Many larger media companies, with 1m+ monthly visitors and a high-value offering, have built subscription businesses that work for those audiences willing to commit.
The next gain in audience revenue is a different product, and a new strategy, for the many millions beyond who will probably never subscribe at full price.
If you run audience revenue at a large media company, your subscription business is probably doing what it was designed to do. It serves the people who want everything, all the time, and it serves them well.
The question is what happens to everyone else.
It starts with a strategy question, not a payments question.
Almost every audience revenue product on the market is designed for the high-value minority who will commit to paying a recurring fee every month for the product, regardless of how often they need it or want it.
The offer, the paywall, the marketing and the metrics all point at them. Everyone else is treated as an advertising impression or a future subscriber. The opportunity lies in a third category: the casually paying reader, who will pay for the content they want, when they want it.
In our experience of years of commercial media, subscription levels tend to settle at between 2 and 5 per cent of the total audience at best, for most larger media companies. Industry benchmarks suggest the typical figure is lower still: INMA’s study of 166 news publishers put the median at 0.6 per cent of monthly visitors.
At enterprise scale, the rest runs into millions of people who visit, may read and return, but pay nothing directly.
Price tests, meter changes and offer cycles do little to attract these customers. The larger opportunity is a product for people who were never going to enter the subscription funnel.
Three thoughts on strategy changes
The approach might sound simple to describe, but takes deliberate effort to deliver:
Keep the subscription at full price. It is the right product for your most-committed customers. Protect it, and leave those customers undisturbed.
Stop retention discounting. When someone will not pay full price, or is about to cancel, offer pay-as-you-go (PAYG) access instead of a cheaper subscription.
Give everyone else a way to pay. At the moment that they want to read something, from a single wallet, where they can pay by article or by day.
Axate makes this possible as it runs alongside your existing subscription platform. Current subscribers stay where they are. What changes is the offer to everyone else, and to the subscriber who is about to leave.
Habit, not price, holds customers
We believe churn is more of a habit problem than a pricing problem. Products people come back to every day, newspaper puzzles being one example, hold customers in a way discounting never does. The New York Times has said that subscribers who use both its news and its games in a given week are much more likely to stay.
Casual payments, collected through PAYG, let you build and charge for those habits without disturbing the subscription. They also change what you earn from engagement.
While subscription earns partly from people paying for access to content they do not use, casual payment earns more the more someone comes back. We believe that, over time, a frequent casual customer can be worth more than a subscriber.
What decides the result
Most of it is in your hands:
The product. Something people want to come back to, often.
How much you give away. If 90 per cent of your content stays free, revenue will be close to nothing.
How free access is structured. A clear free point, such as “the rest of the day free after two paid articles”, gives readers a reason to pay and a reason to return.
With Axate, you keep control of content, pricing and the business model throughout.
Where to start
For a larger organisation, we recommend a strategy conversation before a technology one.
Introducing casual payments, when the product remains geared around subscription-only, and the premium subscription is permanently subject to aggressive discounting, is unlikely to change fortunes.
Dominic Young, who founded Axate after twenty-five years building commercial media models, would welcome half an hour to talk numbers, specifically how many of your audience who will never subscribe would actually buy, what it would take to sell it to them and what the commercial upside might be.
If you would like a starting point first, our reader revenue assessment gives an indicative view from three numbers.
[Book a call with Dominic] · [Try the assessment]