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Feb. 20, 2019, 1:57 p.m.
Business Models

How Tribune Publishing, The Guardian, and Slate tackled reader revenue by valuing their journalism more

Exclusive podcasts, tightened paywalls, and just plain asking each played a part.

Reader revenue, reader revenue, reader revenue. It’s much easier said than done, but these two case studies from Tribune Publishing, the Guardian, and Slate prove that it’s possible.

In a report from Digital Content Next and the Lenfest Institute, Matt Skibinski and Rande Price outline the for-profit and nonprofit approaches to increasing readers’ contributions, a key focus of the industry in a world where Google eats 37 percent of digital advertising, Facebook takes 22 percent, and Amazon continues to grow at 8.8 percent. The New York Times, the shining star example, makes about 40 percent of its revenue from digital, with a strong subscription backbone.

Lenfest’s previous data shows that publishers can push the top engaged five to 10 percent of their audiences to become paying subscribers — but again, that doesn’t mean that everyone is. Tribune Publishing eased up on its advertising-driven pageview focus and tightened its meter from 15 articles per month (how 2012!) to three over the past few years; tested price increases on longtime subscribers; and developed a digital marketing team dedicated to increasing digital subscribers:

As Tribune rolled out digital subscription models to its other properties including The Orlando Sentinel and The SunSentinel in 2013, and the Chicago Tribune in 2015 — it initially continued this conservative approach, with meter limits generally at 10 or more articles per month. The company’s results in its early years of charging for access were modest. Yet over the past several years, Tribune has seen a renaissance in its digital subscription program. After reaching less than 50,000 digital subscribers across all of its non-California properties in 2015, over the next three years the company’s digital subscription revenue started growing steadily. Tribune reported 89 percent year-over-year revenue growth in the first three quarters of 2018 totaling 227,000 digital subscribers according to its latest publicly-available financial report…

The company lowered its meter limits again in August of 2018, reducing the meter limit from five articles per month to three. Once again, their “meter stop rate” — the percent of users stopped by a meter limit — rose to 2.6 percent, bringing them from median performance to about the 70th percentile among publishers on this metric. Tribune saw no decline in their conversion rate for users who were stopped, and as a result their digital subscription starts increased 104 percent when compared with numbers from Q1 of the same year. ([Tribune senior vice president of digital marketing Mark] Campbell noted that a comparison to Q2 results was not available due to his team’s aggressive A/B testing during that time in preparation for the meter limit change.) Put simply, the company more than doubled its monthly subscription yield per unique visitor…

Campbell said Tribune’s team was emboldened by other publishers such as The Boston Globe, that have been aggressive in raising subscription rates for customers over time with significant success. “For us,” he said, “that would be the high-end price point. After you have gone through an introductory period, and then six months at $1.99 per week, and then six months with $3.99 per week.” This strategy has led Tribune to increase its rate per subscriber by 33 percent year over year.

The Guardian and Slate both emphasized the mission of their journalism and appealed to readers’ desire to support its quality. (We noted in November 2017 how The Guardian revamped its ask and got rid of swag to raise more reader revenue than ad dollars.)

Both companies began to pursue similar strategies, albeit starting from different places. In 2014, Slate launched its membership product, Slate Plus, with a set of features that [Slate’s director of product development David] Stern described as “mostly transactional in nature,” such as additional members-only content. “We surveyed people and the major reason they were signing up was to support the company,” he said. “But there was a non-trivial amount of people who subscribed for some benefit.” The product generated 7,000 memberships in the first year, which, while not insubstantial, paled in comparison to the size of Slate’s massive audience. According to The Lenfest Institute’s benchmarks, that membership rate — about .05 percent of Slate’s unique visitors at the time — falls at the median level. However, over time, as publishers build their membership bases, the top performers typically can convert 5-10 percent of their unique visitors into paying members. As such, Slate believed that their membership program had more potential.

The Guardian and Slate both tested members-only podcasts and behind-the-scenes initiatives to learn what their readers would pay for. Slate’s Slow Burn podcast, which revisits political scandals past, mixed a free version with mission-driven promos of its members-only Slow Burn episodes. (Slate is now building Supporting Cast, inspired by Slate Plus’s success, to help podcast publishers set up membership programs.)

The free version of Slow Burn generated 1.5 million downloads per episode, and the podcast as a whole drove 6,000 memberships in 2018…The key to success for both Slate and The Guardian has been exactly this kind of balance. Both organizations told versions of the same story: one in which readers are becoming members for a mix of valuable benefits like extra content and a broader desire to support the publication’s mission and journalism.

Journalism like The Guardian’s Cambridge Analytica reporting and Slate’s Trump administration coverage drove spikes in membership, too — particular if the organization made a special point to ask for that support.

The Guardian generated 340,000 members and supporters giving on a monthly basis and more than 350,000 giving one-time contributions (plus more than 230,000 subscribers to their digital or print editions) in the past twelve months. Interestingly, [The Guardian’s communications director Brendan] O’Grady noted that more than 50 percent of the company’s one-off contributions, which typically coincide with the publication breaking big stories, come from North America. In all, over the past three years more than one million people have given some form of financial support to the Guardian — including one-off contributions, rolling memberships and subscriptions.

Similarly, Slate has seen a flurry of membership sign-ups that it attributes to readers’ appreciation of its tough and skeptical coverage of the Trump administration. “We saw a big bump around the election—a much bigger bump than we had previously seen around an election or inauguration,” Stern said. In the three-month period covering the 2016 election and President Trump’s inauguration, Slate sold nearly 13,000 memberships, 3x the number of the three months prior. “That was entirely because readers wanted to support Slate.”

The full report is available here.

Photo of the best way money is made by TheDigitalWay used under a Creative Commons license.

POSTED     Feb. 20, 2019, 1:57 p.m.
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