Login
close
Login is restricted to DCN Publisher Members. If you are a DCN Member and don't have an account, register here.
Search

Digital Content Next

Menu

Tags containing: "subscription models"

Industry-Research

Subscription strategies for digital news

Historically, newspapers successfully employed a revenue model of print advertising and home delivery subscriptions. Unfortunately, this dual-revenue strategy is no longer a viable method to keep newspapers afloat. Digital advertising is dominated by two players – Facebook and Google – and most local news has failed to attract the subscription success enjoyed by publications with a national, or even international, audience like The New York Times and Financial Times.

In a new analysis, “Experiments and future models for digital news subscriptions,” the American Press Institute examines digital newspaper subscriptions in the U.S. to understand subscription costs and strategies. The research assesses subscription pricing by evaluating market size, circulation, and newspaper ownership. It’s important to note that digital content access includes but is not limited to websites, mobile applications, print newspaper copies, or e-editions. The results are based on 100 U.S.-based legacy newspapers; each based in one of Nielsen’s 100 largest designated market areas (DMA).

Key findings:
  • The median weekly price is $2.31 or $10 per month and $120 per year for a digital news subscription. Most subscriptions fall between $1 and $3 per week.
  • The new median weekly price of $2.31 is 83% higher ($1.05 more per week) than what was reported in the 2012 Reynolds Journalism Institute research. The median weekly price is also 221% higher ($1.59 more per week) than respondents stated they were willing to pay in the same Reynolds Journalism Institute research.
  • Four key factors in setting digital subscription pricing include market testing, corporate set price, industry norms and competitor pricing.
  • Market size and circulation do not show a correlation to subscription price. However, ownership does, as prices are often standardized across some companies’ media properties.

  • Discounted trial subscriptions result in higher conversion rates than do free trial subscriptions. It appears that some sort of initial payment information entry is helpful in converting discounted trials to paid subscriptions.
  • Subscriptions offer include an array of perks from access to comments and fewer advertisements to improved browsing experiences and rewards programs. There are also offerings that include “insider-only” perks such as newsroom tours, movie screenings and exclusive giveaways. Partnerships offerings are also popular. The Washington Post partners with Hulu to offer combined digital access to The Post and Hulu for $99 a year. The New York Times has a partnership with Spotify Premium for combined access for $203.88 for the year.

After news publishers capture the most loyal readers willing to pay for digital access, they need to secure the next segment of users who are not as easily convinced. This is when consumers need to be actively and individually converted to pay for a digital subscription. News organization must continually test new and unique offerings to attract new subscribers.

Innovation

How Slate, Vox, and The Washington Post are trying to turn Apple News readers into paying customers

There is little dispute about the popularity of the Apple iPhone. Since the it debuted in 2007, the company has sold more than a billion units. Last quarter alone Apple sold more than 41 million iPhones worldwide. Most of those phones are running Apple News, the news app that has been a standard component since Apple released iOS 9 in 2015.Ap

Simply because of the sheer number of iPhones running Apple News, it’s something that publishers need to pay attention to. After all, you don’t want to ignore a source that could give you access to hundreds of millions of potential of readers. But like so many things related to Apple (or any of the big tech platforms), understanding that potential and tapping into it are two different things.

Apple has some deals in place to monetize the content inside the Apple News app, and according to Advertising Age, could allow some publishers to use their own ad technology to sell ads in the way they prefer. Some media companies are benefiting from exposure that has led to increased subscriptions, but the platform remains a challenge to publishers as they work to understand how it works.

Measuring success

When you have a user base that large, you want to understand how to take advantage of it, and reap the benefits it could provide for your publication. Chris Schieffer, Slate’s senior mobile product manager, says it certainly gives his publication access to readers who might not see Slate articles in other sources.

“The traffic numbers are meaningful to us but we’ve been looking at this as an investment. It’s not a pure traffic play. The more folks that see us in News, the more folks we can introduce to Slate Plus (our membership product), and the more folks that may come over to our homepage or download our iOS app to check out our podcast,” Schieffer explained.

Dave Merrell, who is lead product manager at The Washington Post, believes that the key to Apple News is similar to working with any platform. It involves a tight integration of newsroom, product, engineering, design, and analytics.

“Apple News traffic and subscriptions didn’t just fall into our lap. We recognized the opportunity of a news platform built directly into iOS and made Apple News an integral part of our editorial processes immediately. We spent a lot of time studying the Apple News audience and their habits, and our editors watch Apple News analytics every day in order to ensure that audience is getting our best journalism,” Merrell said.

Driving revenue

The challenge of every publication using Apple News is turning that traffic into revenue. For publications that are using the subscription model, the goal is turning the casual reader who found you on Apple News into a paying customer. Making that leap isn’t easy, but it is the objective.

Slate plans to try and take advantage of the tools Apple has provided to draw in subscribers. “We’re excited about introducing our Apple News users to Slate Plus by implementing subscriptions next year. There’s still more to be done on the backfill revenue front but we have seen a small uptick as Apple has introduced additional backfill partners. We feel like the real opportunity though is through subscriptions with the ability to pay through your Apple ID. That’s a good experience for users and publishers,” Schieffer said.

The Washington Post has also been seeing a significant rise in subscriptions. “[We have] had a subscription offer in Apple News since the launch of iOS 10, and we have been pleasantly surprised by this audience’s propensity to subscribe. After only a year, Apple News is a thriving subscription channel for us,” Merrell said.

Making it better

While companies are trying to work with Apple to make Apple News work better for them, publishers would like to see more transparency. In particular, Vox’s engagement editor Blair Hickman would like publishers to have more control. “With Apple, as on many other platforms, there is a certain lack of control that publishers give up. We see views spike when Apple chooses to feature Vox. Over the year, we’ve built a presence on the app that has let us start to organically drive views. But it would be great, as with most platforms, to be able to drive that relationship with the audience a bit more,” Hickman said.

The Post’s Merrell would like to see more personalization. “Apple knows so much about me based on my phone usage. So, I would love to see more personalization that doesn’t require a big upfront investment from the user. I also think there is a great opportunity to incorporate Siri recommendations directly into the Apple News platform – and there is a great opportunity the other way as well, with News surfacing in more areas of the iOS and MacOS ecosystem,” he said.

Nobody can deny the potential of a captive audience that’s already addicted to the iPhone. However, media outlets and publishers are really still feeling their way to understand how to best use the platform. Schieffer sums it up when he says, “I think the value of all distribution platforms, not just Apple News, has taken a little while to shake out. It’s a big leap for publishers to start sending large portions of traffic without the immediate promise of equal revenue or more subscriptions. But I think the investment is beginning to pay off and that’s exciting.”

Industry-Research | Perspectives

How to build an app subscription model that works

A year after Apple announced the arrival of the subscription app model as part of a wider sweep of changes it made to its App Store policies, the size and scope of this new app category is exceeding analyst expectations. It is also paving the way for content companies to grow audience numbers and engagement.

Content companies that embrace the model can plan their business with high confidence that they will attract high-value users and generate a predictable cash flow. This is because consumers who buy into subscriptions commit to a recurring fee and – generally speaking – stick to their decision. Their resolve is inextricably intertwined with a concept known as the Sunk Cost Fallacy. Simply put, people who have invested time or resources in something don’t want to see it go to waste. Think of the times you rented a movie and, even though it wasn’t great, you watched it to the end. Now you’ve got the gist.

Consumer commitment colored by this fascinating bias bodes extremely well for companies that offer subscription apps. In fact, as far back as 2014, research found consumers would buy into subscription apps if the price was right. Specifically, the Branchfire research into consumer attitudes toward subscription apps found that “$10 a month is the sweet spot for subscribers.”

Are subscriptions right for you?

Fast forward, and the range of subscription apps has expanded to include much more than streaming media providers like Netflix and Spotify. Data provider App Annie reports that “in-app subscription revenue from non-game apps, particularly within the media streaming, news and dating categories, is rapidly increasing.” Overall, App Annie forecasts revenue for non-game apps to grow at an incredible rate of 25% – reaching $33.8 billion in 2021.

It’s good news that subscription apps are gaining traction. But not all media companies that can offer their app as a subscription model should do so. If you’re asking users to open their wallets, you need to offer value for money.

A crowd-pleaser across the board is fresh and relevant content. Obviously, media companies do this by definition. That said, in order to merit a monthly recurring cost, the content must be exclusive, or engaging – or both. Regularly releasing new features is also a plus.

Finally, apps that remove the friction from navigation, or help users accomplish important tasks (book a reservation, register for more information, streamline sharing) are also a hit with time-crunched consumers and multi-tasking mobile users.

Do your homework

Before you decide to release a subscription app, do your homework to make sure your audience engages frequently, and deeply enough, to merit the investment in the first place. This is where audience measurement data around the who, when and why of app usage in the form of behavioral data and insights is a must. Even better if this data spans all the platforms that encompass consumers’ daily routines.

Finland’s Verto Analytics focuses on precisely this, quantifying the user journey from one device to another and measuring from the point of consumer interaction across all platforms, media, content and devices. In April Verto posted high-level research into news access and engagement across platforms, highlighting how (and when) valuable audience segments engage with news content.

The day-in-the-life data and visualization underscores the importance of offering content to consumers on their terms – and across all platforms. But it also reveals interesting “windows of opportunity” during the day when content companies might use their presence to interest consumers in a subscription offer.

Raising awareness of your app is an important top-of-the-funnel activity. However, you also need additional data to plan your app marketing and acquisition campaigns – and ultimately benchmark your performance against your peers.

You must also consider several important criteria, which are raised in the 2017 Subscription Apps Report, such as: What is the proper price range for a subscription app? How long is too long to wait for a user to convert and commit to paying a recurring cost? When are the best months to reach and engage potential users?

Compare costs and contexts

The report finds that it costs $161.38 the cost to convert an app user into a subscriber. However, the number may skew high since the subscription app category Liftoff tracks includes Dating Apps, Utilities, and Finance. These types of apps vary significantly in the value they offer and the monthly subscription fee they charge.

It is essential to remember that subscription apps (and their users) are about long-term gains, not short-term bargains. Granted acquisition costs high, but media companies can also increase conversion rates by using all channels at their disposal – including email, push notifications and print ads in their own media properties – to reinforce their value proposition.

Provided they are powered by appropriate messaging and effective targeting, subscription app campaigns can engage and re-engage audiences all year long. This is very different to other categories, such as commerce, which take their cues from seasonal triggers such as holiday sprees or back-to-school shopping.

Companies that offer subscription apps have a huge window of opportunity in which to run campaigns and hit targets. Liftoff also finds that there are some stand-out months, such as September and March, when the “cost to acquire a user who subscribes to the app pays dividends beyond the promise of a more predictable business model powered by more sustainable revenues.”

Above all, keep in mind that driving high conversion rates for your subscription app a journey, not a destination. Regardless of your app subcategory (news, lifestyle, sports) or your campaign objective, your results will be determined by your ability to orchestrate all of your channels to take advantage of all the opportunities to communicate with consumers in ways that are easy, engaging and effective.

Peggy Anne Salz is the Content Marketing Strategist and Chief Analyst of Mobile Groove, a top 50 influential technology site providing custom research to the global mobile industry and consulting to tech startups. Full disclosure: She is a frequent contributor to Forbes on the topic of mobile marketing, engagement and apps. Her work also regularly appears in a range of publications from Venture Beat to Harvard Business Review. Peggy is a top 30 Mobile Marketing influencer and a nine-time author based in Europe. Follow her @peggyanne.

Perspectives | Revenue

Facebook’s support for subscriptions is a double-edged sword

Campbell Brown, the former NBC and CNN broadcaster who is now Facebook’s head of news partnerships, confirmed in a speech at a digital publishing conference that the social network plans to roll out support for subscriptions as part of its mobile Instant Articles platform.

There have been multiple reports that the company was working on such a plan, including a recent piece by Digiday that quoted a number of sources, but Brown’s speech is the first official confirmation. She said testing of the new feature will begin in October.

This plan is likely to cause some cheering in media land, because a number of publishers have been clamoring for paywall support from Facebook. They have also criticized the lackluster performance of the existing Instant Articles format when it comes to generating revenue.

As with most things involving Facebook, however, this deal sounds like a classic Faustian bargain.

What’s the Deal?

According to Brown, subscriptions will work this way: If a publisher chooses to implement support for a paywall, readers will get 10 articles for free — in much the same way they do with the New York Times’ “metered” access plan. After that, they will be prompted to sign up for a subscription. If they already have one, Facebook says it will make it easy for them to log in.

And what about the revenue — will there be some kind of sharing plan, where Facebook takes a percentage, the way Apple does with its 30%? The company isn’t saying, but it seems likely that there will be, although perhaps not to begin with.

Update: In a statement on Wednesday, Brown said “Quality journalism costs money to produce, and we want to make sure it can thrive on Facebook. As part of our test to allow publishers in Instant Articles to implement a paywall, they will link to their own websites to process subscriptions and keep 100% of the revenue.”

Brown did say that the social network would give publishers control over all of the reader and subscription data involved in the process, which is also likely to come as good news to many. At least they don’t have to hand all of that over to Facebook as well as all of their content. But that doesn’t mean this deal is something media companies should leap at.

The context to this offer, as a number of people have pointed out, is that Facebook is taking some sustained fire for its dominance of the advertising industry (along with Google), with the News Media Alliance arguing its members should be exempted from antitrust laws so that they can present a combined front in bargaining with the digital giants. I wrote about that idea in a previous post.

Not only that, but a number of publishers — including the New York Times, an early partner — have talked openly about how Instant Articles has proven to be a bit of a bust revenue-wise. Some have turned their back on the platform completely, despite Facebook’s attempts to improve things.

The Bottom Line

But the bottom line with this subscription offering is the same as it has been with Instant Articles and Facebook video and half a dozen other things the social networking behemoth has come up with: They are fundamentally designed to benefit Facebook, and to centralise control in its hands, and to generate as much content as possible. Any benefits they provide to media companies are ancillary at best.

If you connect your subscription plan to Facebook, will you get increased reach? Probably. Will it help you drive some new sign-ups? Perhaps. But it’s important to remember that the entity in control of every aspect of that relationship is Facebook, not you — Facebook decides who sees what and when, what it looks like, how it functions, and how much revenue you get.

In other words, you are working on land that has been given to you by a feudal lord, and that rarely ends well.

Mathew Ingram covers the evolution of media and the social web. Most recently, he was a senior writer at Fortune magazine. Prior to that, Ingram was a senior writer at Gigaom.com, one of the leading technology blog networks in the United States, based in San Francisco and founded in 2006 by former Forbes and Business 2.0 writer Om Malik. He also served as the first communities editor of The Globe and Mail, a daily national newspaper based in Toronto.

Perspectives | Revenue

Media brands with superfans most likely to succeed with digital subscriptions

Leaving this year’s Digital Content Next Summit in New Orleans, I was struck by how much of the conversation revolved around media companies moving from an advertising-supported model to a subscription-based model. There was a lot of healthy debate around the optimal types of brands and level of scale required to succeed in this transformation. Everyone wants to know what the best offering is and what types of content are best suited to capture subscription revenue.

One variable not discussed as deeply was the value of passion. Ask yourself: How passionate are your fans about the topics you cover. How passionate are they about the media brands themselves? The answers tell you a lot about your odds for success.

Passion Play

At TEN, we believe our passionate fan base is a key success factor in transitioning from a legacy publisher business model to a direct-to-consumer business with multiple revenue streams, including subscriptions and events. Let’s start with how we quantified how passionate our fans really are.

We partnered with market research specialists GfK to try to put a monetary value on our fans’ passion and influence. GfK’s proprietary study told us that our fans are two to five times more valuable than the national average in terms of buying power and buying influence across auto, action/outdoor, and home tech—our core content pillars.

We have built trust with these fans and through years of covering their passion and being a market leader in that particular space. Brands such as Motor Trend, Hot Rod, and Surfer go back decades as the respective bibles of their categories. Our job has been to leverage that brand trust and deliver great experiences on new and evolving platforms. In many cases, the business model is free with ad support, paid, or a combination of both.

Ready for Action

And now we are seeing it come together. Strategy is meeting up with execution. Looking at social, our auto reach is more than 106MM with an average age of 27. They are the greatest collection of millennial automotive fans in the world—an unexpected position to be for a legacy publisher reinventing itself in the new media landscape. Passion produces engaged fans. And that engagement provides a bridge to monetizing these fans in a variety of ways.

When we talk about original content and digital video, the story is even stronger. Our Motor Trend YouTube channel is ranked number one in the U.S. by Tubular Labs in every category they track, from subscriber monthly views and cross-platform views to engagement rates. This translates into revenue through pre-roll and ad-supported sponsorships and integration into our programming.

In our events business, we’ve gotten 30,000-plus fans to attend Roadkill Nights, an extension of our original video series of the same name. This past summer, Roadkill fans got to drag race down the iconic Woodward Avenue in Detroit. The show’s host, David Freiberger, is now (much to his chagrin) a genuine social media influencer, mobbed by autograph-seeking fans at every event, some bearing Roadkill tattoos.

That kind of success is what created the optimism around our original content and our SVOD service, Motor Trend OnDemand, which we launched in 2016. Today, you can find our shows and SVOD service on Amazon Prime Video, Netflix, Roku, Apple TV, iOS, Android, and Chromecast. Hundreds of thousands of people engage with us there each month on top of the millions who watch us on YouTube and Facebook Live. Most important, they care enough about this content to pay for it.

The Passion Grows

This passion and viewership is further amplified through our existing media footprint. We use our social channel, sites, magazines, and events to drive viewership, subscription, and engagement—often in real life. Moving forward, we expect to add more affinity models, where we bundle the SVOD, print, events with exclusive experiences to surprise and delight our fan base.

All this leads us to encourage our media peers to monetize their consumers directly. This means focusing on the brands and properties with the highest engagement metrics, most passionate level of fandom, and the kind of content opportunities best suited for today’s consumption platforms of choice: on-demand digital video and social. If you do that, passion will beat scale every time.

Scott A. Bailey serves as President, Automotive, for TEN where his primary responsibilities include enhancing the relationship between the Automotive Group’s brands and its audience, leading the continued development of TEN’s digital businesses, and improving its customer offerings by expanding its media platforms. Scott is a two-time nominee and Emmy Award winner for his work in advanced media technology and brings decades of digital and publishing experience to TEN .  He came to TEN from Synacor, Inc., where he served as Chief Operating Officer and was part of the management team that took the company public in 2012. Before Synacor, Scott served as Senior Vice President at Comcast Interactive Media, and prior to Comcast, he was the General Manager for Turner Sports Interactive, a division of Turner & Time Warner.

Revenue

Media companies lured by the promise of subscription revenue

Media companies are in the midst of a massive shift in revenue strategies from one primarily focused on advertising to one that is more diversified. Without a doubt, subscriptions are highly attractive, given that they guarantee a steady stream of income that is far less volatile than the digital ad market. Ads probably aren’t going away anytime soon, but media outlets are looking for new ways to monetize beyond the traditional ad, and subscriptions offer one way to do that.

As Facebook and Google dominate the ad market, media companies have had little choice but to look for other ways to make money. The Wharton School’s Knowledge@Wharton blog published a post in November, The End of Digital Advertising as We Know It, which suggested that even Facebook could be facing an ad revenue shortfall sometime in 2017. “Facebook has said that ‘ad load,’ or the relative volume of advertising versus content on its pages, isn’t going to be able to fuel revenue growth as much as it has to date,” according to the blog post.

Certainly issues like “ad blindness” and the rise of ad blockers has contributed to worries about ad-driven revenue. However, the attraction of incorporating subscriptions into the mix also reflect the practical limits of the ad model and the advantages of securing a steady stream of income from loyal subscribers.

Certainly, software companies have seen the subscription light and heeded the siren’s call of recurring revenue. As an example, Adobe has completely transformed from a company that once sold boxed software to one that sells subscriptions – and has thrived under the new approach.

Moving to a subscription model
Media companies believe they can get a piece of that recurring revenue action and gain the same advantages as software companies. Robbie Kellman Baxter, principal at Peninsula Strategies, a firm that works with companies making a shift to subscriptions, says subscription revenue works best for media outlets with a specific focus. “Subscription models are the answer for many of the best content providers, especially those with content that is targeted for a specific audience. The more specific the audience, the more likely subscriptions will appeal to them,” she explained.

The New York Times is a great example of a company that is making an aggressive push to grow its subscription revenue. It recently published a report that shows subscription revenue has surpassed advertising as the company’s primary revenue source. The company now has 1.5 million digital-only subscriptions, up from one million a year ago, and from zero just six years ago.

While the New York Times doesn’t see ads and subscriptions necessarily competing, the company is clearly putting more focus on the subscription business and is hoping the quality of its content will drive more interest over time. “We consider ourselves a subscription-first business. We believe that the best business strategy for The Times is to provide journalism so strong that several million people around the world are willing to pay for it,” a New York Times spokesperson said.

And The Times is not alone. Eric Hellweg, executive editor at Harvard Business Review, says that focusing on subscriptions is really about facing the reality of a changing ad market. “It’s pretty tough out there for ad-based media businesses if you are not Google or Facebook. And I think that it’s becoming clearer to media executives that the ad market is goIng to get tougher in the foreseeable future. It makes a lot of sense to look at subscription models as a possible way forward,” he said.

Shifting focus
Baxter says that the shift to subscriptions requires a fundamental focus on audience by media companies. “It is not enough to have eyeballs, they need to attract the same eyeballs, day after day, making their content a habit for their subscribers. This means that they really need to know their audience, and to tap into their changing needs,” she said.

HBR’s Hellweg sees it in similar terms. “To get a subscription business right requires some pretty significant changes, that in many ways cut to core of many media businesses. First, you need a product people will pay for in a meaningful way. Then you have to shift to being user-centric, rather than an ad based business, because it’s essential to understand your users and how to serve them,” he said.

When you shift the focus to the audience, it opens up new business opportunities, Baxter says. “When you look at what the audience really needs, why they consume your content, you realize that they aren’t just consuming in a vacuum—they might be trying to be successful in their careers, or to look smart to their friends, or to be in the know about their favorite sports teams. All kinds of new options for features emerge including online community, events and advisory groups,” she explained.

Converting from free to fee
Realizing that the subscription model could be the best way to go is one thing, but getting people to subscribe is another. It can present a challenge to media companies as they make this change, especially since online audiences have come to expect free content.

Jonathan Anastas from The Enthusiast Network, a media company focusing on action sports and automotive enthusiasts, says in 2017 it’s not that difficult to convert people to be paying customers if you appeal to something they’re passionate about. “People seem more willing than ever to pay for access to the content they love. So, the answer seems to be some combination of super high-end quality in the programming itself or how it’s delivered, a reasonable value proposition, an exclusivity window and passionate content or passion around the content. Give people three of those things and you have a paying customer,” he said.

Andrew Sollinger, EVP for subscriptions and events at Business Insider, agrees that if the content is good enough, people will pay for access. “Readers have grown increasingly sophisticated when it comes to understanding what makes for high-quality content. So our strategy of converting prospects to paid subscribers is a simple one: we provide enough access for readers to get a real sense of it. Ultimately our coverage sells itself,” he said.

As the ad model becomes more difficult to sustain as a primary revenue generator, media companies are seeking alternative ways to make money. While eCommerce, conferences and other means of income certainly offer a way, the subscription model with its recurring revenue stream is one that could be increasingly attractive moving forward, especially for specialty media with something unique to offer the audience.

Innovation | Revenue

How trust drives success—takeaways from the 2017 DCN Next: Summit

It’s a brave new world. As the media companies experiment with quickly-advancing technology amid the duopoly of Google and Facebook, tight competition antiquates the notion that only “content is king.” In the meantime, according to the 2017 Edelman Trust Barometer, consumer faith in four pillars — NGOs, business, media and government — fell since last year, with the trust in press falling the most.

But challenge also presents opportunity. Through careful planning and innovation, Digital Content Next (DCN) CEO Jason Kint believes that DCN’s members are in a unique position to find success. The key? Building and sustaining trust — not just in news, but also in brands. As Kint pointed out during DCN’s members-only Next: Summit, held Jan. 19-20 in New Orleans, it is “universally understood” that trust arises under conditions of uncertainty and vulnerability.

“I believe that there’s never been a better opportunity to create trust with consumers and advertisers,” Kint said.

Over two days, amid a backdrop of the French Quarter in the Crescent City, Summit speakers urged focusing on brand, product and shared community-centric experiences to allow companies to survive, and even thrive, amid shifting media sands. This theme continued, from the kickoff by Harvard Business School professor Bharat Anand, who explained how connectivity promotes loyalty during digital change, to a closing session about how to manage a subscription business amid wide-spread content distribution on third-party platforms with Kinsey Wilson, Editor for Innovation and Strategy at The New York Times.

DCN member-company executives from around the globe reflected on how to retain and build consumer loyalty by marrying “customer first” mentality with smart, technology-driven strategy. Here are three key takeaways:

1. Embrace change — even if it means being radically different. So-called “best practices” may be antiquated and dangerous to follow. In the current environment, it can pay off to establish a unique identity.

Steve Cook, Contributing Editor of CMO.com, said time today is more valuable than money. To appeal to clients, companies need to have brands or services that are “excellent,” usually because “they’ve managed to differentiate themselves.”

Melissa Bell, Publisher of Vox Media

Publisher of Vox Media, Melissa Bell, challenged the audience to embrace fluid business models. For Vox, that meant softening the barrier between revenue and editorial teams to create premium — and enjoyable — advertising as part of the full package. “We think of ourselves as publishers,” she said. “We need to think of ourselves as in a conversation with people. How do we hear from them what they need from us?”

Justin Smith, the CEO of Bloomberg Media Group, said it’s essential to be gutsy when building digital-first brands amid change. As a vertically-integrated company that uses media to drive value to its core business, Bloomberg’s role has been that of “big disruptor” and “innovator” in the industry. But for success to happen, Bloomberg had to be open to failure. Whenever an employee “tries and fails,” Smith added, Michael Bloomberg himself will go to the department and “pat the person on the back.”

2. Dare to examine paid subscription. Don’t be afraid to demand more for higher quality.

Nearly 77 million people are expected to use ad-blockers by the end of 2017. Yet, the majority of digital media revenue still comes from advertising: a sign that companies need to focus on user experience and leverage quality. “We must find a way to use our brands as wellsprings for new revenue opportunities,” Kint said. “We can’t be beholden to the advertising market.”

According to Wilson from The New York Times, by its nature quality journalism “has always, in some form, been subsidized.” Testing a “leaky” paywall can both generate revenue and be flexible enough to drive conversation on social platforms.

Financial Times CEO John Ridding said his company is always examining ways to reduce reliance on advertising. The key? Superior content that readers trust. “Some information isn’t as worthy as others,” Ridding said. “I think the internet is a liberating force for inclusion and access, but at same time there has to be a role for quality information, which costs money.”

Marta Tellado, the CEO of Consumer Reports, underscored that even an older, paid-subscription company can become relevant in today’s market with some effort. “You have to reintroduce yourself,” Tellado said about their focus on reinvention. “We have to show up where consumers are.”

3. Diversify. Creativity can be harnessed to drive additional revenue.

Maya Draisin, the associated publisher of WIRED Media Group, said the company has invested in live events, branded content with Netflix, executive membership and a promotional t-shirt collection to help drive revenue. “We look at everything.”

President of The Atlantic Bob Cohn said that, in addition to digital, print and video, the company has launched highly-successful live event and consulting businesses, fast-growing ventures that help individuals connect and organizations “strategize digital thinking.” He advised directing business ventures into “open space” as you would a game of ultimate Frisbee: “Where is the audience going and where is business going?” he challenged. “Send the disk in that direction.”

And, rather than taking a digital-first, or mobile-first approach, Cohn said that The Atlantic is “audience-first.”

In a similar vein, Viacom EVP Ross Martin said that they take a “fans first” approach, which has motivated unique promotional techniques. One example? Turning Airbnb into a native advertising platform with a Teenage Mutant Ninja Turtles experience. Martin showed a three-year-old’s reaction a “Ninja Turtles lair” they created to look like turtles digs in the movie set. The child’s face was lit up, eyes wide: delight personified. “Do you call that marketing?” quipped Martin. “I don’t know what you call it.”

Ultimately, all of the DCN Next: Summit’s major themes circled back to that audience relationship and, above all, maintaining their trust. “Sometimes called consumers or audiences…for us, fans are the north star,” Martin said. And that mindset is a healthy one that should guide this industry forward.

Innovation | Revenue

CBS Interactive Advanced Media bulks up its vertical subscription strategy with TrainerPass

CBS Interactive Advanced Media has tapped into a market ripe for reinvention: the home video fitness industry–though “home” might be a misnomer given the fact that mobile increasingly dominates video and consumption. CBSi Advanced Media just debuted TrainerPass, which features hundreds of workouts from fitness pros, which is offering via website access and on iOS and Android Apps.

“It’s an interesting time for fitness,” says David Katz, Vice President and General Manager of CBS Interactive Advanced Media. “Home fitness was dominated by a huge DVD market for a time, but that’s fading away and nothing has replaced it.” Though there have certainly been web-based forays into this market, Katz feels confident that TrainerPass is the first to aggregate such a large variety of trainers’ content in one place.

According to Katz, cross-platform delivery was a given because of the way mobile has effected users’ behaviors and expectations of anytime anywhere content access. He points out that users won’t just want to access content from home or hotel room — certain types of technique-oriented content, for example, may prompt them to review a short video at the gym or before heading out on a bike ride.

Another distinctive aspect of TrainerPass is that it highlights interaction. Features include direct messaging that trainers can use to react quickly and respond to user needs and requests. While not every trainer who has signed on will feel that audience interaction is essential to their content offering, Katz looks forward to seeing how the opportunity to connect with audiences impacts different trainers’ engagement level and popularity. “It’s quite possible that one who hustles and listens and hears their fans and delivers what they want may even be more successful than better known trainers who aren’t as engaged.”

And while CBSi Advanced Media is enthusiastic about any trainer bringing their own audience to the platform, Katz is confident that, given his company’s reach as the eighth most trafficked brand online, they will be able to deliver significant audiences to all those participating. He notes that creating an offering like this one under the larger CBS umbrella has the added advantage of allowing him to “leverage all of the great technology, learning and experience that happens within this company all of the time across our disparate sites and services from CNET to CBS’ College Sports Live to CBS All Access.”

myworkoutsOne key component of this is in helping to develop a business model around a specific content vertical. TrainerPass offers two types of memberships so subscribers can sample a variety of workouts across disciplines or dive deeper into the complete workout libraries of individual trainers. The FlexPass subscription ($4.99 per month) features access to more than 100 videos from multiple celebrity trainers and workout programs, including yoga, Pilates, kickboxing, boot camp and barre, allowing users to discover the program that fits them best. The Trainer’s Pass subscription (starting at $6.99 per month) offers complete access to a specific trainer’s workout library, as well as nutrition tips and more.

TrainerPass, which is built on CBS Interactive Advanced Media’s suite of digital product offerings, gives trainers the flexibility to manage their content and subscription pricing and interact with their followers through videos, blog posts, and social media integration. Trainers can continuously add new content to their libraries to help followers keep their workout routines fresh—all with the support of CBSi’s customer services team.

Katz foresees the TrainerPass model being emulated for a variety of different verticals. Next up:  identifying areas that “may or may not have an existing audience, whose business model has been disrupted or in which there’s not yet a fully-developed digital business model” and then leveraging the technological and publishing acumen at CBSi to create new interest-based offerings that meet the needs of consumers and foster the growth of the digital content marketplace.

Advertising | Industry-Research

Americans say free, ad-supported online services worth $1,200 a year

Americans assigned a value of nearly $1,200 per year to the array of free, ad-supported services and content currently available to them online, according to a survey conducted by Zogby Analytics. Unsurprisingly, the majority (more than 85%) prefer an ad-supported internet model instead of paying for online content, and three-quarters said they would reduce their online activities “a great deal” if they had to pay for those services and content. At the same time, almost as many say (72.8%) that free internet content such as news, weather, email and blogs is very important.

Commissioned by the Digital Advertising Alliance (DAA), the Zogby Analytics poll of 1,004 adults sought to better understand the aggregate value that Americans perceive in the major types of services and content made available free to consumers because of advertising. Respondents were asked to estimate how much people would have to pay for 17 different types of online services and content, ranging from e-mail to video and weather, if they were offered only on a subscription basis rather than for free with ads.

freevfee

Among the survey’s key findings:

  • Consumers assigned an aggregate value of $99.77 per month to a package of 17 major types of ad-supported services and content.
  • Eighty% of respondents said they had found ads useful in finding new products, researching a purchase, or assisting with the shopping process.
  • The types of advertising that consumers had found most useful were movies/TV shows (43%), technology/devices (37%), clothing (36%), local restaurants (34%), groceries (33%), phone/internet services (32%), and travel (30%).

Zogby Analytics was commissioned by Digital Advertising Alliance to conduct an online survey of 1004 adults in the US. The survey was conducted from April 19-20, 2016. Based on a confidence interval of 95%, the margin of error is +/- 3.2%age points.

Advertising | Innovation | Perspectives

The future of media depends on great consumer experiences

With audiences widely dispersed among mobile and social apps – and, soon, virtual reality and augmented reality experiences– publishers who want to thrive must both follow consumers where they want to go and meet them on their own terms.

These were a couple of the themes that emerged from the wide-ranging conversations at Digital Content Next’s annual members-only Summit 2016 in Miami. DCN members met to explore content and business models given that consumption patterns are constantly changing, many consumers are actively avoiding advertising, and digital intermediaries are extracting much of the value out of the publishing economy. Speakers and attendees talked about changing their relationship with programmatic ad marketplaces, seeking alternative sources of revenue from subscriptions and memberships, and aggressively pursuing revenue diversification.

In his opening remarks, DCN CEO Jason Kint noted that although the Interactive Advertising Bureau recently celebrated the milestone of $50 billion in revenue generated by online advertising, more than 50% of the revenue currently goes to two companies: Google and Facebook, with premium publishers collectively garnering about 15%.

“Most of the money doesn’t actually get into your pocket to pay for the professional content, the entertainment and journalism you all do,” Kint said. DCN’s mission is “to make sure the next $50 billion is different.”

Premium publishers need to build on the trust and reputation they enjoy, rather than fighting with consumers over their use of ad blockers, Kint said, pointing out that a blockers are a symptom of consumer dissatisfaction. Smart publishers need to look at the opportunity “in the growth of this audience that is looking for content on new terms.”

“It’s a symptom of a bad user experience – users taking action on their own,” agreed Justen Fox, senior product manager for revenue products at Vox Media. Consumers are weary of pop-up and pop-under ads, not to mention advertising that contains malware. He finds that the use of ad blockers is higher with social and referral traffic, undermining audience acquisition, and said it’s also higher with returning visitors to Vox’s websites. If publishers and advertisers fail to clean up their act, the problem will keep getting worse, he said.

“Focusing on the user experience is actually the long-term solution,” Fox said. However, no publisher can do it alone because consumer impressions are formed by the experience they get across all media sites.

Sarah Frank, executive producer of Now This News, said that killing their website and forgetting about SEO is the best decision they ever made. It gave them the mandate to create content experiences optimized for different social channels so that consumers have a great experience wherever they find Now This content.

Marketers take action
Meanwhile, marketers seeking to distinguish themselves from the bad actors in digital media are increasingly creating their own content to build positive customer relationships—with or without the help of publishers.

marketerpanel
(L-R) Dave Peck, Global Head of Influencer & Social Media Marketing, PayPal; Katrina Craigwell, Director, Global Content & Programming, GE; Christopher G. Laughlin, Client Services Director, SapientNitro; and Laura Henderson, Global Head of Content & Media Monetization, Mondelez International

“We’re trying to figure out, how we stop interrupting the content and become the content,” said Laura Henderson, global head of content and media monetization at Mondelez International.

Her group has gone as far as to decide the content it creates ought to be good enough to make money on its own merits. One of the products from this division of Kraft Foods, the Oreo Twist, Lick, Dunk mobile game, made back 2.5 times the money spent to produce it, with about 5 billion virtual Oreo cookies dunked, Henderson said.

Like publishers, marketers “feel the pain of ad blocking, of our content being skipped, blocked, avoided at all costs – which means we need to figure out a new way,” she said.

Katrina Craigwell, director of global content and programming at GE, leads a team dedicated to connecting with lovers of science and technology on any medium or platform where they can be found. These content creators compare themselves less with their traditional industrial competitors than with media sites that create engaging tech content, be it the SyFy Channel or the people at NASA who produced the “7 Minutes of Terror” Mars lander video.

Asked if she had any use for publishers now that GE can publish its own content, Craigwell said she looks for partners who know how to tell a great story or can help the firm figure out an approach to emerging formats, such as virtual reality.

Building brand strength
Many of the discussions of how publishers adapted concerned how they preserve their brand value while adapting to new business and content delivery models. The Onion Chief Operating Officer Kurt Mueller said that is something the satire site has had to be careful about with its experiments in native advertising: content is sponsored by advertisers but produced by the editorial staff.

The challenge is readers expect a certain attitude from Onion content, “and if we don’t give it to them, it comes off really badly for both us and the brand. You’re just creating ads if it’s not authentic to what you are,” Mueller said.

Laura Evans, VP of audience development and data science at Scripps Networks Interactive pointed out that data offers an excellent way to understand customer preferences, which can be leveraged to create better experiences. The goal, said Evans, is to “turn a visitor into a brand loyalist.”

As Membership Economy author, Robbie Kellman Baxter put it, “you need to love your customer more than your product” in order to create a positive relationship that will last a lifetime. And, as DCN CEO Kint pointed out in his opening remarks, “No business has succeeded, long term, without giving its customers a great experience.”

David F. Carr is a writer, editor, web consultant, and student of digital business. He is a Forbes contributor, a former InformationWeek Editor-at-Large, and the author of Social Collaboration for Dummies.

 

Innovation | Revenue

Customer-first strategy reflects—and builds—the power of the brand

Revenue diversification has long been a focus of media organizations but lately, the rise of ad blocking has underscored its importance. All trusted media brands have built enduring relationships with their customers—audiences and advertisers alike—however, developing new revenue streams is not a one-size-fits-all proposition. Publishers contemplating  new sources of revenue  must carefully consider options that deepen those customer relationships or fill their new or nascent needs while also protecting the power of their brand.

With that in mind, Digital Content Next added a new members-only event to it mix: Power of the Brand, held December 1st at Conde Nast’s new home at One World Trade. The event featured a wide range of non-advertising-based revenue opportunities being explored by media companies. On the Media co-host Bob Garfield—who admittedly spends much of his time chronicling the failure of media to effectively monetize digital—kicked off the day by outlining the dominate revenue strategies that publishers are using today.

Phil Terry, CEO of Collaborative Gain, Inc. set the tone for the day with the revelation that most consumer and product experiences are mediocre because the vast majority of them are created without actually including the consumer in the creative process. In part, he says this is due to “the arrogance of past success,” which can create dangerous product development blind spots.  Instead, Terry says that those leading innovation strategy—be it the C-suite or product managers—need to get out and see how customers are actually using their products. This allows them to identify pain points and genuine opportunities.

Paying For It
DeniseBobGarfield came back to the stage to interview with Denise Warren, President-Digital & CEO, East Coast Publishing for Tribune Publishing, about one of the toughest revenue streams: subscription models. Warren, who hails from The New York Times (which recently reached the 1 million digital subscriber mark) joined Tribune publishing in May and  has already announced plans to change the way it charges for online content in 2016. The Company will be shifting to the metered model, which Warren said allows customers to decide what sorts of stories are most valuable to them.

However, Warren emphasized that they will also focus on monetizing their most differentiated content—which for many Tribune publications is local investigative journalism. The big challenge in moving customers from free to fee is helping them recognize the value proposition which Warren said requires that they understand the audience. “Then we have to help them understand that we have what satisfies them and scratches their itch.”

Bring the Brand to Life
NPRCertainly, this understanding (and subsequent customer satisfaction) is unique to each brand. NPR listeners become super-fans of on-air personalities and, according to Executive Director of Marketing and Branding Alan Feldenkris, NPR is increasingly exploring ways to “monetize that fandom” through live events. Success at NPR starts with brand love and affinity and, Feldenkris said, live events deepen their customer relationships while providing the potential to develop new revenue opportunities.

Fans of Refinery29 rely on the brand to offer stylish, creative and accessible fashion inspiration. CRO Melissa Goidel said it is essential for Refinery29 to remain true to its audience above all. So when they were thinking about New York’s Fashion Week—one of the most exclusive events in the world—they took a different approach and decided to throw a giant party that everyone could attend. The resulting interactive fashion and art event, 29 Rooms, attracted 6,000 live attendees and reached 1 in 6 Instagram users worldwide. While the event had sponsors, the company viewed it primarily as a way to extend audience engagement into the real world. They recently produced a similar event celebrating #MinnieStyle, demonstrating the ability to monetize that engagement.

Few brands garner as much fan engagement as Time, Inc.’s Sports Illustrated Swimsuit Edition but, according to Ian Orefice, Time Inc’s Head of Programming, until recently they had “given away” one of the most exciting aspects of the issue: the cover reveal, unveiling it on popular television shows. Orefice said they had an “ah ha moment” this year and created a sponsored original video in which model Hanna Davis learns she’s that she’s made the cover. He said that Time Inc. is now “trying to act more like a TV production company and think about windowing,” so that it takes strategic approach to video that allows the company to make the most of its assets monetizing them through licensing and other partnerships.

Learn as You Go
For Rodale, its assets include a wealth of health and wellness lifestyle brands, which the company leverages through print and digital subscriptions, utility apps, ecommerce and books. The company recognizes that its customer relationships revolve around the deep subject matter expertise of its writers and editors and is currently beta-testing a new way to offer that expertise to those who want to dig into a subject and learn more: Rodale U. Offering courses on topics from running a marathon to clean eating, Diego Sanchez, Executive Director, Digital Business Development says that, based upon internal marketing alone, Rodale has already driven more than a million people into the platform with a paid conversion rate of over 1%. And just this week, Rodale U debuted its first sponsored course.

Clearly, each of these brands is driven to drive revenue beyond traditional advertising opportunities. But they are driving safely. Throughout the day, the recurring theme was deep customer understanding and creating value for these customers in order to build new roads that lead to engagement and revenue.

Revenue

The Secret to Harvard Business Review’s Subscription Success: Its Customers

Want people to pay for your content? It’s simple: Get to know their needs, and create content experiences that meet them. That may sound simple but as Harvard Business Review’s (HBR) success shows, it takes a lot of work to get it right.

Josh Macht, Harvard Business Review Group Publisher, describes their process as an on-going conversation with customers. These days, that means finding multiple ways to interact with not only HBR’s 285,500 paying subscribers, but also the 5 million people in its database. These interactions take place through live events, in-depth querying of the 19k members of its advisory group, and a significant investment in analytics. Macht says HBR has become “increasingly scientific with data and analytics on the backend” but that all of these approaches in tandem are what provides them with the ability to design products users not only want—but are willing to pay for.

Vice President of Marketing Sarah McConville describes it as a Venn diagram where the ideal subscription offer is conceived of at the intersection of content, format and audience. “Obviously, it all starts with producing high quality content that our readers find valuable and we are always thinking about how we can continue to stay on the cutting edge of business research and thought,” she says. McConville also points out the many ways that HBR has expanded their format over the past five years—from its redesigned website, to a magazine redesign that’s in the works, as well as its print and ebooks, digital tools and events. Emphasizing the role that audience understanding plays in the company’s subscription strategy, she also notes HBR’s “significant investment in understanding our readers through audience research, website and social behavior analytics, and targeted discrete research.”

HBRvisuallibrary_1The clearest example of both the product development and subscription strategy emerging from this process is HBR’s Visual Library, which made its official debut in June. It allows paid subscribers to access a continually expanding collection of HBR’s charts, infographics, and fully customizable slide decks. The product came about after customer research revealed how many users rely on HBR information for their own presentations and the value of making that process easier for them. Both the research and new offering have paid off: On the day the Visual Library was announced (via its 5-million strong database), it became the second most trafficked page on the site, almost immediately triggering renewals by a slew of previous subscribers who had not yet re-upped. And the Visual Library generated more than buzz and renewals; it brought in new subscribers at an increased subscription price.

“What we’re trying to do is not take the approach of ‘add more, pay more,’” says McConville. “Instead, we try to find the right combination of elements that justifies a higher price.” She points out that as the print-to-digital migration has evolved, we’ve seen readers go from a wiliness to pay for, say, a tablet edition in addition to print to “merging the value of digital and print together.” To charge a premium, she says today’s content consumers demand more than format, they need tools that allow them to leverage the content in ways that “save them time and gives them confidence.”

Macht recognizes that, given the media industry’s increasing concern over the volatility of the advertising market, a wide range of publications are considering subscription offerings. However he also identifies a significant hurdle standing in the way of their success: “Though they say they want to get into the subscription business, they are still in the ad business. A dual focus is really difficult to support.” Unfortunately, many of the underlying requirements in driving the views necessary to support an ad-supported model run counter to those of developing a robust subscription business.

Macht knows firsthand how challenging these internal cultural shifts can be, pointing out that “way back when I first joined, we needed to open up the funnel, but the DNA of the organization was ‘we sell everything so we can’t give it away.’ But we didn’t have a pulse on the web.”  Years later HBR is flourishing online both at its site, which boasts 5 million visitors a month, and through its 6 million social media fans and followers. This year’s new website design was accompanied by a redesigned freemium model. Now anonymous users can access five free articles a month, and if they register—making them a more highly addressable audience—they can access up to 15. HBR has also opened up the site content and toolset to those registered users for July and August, which has already doubled the daily average of people registering.

Then the process of getting to know these recently registered people to subscribe begins in earnest. And that, as Macht and McConville will affirm, is not just about conversion, it’s about an ongoing conversation.

©2026 Digital Content Next. All Rights Reserved.