamic model: just 7 per cent of readers hit the fifth and final free article.
Digital subscriptions provide valuable data on what readers like and do not like, the basis of which helps editors make important decisions. Stories it thinks will do well will be locked behind the subscription, like a story about the editor-in-chief of food and entertaining magazine Bon Appétit's resigning and staffers of colour revealing the 'toxic' culture of microaggressions there.
But that was not initially thought to be a hit. It was a niche media story, which went on to be one of its best-performing stories. It shows that there is wiggle room for good, old-fashioned journalistic instinct.
"We usually have a good sense when something will be a hit or if it will bomb, but we've been proven wrong before around passionate groups of subscribers," she continued.
But the subscription is still young and the brand still smaller than its competitors. For now, it cannot shift too far away from advertising revenue, and even then, advertising still appears on subscriber content (unless subscribers fork out for the more expensive tier).
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