Introductory discounts win subscribers on day one. The behavioural science of pricing explains why they cost so much afterwards, and why casual pricing only works once the discounting stops.
Discounting has become the default way to sell a subscription. When Press Gazette analysed 60 UK and European news publishers in September 2023, 49 of them (82 per cent) were running introductory offers, and token payments of £1 or €1 were standard.
The New York Times, for example, was offering UK readers in September 2026 its All Access bundle at £2 every four weeks for a year. That’s around 83 per cent off the full price… or 17 per cent of the full price.
The case for discounting is not unreasonable. People need to experience journalism to see its value, and starting a paying relationship early, even at a small price, is better than no relationship at all. The problem is what the discount teaches the customer along the way.
What the behavioural science says
Four findings from pricing research explain why a cheap start is expensive later.
The first number sticks. Tversky and Kahneman showed in 1974 that people’s estimates are pulled towards an initial value, even an arbitrary one, and that they adjust away from it too little. This is anchoring. If the first price a reader ever sees for your journalism is £1, that is the anchor.
Customers judge prices against a reference price. Decades of research show that people compare what they are asked to pay with an internal reference price, formed largely from prices they have paid before. They also react more strongly to prices above that reference (a loss) than below it (a gain). So when £1 becomes £12, it is not experienced as a return to normal. It feels like a price rise.
Frequent discounts lower the reference price. Customers who see regular promotions adapt to the lower price as the real one. Research on consumer brands has found that frequently promoted brands are also judged to be of lower quality than those promoted rarely.
People anchor on the sale price. In experiments, consumers asked to estimate a brand’s typical price anchored on its sale prices and adjusted upwards too little, so they remembered it as cheaper than it was.
What that looks like to a high-value subscription business
The outcome is familiar to anyone who runs audience revenue:
Churn at roll-off. Germany’s Die Welt found that half of its new subscribers were leaving within the first three months. Lower prices bring more conversions but tend to bring customers who are less engaged and less likely to stay.
Customers who learn to wait. Subscribers discover that clicking cancel produces a cheaper offer, or that leaving and returning brings back the introductory price. Retention offers are now the norm.
A headline number that hides the margin. Subscriber totals hold up while revenue per subscriber slides, because more of those subscribers are on promotional or retention deals.
Why discounting and casual pricing do not mix
This matters most to media companies thinking of introducing casual, pay-as-you-go (PAYG) pricing.
Casual pricing works because it sits below the subscription: a single article or a day’s access for a small amount, with the subscription clearly the better deal for anyone who reads often.
That only holds while the subscription is at full price.
Offer the subscription at £2 a month and a 40p day pass looks expensive. The discount becomes the anchor, and the casual price cannot compete with it.
So our advice is clear. If you want to introduce casual pricing, stop discounting the subscription first, or at the same time. Our reader revenue assessment assumes exactly that, because the numbers do not work any other way.
How Axate removes the need to discount
Axate gives you other ways to do the jobs that discounting is used for:
A low-risk first purchase: A reader pays for one article or one day, at your real price. The first thing they buy is the product, not a cheaper version of it.
Keeping a subscriber who wants to cancel: They move to pay-as-you-go and keep paying for what they read, rather than being kept on a cut price or lost.
Winning back lapsed subscribers: Pay-as-you-go is open to them straight away, with the subscription one click away when their habits change.
Getting readers over the first hurdle: Free credit at sign-up, spent at full price. It works like a trial without resetting the reference price.
The anchor also starts working for you.
When a reader sees a price per day or per article, the full-price subscription reads as the good deal for regular readers, which it is.
Casual prices are anchored by your full subscription price, so that a frequent reader is always better off subscribing.
A practical starting point
Keep the subscription at full price, and stop running introductory and retention discounts on it.
Price most of your content, and set a clear free point: the rest of the day, or the week, after a set number of paid articles.
Use free credit, not price cuts, to bring new readers in.
Offer pay-as-you-go at the point of cancellation instead of a cheaper subscription.
Measure paying customers and revenue per reader, not only the subscriber count.
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