Moving a media organization from free to paid content requires more than a meter. It also demands new skills, a deeper understanding of the audience, and improved content, both to maximize revenue and ensure consumers continue to see value worth paying for.
Listening to innovators from several companies—from the New York Times to Gannett, Atlantic Media recently, the American Press Institute identified 10 core ideas.
The Times launched a successful digital subscription model that’s now the biggest area of revenue growth for the organization. At Gannett leaders instituted a content revolution across its newspaper properties to refocus coverage areas in anticipation of charging for digital access. And Atlantic Media has utilized the strength of its brand to earn revenue using nontraditional streams like selling e-books and hosting high-profile events.
Those experiences were the substance of the most recent gathering of the American Press Institute’s Transformation Tour. The Transformation Tour is a series of 14 in-depth training sessions presented around the country and being developed into e-learning courses with The Poynter Institute.
The ideas are distilled from presentations by Tim Griggs, executive director of cross-platform monetization at The Times; Maribel Perez Wadsworth, Gannett’s vice president of audience development and engagement; and Kimberly Lau, The Atlantic Digital’s vice president and general manager.
1. Test everything
Before the Times launched its digital subscriptions two years ago, Griggs said it took a year to study, research and test the specifics. That includes honing precise messaging about how to explain the plan to the public, referral policies, where to set the meter and how to handle print subscribers.
“Test, test, test,” Griggs urged, “even the things you think are a given.”
The result has been a new revenue stream that’s worth tens of millions of dollars to The Times, he said. Currently, The Times has 700,000 paid digital subscribers.
Gannett also has adopted a culture of testing around product launches and new initiatives.
The company has rolled out paid content initiatives to 78 of its newspapers. All have adopted a metered model, but the plans are all slightly nuanced to reflect their respective communities. The meter thresholds range from seven to 20 free articles each month before the user must pay for access.
Altogether, Gannett has signed up 51,000 digital-only subscribers, and 1.3 million print subscribers have activated their digital access. Between its digital subscription plans and price increases for its print subscriptions, the company has seen a 20 percent climb in subscription revenue.
To get to this point, also took multiple phases of research, testing and tweaking. Wadsworth said the effort began three years ago when Gannett used three of its smaller newspapers as test markets for paid Web content, to understand consumer behavior. Next, the company set off on a “one-year exploration” into what precisely readers are willing to pay for and what exactly a digital subscription model would look like, she noted.
“Everything we’re doing, we’re doing in a testing context,” Wadsworth said. “We never launch just one offer without trying a second to be able to compare.”
2. Take cues from readers at the outset and along the way
The New York Times feared hurting its brand by launching a paid model that readers wouldn’t appreciate or understand, so the company turned to its audience for answers. Griggs said one central lesson reaped was to not oversell readers or push digital subscription offerings too hard at the outset.
“They want to be romanced,” he said. “They don’t want a lot of homepage takeovers and pop ups. They wanted to just be aware of the paid model and what it meant to them and to be able to manage their free articles.”
As a result, The Times added a feature called The Growl to the bottom of its website, counting down the number of free articles remaining. Initially the meter was set at 20 free articles. A year in, the company lowered that bar to 10 articles after learning that not nearly enough users were hitting the threshold.
Eventually The Times’ website became a bit more salesy in letting readers know their free allotments and simultaneously trying to convert them to subscriptions. But the shift didn’t happen until staff engaged in A/B testing — to ensure that the move wouldn’t upset readers, according to Griggs.
3. Account for how a digital subscription launch will affect the whole business
Not only is there potential for a digital subscription model to affect advertising and traffic to a publication’s website, there can be an impact on print advertising and print circulation. That’s why Griggs suggested thinking about your company’s enterprise as a whole, including the various platforms and products, when mulling pricing changes.
Leading up to the launch, he said, The Times had intended to charge print subscribers an added fee for digital access. Then, at the eleventh hour, executives decided not to.
“We began to think about our print subscribers. We’re extracting a lot of value from them already,” he said. Instead the Times included free digital access for print subscribers. “It paid off in a big way.”
Specifically, The Times retained more subscribers as well as prompted tens of thousands of people to sign up for print subscriptions because doing so allowed them to access everything. Subsequently the newspaper’s Sunday circulation is up at a time when some peers are losing circulation.
4. If consumers are paying for the content, not for the delivery of it, it has to be unique and high quality
Leaders at Gannett decided that if they were going to charge readers for digital content they had to review the caliber and types of work being done in their newsrooms. Wadsworth said it was important to invest in the journalism that meets the needs of customers.
The first step in what she termed a “content revolution” was to ask readers in each market what they care about and what the unique offerings are by that region’s Gannett newspaper. The goal was to come up with topics of passion for each community. For some markets this meant a sports team. Others were related to more government or investigative topics.
From there, Gannett corporate staff challenged each newsroom to develop a plan for how it would “win” in covering these areas of passion. In many cases, Wadsworth said Gannett has been able to make new hires, especially digitally-savvy individuals, as a direct result of items in the content plans.
“There were some commonalities but also unique topics in every community that we could put some laser focus on to set us apart,” she said. “We wanted to get out of general interest, being all-things-to-all-people traditional news organizations.”
The approach – focusing the publication’s coverage on topics most unique and compelling to that specific audience — is also one that’s been taken by Deseret Digital, led by former Harvard University professor Clark Gilbert. Gilbert spelled out his company’s content strategy and how it’s expanded their reach and revenue in a past Transformation Tour symposium.
5. Make customer service an important element of your plan
Media companies of the future must be customer-service centric, possessing a direct relationship with customers, all three speakers mentioned.
Griggs said The Times added a team specifically to oversee messaging and communications about the digital subscription plan in social media platforms. In hindsight, he confessed the Times underestimated the amount of attention needed to explain offerings to readers directly.
Consequently, The Times had to ramp up the size of its customer service staff. Currently there is a team of 200 dedicated in some way to the company’s paid business, and many of these employees have come from outside the newspaper industry with expertise in marketing, research and other facets critical to making the customer experience positive.
To zero in on customer service, Wadsworth explained that Gannett has introduced a digital certification plan for customer service reps. The certification ensures that staff members are able to answer all logistical queries about digital access.
6. Events are a new touch point for media brands
The Atlantic’s mission has long been to shape the national conversation. Leaders at the company are realizing that they can do this in a new way – while also adding nontraditional revenue by hosting events.
The 30-plus events that Atlantic Digital has held include forums with 150 to 200 participants, summits with upwards of 300 people and a series called Washington Signature Events. Most revenue comes from high-profile sponsors who pay to be associated with the event to market to attendees, Kimberly Lau said.
Lau cited New York Ideas as an example of a recent success. The gathering featured more than 800 attendees and big-name speakers including musician John Legend and Mashable founder Pete Cashmore. New York Ideas was paid for by six underwriters.
Most critical to excelling with events is to stay in line with the mission of your news organization, according to Lau. Also, it’s advisable to have strong collaborations between events staff and the editorial portion of the company so that there’s maximum coordination and resource sharing. And to get started, it can often be helpful to partner with a company that has a long track record with events. For instance, Atlantic has partnered with the Aspen Institute, which puts on the well-known Aspen Ideas Festival each summer.
7. Be innovative in your offerings and bundled deals
Gannett learned that consumers responded more strongly to a deal described as “two for the price of one” than to “half off.” The actual cost of the plans was the same, but people like to feel like they are getting something for free. According to Wadsworth, the conversion rate is one of the strongest the company has experienced, at 6.82 percent.
Similarly, The Times has made major strides signing up digital subscribers by offering the first month of access for 99 cents. From there, the goal is to escalate the price they pay to a more standard rate as quickly as possible, Griggs said. The 99-cent initial offer for the Times has been even more successful than giving away the first month of access, he noted.
The other innovative way The Times has gained favor with loyal readers and converted them to paid digital subscribers is through what they called the “most engaged user program.” The company identified the 100,000 most active consumers of content on its website and enabled them to have free access to Nytimes.com for nine months. The deal was made possible by an advertising sponsorship by Lincoln Motor Company that was part of a larger ad buy.
These highly engaged readers were so appreciative of the offering that when the free period ended late in 2011 a majority became paid subscribers, Griggs said, and Lincoln received a lot of good will and publicity.
8. Don’t expect subscriptions or memberships to jump on their own
Griggs said consumers don’t just automatically subscribe to digital products.
“You can’t expect it to just take off on its own; it (getting signups) needs constant love and feeding,” he added.
Lowering the meter from 20 to 10 free articles is one large adjustment The Times made. The company also closed a number of the loopholes and workarounds tech-savvy web readers were using to skirt the meter.
Additionally the newspaper rolled out a series of special rates to spur subscribers to pay for digital access. Some of these include education rates, meaning if someone has an email address with an “.edu” domain they are eligible for a deep discount. “Share the Times” is a gift subscription program in which subscribers can give the gift of access to non-subscriber friends. And The Times has added several flavors of group discounts to appeal to businesses that might want to buy access in bulk.
Gannett has put a lot of effort into subscribers and spurring them to convert to digital access. This includes sending out a daily newsletter to subscribers telling them the array of content and offerings across their different digital platforms. Wadsworth said this newsletter drives substantial engagement.
On top of that, the company has added an engagement desk in its consumer sales division to drive email communications with subscribers.
9. Be thoughtful about when to make exceptions and drop a meter or pay wall
During the past two years, Griggs said, there have been just a handful of instances when the Times has “dropped the gate” so that access to all content on the site is unrestricted. This included planned news events, such as the presidential election last year, planned maintenance to the site and unplanned news events in which there is an immediate public safety concern, such as Hurricane Sandy.
Griggs explained that these decisions are carefully made by Denise Warren, executive vice president of the digital products and services group, and Jill Abramson, executive editor. They evaluate on a case-by-case basis and then “spring into action.”
The move to do away with the meter temporarily is more advantageous from a financial standpoint early in the month, he said. The end of the month, in contrast, is when people hit limits and there are opportunities to sign them up for digital access.
Recently, as well, the Times announced a move to exempt all video content from the meter. Access to video is sponsored by an advertiser.
10. Don’t be constrained by your medium
In Lau’s mind, competitors to The Atlantic aren’t simply other national magazines. Startups and emerging content companies thinking outside the box and iterating quickly, such as BuzzFeed, are the companies about which she worries and tries to beat.
“It’s no longer about The Atlantic, the magazine; it’s about The Atlantic, the brand,” she said.
For example, Atlantic Digital’s reach online continues to expand. Last month the company saw 25 million unique views to its site, which is above its average of 13.4 million. The flagship app for The Atlantic also is experiencing steady growth to the tune of 212 percent year over year in subscribers, as of the last quarter of 2012, according to Lau.
To expand the company’s digital footprint, they’ve created Atlantic Books to produce and market e-books. The first creation by this division was a memoir by Jonathan Rauch called “Denial: My 25 Years Without a Soul.” Atlantic did an exclusive launch on Amazon for a week before expanding to other platforms. The value proposition to authors is that Atlantic brings editing expertise, built-in marketing channels to an established audience and management of the process and relationship with platforms like Amazon.
By year’s end, the goal is to publish 10 e-books.