Subscription based media models are very much back at the forefront of the UK industry’s thoughts, as was made clear during the recent UK Professional Publishers Association (PPA) Festival in London. Here, we’ve combined the insights of five industry experts who spoke on the subject at the event from leading brands including Centaur, IHS Markit, Financial Times, Campaign, and Time Inc.
Industry revenue patterns have changed significantly over the past ten years. When the UK Professional Publishers Association (PPA) released its Magazine Media Handbook in 2007, it highlighted a 72 per cent vs. 28 per cent split between print circulation and advertising revenues respectively. In the years that followed, the great global migration of magazine content from print to digital led to an understandable gold rush for online display ad dollars. But now, in an online ecosystem being increasingly dominated by Facebook and Google, further hampered by the growth of online ad blocking, and at a time when the scalability and shareability of social media has not necessarily converted into profitability for many media brands, publishers are again looking at new solutions.
One theme that shone out strongly from the PPA Festival this year was the re-emergence of new and developmental subscription models as a way of monetising content online. Here are the thoughts of five leading industry experts that are currently implementing such models for their brands.
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“Looking at The Lawyer, by 2013 we were in steep decline. By that point all you can think about is holding margin, cutting costs, and so on, and it can be a thankless task. We looked at everything and the first thing we said was okay this has to change. We did some research and we found that our readers really valued news, insight and data, so our strategy from there was to move to a high value/subscriptions based model. Ultimately we wanted to become less dependent on advertising revenue. In 2013 we didn’t have any revenues from paid-for content, but by the end of 2016 the brand had grown significantly. We’re now up to around £2.2m in paid-for content revenue, and the trajectory shows that this type of content is going to make up 50 per cent of our revenues going forward.”
“The first way we did this was to move ourselves into reports, and we started to invest more heavily in data and analysis. Within this, you of course also have to change the skillset within your team. Secondly, it was a big leap, but we decided to make the core website a sign-up based platform, with three different levels of entry:
1. Basic sign-up, where users can read some topline content by simply submitting their email address;
2. Soft registration, which required more details from the reader which gave us good, valuable, data; and
3. It was a big shift but 50 per cent of our content, the most valuable content, went behind a full paywall, which at the time felt extremely brave! We were targeting the top 150 law firms, and 146 of them have now taken the full corporate subscription.”
“We’re now simplifying the model even further to bring everything under a single subscriptions model. That will defer revenue growth in the short-term but in the mid to long term it pays off as growth is forecasted to jump massively, and you have a real forward visibility on your revenues. It took The Lawyer 35 years to do this as a brand, and it took a real shock to our existing business model to force us to take this under consideration. What we found was actually how highly respected and depended upon the brand was with the industry, and we’d probably actually been a bit guilty of undervaluing our own content.”
“We’re about a $3.5bn company that operates and focuses our efforts around large global capital industries, so investment, energy, transportation, etc. What we do is not just about data it’s about a service, and that incorporates the data itself, analytics, research, forecasting, and indeed a growing portfolio of media and events assets as well. We see those media and events products as being highly complementary to our core data/analysis/forecasting services, and increasingly adding machine learning into that mix is providing increasingly granular information and becoming a core driver of our industry.”
“But to say that we are data first and media second is to oversimplify our position. If you actually look at our roots they are really founded in the publishing industry. In 1764 we launched our very first publication, which was a registry of ships, and this has become our ships database today. The key really is to look at the assets you have and figure out what is proprietary, and then adding a value chain around that. So for us it’s not just about providing a data stream to our customers, there has to be a level of service and insight around that as well. Typically customers will be looking for a solution in a single place rather than having to subscribe to multiple platforms.”
“Since 2002 the FT’s print circulation has declined. Life became a survival game in terms of what we did next, especially in terms of making the sustainable transition from print to digital. But what many people don’t realise is that by 2001 we’d already introduced our first paywall – a paywall providing a metred experience. People could sample some articles for free. It started at 30, then 20, then 10, and now it’s 9 articles within a 30 day period. And what that transition really gave us was information. For the first time ever we went from a print publication that did not largely know its audience, to suddenly having all this data from online and being able to use it to market back to that audience.”
“So we created a direct sales team, licensing to companies directly, setting a price directly, and insisting on transparency. This came with a simple licensing structure: team, group, and enterprise. Within that we introduced something called a ‘Gift Article’, where individuals within businesses can share up to 20 articles per month with their colleagues. This again leads to more data, more visibility, and we turn that information into actions. We can see at company level how many people are copying, sharing, and so on, and all of this information has allowed us to really grow online. We now have a paid print and digital circulation of 846,000, and digital makes up around three quarters of that. A big chunk of that is corporate subscriptions and the overall impact for the FT of introducing these models has been a change in fortunes and that we have grown quite strongly.”
“The challenge we have faced is twofold:
• How to build a paying, professional audience, when free options are out there;
• How to sustain profitable growth when recruitment advertising is being eaten away by other channels.
From a branding point of view also, one of the issues we have faced at Haymarket, was that we had a series of segmented brands catering to different sectors of the advertising and media industries that were themselves becoming increasingly sync’d. So one of the first things we did was to consolidate the brands and now according to comScore we’ve risen from the third biggest marketing communications site in the UK to the biggest. The time people spend on the site is also up 50%. Which is all well and good, but for a sustainable future there has to be something tangible in it, like subscription money. So our new business model is founded on paid content in all its forms.
“For us paid content means everything from subscriptions, to events, to native, to sponsorships, etc. Our new Content Labs business does native and events and those areas have real potential for us. It’s never been easy to sell content in the B2B world, and in terms of what is marketable we can’t own real-time news. But what we can do is to be the go-to for the deep and meaningful insights into what it all means. Adapting our freemium metred model, which we’ve had for 7-8yrs, has meant in the last few months reducing the number of free articles from five to one. Registrations actually doubled in the week we made that move. It’s largely been about figuring out what represents high value information to different users.”
“For us looking at feature subscriptions strategies, we’re already operating in quite a mature market that comes with its own set of challenges. Previously we have been quite focussed on ecommerce, but the truth is that we now have to challenge what we’ve been doing and try some new strategies. And we approach this initially in a very straight forward way:
• Stabilise the core
• Drive future growth.
“Our core business to us is worth £30m+, and there are four key areas of focus:
1. Pricing: it’s more appropriate than ever before to ask people to sign up without an end date, and that allows us to start testing some monthly payment options;
2. In life engagement: rather than having people sign up, and then only talk to them in another year’s time when their subscription is up for renewal, we make a point of talking to our customers as often as possible and really immersing them in the brand;
3. Contact strategy: this is all about sharing the data we have on our readers across the various platforms and media brands that we run – this way as a business we can have a sophisticated strategy as to how and when we contact our database;
4. Of course integral to all of this is a strong and focussed data strategy.
“The subscriptions market is changing and that’s really exciting for us, but it means that our business is also changing. Really we would like subscriptions to sit at the heart of new product development at Time Inc.”
*With ad-driven media business models under pressure, a question for publishers is how they can increase the Average Revenue per User (ARPU) of their brands. This leads to increased focus on monetising direct from the consumer through initiatives such as paid content, events and e-commerce. At the forthcoming FIPP World Congress in London, 9-11 October, we will have several discussions and best practice case studies dedicated to these questions. Join us in London for more.
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