Magazine Publishers Race to Capitalize on the Paywall Trend
Amid changing consumer perceptions toward paid content, publishers embrace both new and tested methods for marketing subscriptions and reducing churn.
From streaming music and video services to the regular delivery of groceries or meal kits, the online subscription business model is booming across multiple industries.
That’s good news for magazine publishers, who are refocusing on the idea that subscriptions—to both print and digital content—can provide a significant source of revenue. A growing number of publishers are charging readers for access to at least some of their content. Against slipping ad sales and insufficient CPMs, this shift comes as publishers have been forced to find new ways to monetize their content amid the rise of programmatic and the Silicon Valley duopoly.
“The subscription business is one of Wired‘s most rapidly growing and important revenue streams,” says Wired‘s site director, Scott Rosenfield. “It has become a core part of our brand DNA over the last year.”
Wired introduced its paywall a year ago, and Rosenfield says the metered model—under which users can access up to four free articles each month before purchasing a subscription—has allowed the publication to “strike a balance” between its growing digital advertising and subscription businesses.
“The metered approach has enabled us to deliver the inventory advertisers want while still giving readers a compelling reason to subscribe,” he adds.
A membership model allows publishers to follow and learn from their readers, says Jay Kirsch, president of media at B2B publisher ALM, which uses a combination of metered paywalls and gated content—transactions in which readers gain access to articles in exchange for information, such as their email address or job function.
“Digital subscriptions have advantages in some ways because we know so much more about our readers than we do in print,” Kirsch says. “With a meter, readers create their own bundles of content that they want, and publishers then really understand how to market to them.”
In some ways, a metered paywall has taken over the role that newsstands or “pass-along” readership used to play, allowing readers to sample content to decide whether it makes sense to purchase an annual subscription.
The best methods for getting readers to pony up for content vary by brand, with many publishers using a combination of different models such as paywalls, tiered subscriptions, membership programs and micro-payments, as well as traditional print subscriptions with digital access included.
At Trusted Media Brands, which publishes Reader’s Digest and Taste of Home, among others, subscriptions account for the majority of the company’s revenue, making it an outlier among the major consumer publishers.
“Advertising was always secondary to consumer subscription revenues, and that was based on the premise that we wanted to create great editorial content that our readers were engaged with and would pay for,” says Alec Casey, the company’s chief marketing officer. “That’s always been first and foremost in our thinking about what type of content we’re producing.”
Email newsletters have become a significant subscription driver, with optimized newsletters converting about seven-times the site average.
As with the plans themselves, publishers are also exploring various new ways to fuel subscription growth, including less traditional avenues such as experiential marketing and podcast advertising. At Wired, email newsletters have become a significant subscription driver, with optimized newsletters converting about seven-times the site average.
While Trusted Media Brands still relies heavily on direct mail, it has also begun finding success in digital marketing efforts, including on social media. Part of that stems from the ability to use audience matching and other tools to specifically target potential readers.
While Facebook, Google, Apple and Amazon are among the factors contributing to many publishers’ revenue woes, they’re also increasingly offering products that can help publishers market paid subscriptions. Google, for example, launched “Subscribe with Google” last year, which aims to address a common pain point among publishers by allowing readers to pay for a subscription and then automatically log into it using their Google account.
“We’re finding that the Apples and the Amazons of the world are becoming much better agents for us,” Casey says. “They’re figuring out how to sell the magazines—both print and digital—in the right place at the right time.”
“We make changes on an almost-constant basis. Done right, it’s a never-ending cycle of self improvement.”
Once readers have subscribed, the primary factor in getting them to renew remains creating engaging content and a product that they find valuable. Kirsch says that renewals may be the aspect of subscriptions that has changed the least in recent years.
“Know your readers; communicate regularly in multiple media; give them a great product and customer service,” he says. “It’s heavy lifting, but not complicated.”
As a B2B publisher, ALM also has the advantage of its enterprise solutions, a model that works well for highly specialized media companies with a professional readership.
“If you can offer an enterprise value proposition, those large, high-renewal customers are a phenomenal channel,” Kirsch adds.
Even those publishers without enterprise products can benefit from changing attitudes among consumers, who are growing more receptive to the idea of paying for digital content, thanks to the ubiquity of services like Netflix and Spotify.
“We’ve gotten better about making the process easier for consumers,” Casey says. “They can understand what they’re paying for and how to cancel. Our renewal rates have gone up over the years as we have more people opting into our credit card automatic renewal.”
“Evolving to succeed”
Looking ahead, publishers plan to keep tweaking their subscription models to find strategies that continue to meet the needs of a changing audience.
“With any subscription offering, you have to constantly be testing and evolving to succeed,” Rosenfield says. “We make changes on an almost-constant basis. The goal is to build a body of knowledge around the factors—things like language, images, stories—that drive subscriptions, and to use that knowledge to change our tactics. Done right, it’s a never-ending cycle of self improvement.”