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Aug. 8, 2018, 11:03 a.m.
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LINK: insights.ap.org  ➚   |   Posted by: Laura Hazard Owen   |   August 8, 2018

The growing troubles of (non-Facebook, non-Google) digital advertising have left many publishers eager to move to a reader-driven, digital-focused revenue model. And it can be done: The New York Times announced in its earnings report Thursday that subscriptions now account for nearly two-thirds of its revenue, and that of its 3.8 million subscriptions, 2.9 million are digital.

But there are a lot of kinks to work out along the way. In a new AP Insights report, Ryan Nakashima and Anne Cai outline some of the concrete ways that publishers are making the transition — and some of the oh-shit moments they’ve faced in doing so. Here are a few:

Whoops, the paywall just reset. Digital First’s Bay Area News Group, which added a paywall to The Mercury News and East Bay Times last year, swapped out the art on its regular paywall prompt — from “plain vanilla, blue-background subscription appeals” to ones that showed an image of Golden State Warriors player Klay Thompson reading a newspaper. Then:

Though the company had been racking up nearly a thousand subscribers a month with its metered paywall, the move had the unintended effect of resetting the meter, meaning its millions of visitors got a new allotment of monthly free page views before being asked to subscribe.

The result was a more than two-week lull in which the daily average number of new subscription starts fell by 45 percent from the period immediately prior to the change.

But a series of successful maneuvers helped pull BANG back from that down period — in particular, a dramatic move to expand the $1 trial period offer from one month to three months, which effectively slashed the three-month subscription price from $21 to $1.

You need to know how to process credit cards. When The Seattle Times rebuilt its digital subscription system in 2015, it didn’t think at first about dealing with credit card declines on digital subscriptions.

For print subscriptions, if a credit card failed, the company would just send a print invoice and deliver the paper with no interruption. But with digital subscriptions and recurring autopay charges, a credit card failure means a stop in service. In fact, when digital subscriptions were launched, 62 percent of all their stops occurred because they couldn’t process a credit card transaction. Though that rate is lower now, they are still working on this problem, addressing it with a range of solutions including reminding customers with impending card expiration dates, using credit card updater services, and setting payment retry rules.

“You need all the technology in place to operate as an e-commerce company,” said [Curtis Huber, director of circulation sales and marketing]. And that encompasses less glamorous, less immediately obvious aspects — such as establishing business practices for managing credit card failures.

Any startup you work with is going to have its own problems. The Austin Monitor tested micropayments with a startup called PennyPass. But once the trial was up, there was no way to store the customer payment data it had collected easily or securely. “From that experience, PennyPass has since pivoted to solve that pain point for publishers, rebranding itself as Pico and pivoting to become a customer relationship management platform.” That’s fine, but it’s also a reminder to be skeptical about startups that come your way pitching their solutions.

The full report is available for download here.

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