The New Adventures of Tom Sawyer - How to acquire, retain and grow news subscribers - INMA

The New
 Adventures
 of Tom Sawyer
 How to acquire,
 retain and grow
 news subscribers
 grzegorz.piechota@gmail.com
 Researcher-In-Residence, INMA
 Senior Research Fellow, University of Oxford
deep.bi Member of Advisory Board, Deep.BI

1 | How do paywalls do?
2 | How to keep growing?
3 | Who is going to buy next?
4 | Who is going to cancel?

30% Norway
 +5 pp/yr 26% Sweden
 +6 pp/yr
 ort2017
ort 2017
 9% Canada
 +0 pp/yr
 14% 18% Finland
 +4 pp/yr
 Belgium Japan
 +2 pp/yr 16% Poland
 +0 pp/yr 10% +0 pp/yr

 16% USA
 +0 pp/yr 11% Spain
 +0 pp/yr

 Where people paid for 20% Hong Kong
 +0 pp/yr

 online news by 2018
 12% Argentina
 +2 pp/yr 20% Australia
 +7 pp/yr

 % of adult news consumers that paid for online news at least once in the last year.
 Selection of results from surveys in 37 countries representative to adult population in each of them.
 Source: Digital News Report 2018, Reuters Institute, University of Oxford

ix However,
 have athese
 stronger
 averages foothold. Here,
 ReutersInstitute
 Institute
 22
 22
 Reuters
 for all 36 markets obscure the much 15 15
 5%

 REUTERS INSTITUTE DIGITAL NEWS REPORT 2017
 EUTERS INSTITUTE DIGITAL NEWS REPORT 2017
 13
 larger25
es tend 5454
 differences
 25
 toand
 we see in English-speaking countries, Nordic
 beWestern
 muchEurope,
 further ahead. 10%
 411
 4
 DigitalNews
 Digital NewsReport
 Report2017
 2017
 countries,29 where online music and video 10
 29
he services
 gap50 is smaller, but onlyhavebecause
 The more people watch Netflix or listen to Spotify,
 like Spotify and Netflix a stronger foothold. Here,
 50 60
 60 5454 0% 5%
 digital audio and video services tend to be much further ahead. Video Audio Mobile Laptop/ Online Games 4 e-Books
 4 A non- Premium
 s popular.
 In20
 Eastern Europe
 30 and Asia,
 40 the gap50is smaller,60
 but
 60 only because apps desktop news news non-news
 the more people in that country pay for online news
 20 30 40 50 0%
 online audio and video are less popular. Video Audio
 software
 Mobile Laptop/ Online Games e-Books A non- Premium
 apps desktop news news non-news
 website content
online news in the last year: software website content
 select all that apply. Base: All who did not pay for online news in the last year:

 Q7b_2017. Thinking
 Q7b_2017. more
 Thinking generally,
 more generally, whichwhich of the
 of the following following
 types types
 of digital media
 you paid for online in the last year? Base: Total sample: All markets = 71,805.
 (if any)of digital media (if any) have
 have

 you paid for online in the last year? Base: Total sample: All markets = 71,805.

 PROPORTION THAT PAID FOR ONLINE DIGITAL VIDEO, AUDIO, AND NEWS IN THE LAST YEAR – SELECTED COUNTRIES

 50% Video (eg Netflix)
R ONLINE DIGITAL VIDEO, AUDIO, AND NEWS IN THE LAST YEAR – SELECTED COUNTRIES
 Audio (eg Spotify)
 News
 40% 40
 % that paid for online video, audio or news Video (eg Netflix)
 34 34 35 33
 31 31
 Audio (eg Spotify)
 30% 30
 28
 26 26 News
 25
 21 22
 20% 20 20 20 Source: Digital News
 18 18
 16 16 17 16 Report 2017,
 34 35 15 14 13 13 the Reuters Institute,
 10% 33 12
 University of Oxford
 31 30 8 9 9
 7
 6
 28
 0% 26 25
 NOR DEN SWE USA FIN CAN IRE AUS UK SPA GER
 22

Why do people pay for news online?
Is it quality? Is it exclusivity? A good deal?
Convenience? Mission? Gifts, etc.?

Why do people pay for news content online?

 32% 23% 17%
 “It allows me to “I was offered “I like to have access
 to information the
 access news from my a good deal”
 smartphone or tablet” most people do not”

The reasons to pay for news
according to those who paid
at least once in the past year
in 37 countries surveyed.
Source: Digital News Report
2017, the Reuters Institute,
 16% 13%
 “News you pay is
 better than free news”
 “I want to help
 fund journalism”
University of Oxford

32%
 nation-wide news outlets
 in 33 Western markets
 charge for online content
Survey of 397 news websites with the top 15
highest brand reach in 33 Western markets.
Photo: National Park Service, Neal Herbert

If selling content
is like fishing…
Hard paywall & Membership Preaching (we appeal to fish
to jump in to our basket because they love the fisherman)

Freemium Angling with a rod (the better bait, the bigger fish)

Meter Netting (we catch all the fish and then the fattest)

Adaptive Robotic lure (observes all fish to spot the most tasty)

Paywalls as segmentation tools
Users with particular interests = Heavy users = Meter paywalls
Freemium/premium model Sampling limited by volume of articles
Sampling limited by benefits
(particular content or features)

Users with strong attitude towards a brand Users with a mix of attributes
= Hard paywalls & Membership models = Hybrid paywalls & Dynamic/ Adaptive paywalls
Sampling limited by time or unlimited Sampling limited by user attributes such as
(sponsored) demographic, behavioural, interests, and others

Reuters Institute

 REUTERS
 REUTERSINSTITUTE
 Hard
 Most popular paywalls Digital News Report 2017
 2017 8%

 INSTITUTEDIGITAL
 paywall
 E.g. Times, UK

 DIGITALNEWS
 NEWSREPORT
 Freemium/

 REPORT2017
45% premium model

 2017
 Hybrid
 E.g. Bild, Germany
 2%
 paywall
 E.g. Aftenposten,
 Norway

 Dynamic/
32%
 Paid access
 to e-replica
 E.g. El Pais, Spain
 adaptive paywall
 E.g. Wall Street
 Journal, USA
 1%
 Metered paywall Donation/

11% E.g. New York
 Times, USA
 Membership model
 E.g. Guardian, UK 1%
Based on testing 129 nation-wide news outlets in 33 Western markets, April-June 2018.
Source: Grzegorz Piechota for the Reuters Institute, University of Oxford

Maturity of subscription analytics 04 Data-driven
 automation

 Automated data-
 driven editorial
 Predictive and business
 03 analytics decision-making, e.g.
 recommendations,
 channels, offers, price
 Dynamic future
 scenario modelling, Next-best-actions
 e.g. scoring initiated automatically
 Pro-active
 02 reporting propensity to buy by machines based
 or churn, for on set KPIs
 decision support Automated 2-way
 Customised reports
 and dashboards Future-oriented communication,
 KPIs such as e.g. via chat
 Passive and voice bots
01 reporting
 Business
 KPI tracking
 Customer Lifetime
 Value
Canned reports
 Based on Góra, Piechota, Zontek, “Deep.BI Vision:
Generic dashboards Maturity Model of Subscription Analytics Systems”, 2018

1 | How do paywalls do?
2 | How to keep growing?
3 | Who is going to buy next?
4 | Who is going to cancel?

Crossing the chasm New products’ adoption stalls,
 as one redefines its marketing mix for a new segment

 CHASM

 Fans Visionaries Pragmatists Conservatives Sceptics
Based on: Moore, “Crossing the Chasm”, 1991; C. Lee, V. Kumaar, S. Gupta: “Designing Premium”, HBR 2015

Case of Aftenposten Number of digital subscribers
 at Aftenposten, Norway
Since 2013, the paper
tweaked its paywall
to target new segments Norwegian
 elections
of subscribers Tweak
 of the meter
 “Trump bump”

 Tighter paywall

 Switch
 Introduction to a hybrid
 of a paywall Meter+Premium
 Meter Tweak of the premium
 Higher share of articles

 | 2014 | 2015 | 2016 | 2017 | 2018

 Based on: Hansen, “Hybrid model: the six learnings”, presentation at the INMA
 World News Media Congress, June 4, 2018. Photo: Markus Trienke, Wikipedia

The chasm After about a year after the launch
 of the paywall, the growth stalled
 100%

 90%

 80%
Share of visitors

 70%

 60% The reason:
 50% Only 9% of visitors Based on:
 40% hit the meter set Johannessen,
 “Aftenposten adopts
 30% at 20 articles a month hybrid online metered
 model”, Bottom-Line
 Marketing Blog ,
 20%
 INMA.org, Dec. 4, 2017;
 10%
 Hansen, “Hybrid model:
 the six learnings”,
 0%
 presentation at the
 1 5 10 15 20 25 30 35 40 45 50 55 60 65 70
 INMA World News
 Media Congress,
 Washington DC,
 Number of articles read by each visitor in a month June 4, 2018

Crossing the chasm What were the options?
 What NEW
 SEGMENT
 should Aftenposten
 target next?

 Continue Change
 segmenting segmentation
 by behaviour method

 MEDIUM USERS WITH USERS WITH
 USERS CERTAIN OTHER
 INTERESTS ATTRIBUTES
 Lower the meter
 from 20 to 8 articles Introduce a class (e.g. attitudes,
 of premium articles demographics, etc.)

Why did it work? Hybrid of segmentation criteria

 BEFORE THE SWITCH AFTER THE SWITCH
 The segment of heavy
 users filtered by the Light users Medium users
 attracted filtered

 Share of visitors
 original meter was
Share of visitors

 exhausted — whoever by by a new
 wished to subscribe, premium meter lowered
 had already done it articles from 20
 to 8 articles

 Number of articles read by each visitor Number of articles read by each visitor

New York Times The impressive climb to 3 million
 4,000

 News product Meter lowered
 3,600
 Non-news products to 5 articles/mo.
 3,200
 Q4 2017
 Redesign
Number of digital subscribers (in thousands)

 of Crossword
 2,800
 Q4 2012 Launch of the
 NYT starts Cooking app
 2,400
 reporting Q2 2017
 non-news
 2,000
 Meter lowered from subscriptions
 20 to 10 articles/ Q4 2014
 1,600
 month
 1,200 Q1 2012

 800
 “Trump bump”
 400
 Q3 2016 — Q1 2017

 0
 Q1 '11 Q3 '11 Q1 '12 Q3 '12 Q1 '13 Q3 '13 Q1 '14 Q3 '14 Q1 '15 Q3 '15 Q1 '16 Q3 '16 Q1 '17 Q3 '17 Q1 '18 Q3 '18

Based on quarterly reports of New York Times Company and press releases

“Trump bump” is over Non-news products drive the growth
 Net additions to digital-only subscriptions Net additions to digital-only subscriptions
 by product type (in thousands) by product type (in percent)
 400 100%

 News product
 360 90%
 Non-news products
 320 80%

 280 70%

 240 “Trump bump” 60%

 200 50%

 160 40%
 The share of new non-news
 120 30% subscriptions in new additions
 has grown up to 38% in Q2 2018
 80 20%

 40 10%

 0 0%
 Q1 '16 Q3 '16 Q1 '17 Q3 '17 Q1 '18 Q3 '18 Q1 '16 Q3 '16 Q1 '17 Q3 '17 Q1 '18 Q3 '18

Based on quarterly reports of New York Times Company and press releases

Pipeline of lifestyle products Ads reveal various content tests

Source: moat.com, facebook.com, June-July 2018

History of the bundle
 Weekend 1976

 Source: New York Times Co.
SportsMonday, Science Times,
Living and Home… 1976-1978

Growth of NYT New markets vs. New products
 Product

 Current New

 Current 
 Niche content
 Core news product
 modules
Markets

 New Based on diversification
 grid by I. Ansoff,
 International editions “Strategies for
 Diversification”, 1957

What’s next? After the most profitable segments
there’s time for discounts, single article sale, etc.
 The medium- The lower LTV
The highest LTV high LTV

 Fans Heavy Pragmatists Laggards, occasional buyers,
 users promotion seekers, etc.

1 | How do paywalls do?
2 | How to keep growing?
3 | Who is going to buy next?
4 | Who is going to cancel?

Reuters Institute

 REUTERS
 REUTERSINSTITUTE
 Digital News Report 2017
 2017

 INSTITUTEDIGITAL
 Predicting who’s going to subscribe Likely subscribers

 DIGITALNEWS
 behave differently than others: view more pages & for longer

 NEWSREPORT
 REPORT2017
 2017
 200
 Soon-to-be
Av. time on a page in sec.

 Active time on a page and number of page views
 of individual visitors over two weeks subscribers
 150

 Non-
 subscribers
 100
 Prediction model trained on data
 on a Norwegian mid-sized news
 website. Time period for data
 used in th analysis is two weeks.
 50 Source: Grzegorz Piechota and
 Elena Volkova for the Reuters
 Institute, University of Oxford

 0
 0 20 40 60 80 100 120 140

 Number of page views

Reuters Institute

 REUTERS
 REUTERSINSTITUTE
 Digital News Report 2017
 2017

 INSTITUTEDIGITAL
 Usage drives purchase Behavioural signals

 DIGITALNEWS
 are more predictive than interest-based signals

 NEWSREPORT
 REPORT2017
 2017
 Top 3 behavioural variables Top 3 categories based on interests

 Average active time on a page 0.178 Automotive page view fraction 0.087

 Number of page views 0.163 Business page view fraction 0.084

 Number of active days 0.090 Society page view fraction 0.075

Tables show coefficients of Pearson correlation with selected variables. The time period used for
the analysis is two weeks. All results are significant. Based on data on a Norwegian mid-sized news
website. Source: Grzegorz Piechota and Elena Volkova for the Reuters Institute, University of Oxford

Reuters Institute

 REUTERS
 REUTERSINSTITUTE
 Digital News Report 2017
 2017
 Need for differentiated experiences? Subscribers visit

 INSTITUTEDIGITAL
 DIGITALNEWS
 more frequently, view more and view different content

 NEWSREPORT
 REPORT2017
 Digital

 2017
 50
 Distribution of article views subscribers
Number of users in 1000s

 depending on a status of a visitor
 40
 Non-
 subscribers
 30

 Results presented on logarithmic
 scale due to high volumes
 20 of users making just 1 article view
 per month. Based on data
 on a Norwegian mid-sized
 news website.
 Source: Grzegorz Piechota and
 10 Elena Volkova for the Reuters
 Institute, University of Oxford

 0
 0 1 2 3
 10 10 10 10

 Number of article views in a month

Reuters
 Reuters Institute

 UTERS INSTITUTE DIGITAL NEWS REPORT 2017
 TERS INSTITUTE DIGITAL NEWS REPORT 2017
 Digital
 Digital News
 News Report 2017
 Loyalty drives usage News websites that enjoy more
 loyal visits, see more direct visits and less social visits

Pearson correlation coefficients: +0.56 for the relationship of direct visits and loyal visits,
and -0.39 for social visits vs. loyal visits. Based on online traffic data of a sample of 471 news websites
in Chartbeat’s clients network. Data collected on Jan. 1-16, 2018. Source: Grzegorz Piechota
and Sonya Song of Chartbeat for the Reuters Institute, the University of Oxford

Reuters
 Reuters Institute

 REUTERS INSTITUTE DIGITAL NEWS REPORT 2017
 REUTERS INSTITUTE DIGITAL NEWS REPORT 2017
 Digital
 Digital News
 News Report 2017
 Patterns of loyalty Size of the audience or scope of the news
 website does not seem to be linked with loyal behaviours

 Local news sites National news International news

Based on online traffic data of a sample of 471 news websites in Chartbeat’s clients network. Data
collected on Jan. 1-16, 2018. Source: Grzegorz Piechota and Sonya Song of Chartbeat for the
Reuters Institute, the University of Oxford

Engagement funnel
 Driving loyalty, for a news website
 customisation Find and attract

 of experience Non-visitors (content sampled)

 Pillars of news Increase frequency
 user engagement Fly-bys (more days visited)

 Increase depth
 Light users (more pages viewed)

 Increase breadth
 Heavy (more topics,
 users sections viewed)

Based on Golden, “The New York Times”,
IFRA/DCX Digital Content Expo, Oct. 8, 2017 The more engaged, the more likely to subscribe

1 | How do paywalls do?
2 | How to keep growing?
3 | Who is going to buy next?
4 | Who is going to cancel?

Do you remember
Tom Sawyer?

The new adventures

 Mystery shopper study
 10 nationwide news sites in AUS, UK, US
 Customer experience of 3 personas
 87 days / 7793 events recorded
Source: Grzegorz Piechota for the Reuters Institute / University of Oxford, April-June 2018

Reuters Institute

 REUTERS
 REUTERSINSTITUTE
 Digital News Report 2017
 2017

 INSTITUTEDIGITAL
 Responsive paywalls What happens

 DIGITALNEWS
 when a subscriber falls asleep…

 NEWSREPORT
 REPORT2017
 2017
 Only 1 outlet noticed a change in behaviour
 in an etnographic study of 30 customer journeys
Based on testing interactions of three personas with 10 nation-wide news outlets in 3 Western markets,
April-June 2018. Source: Grzegorz Piechota for the Reuters Institute, the University of Oxford

Best practice FT wakes up a sleeper with an e-mail

Another example FT invites another reader for a “free
consultation” to maximise the value of my subscription

Customer
value
nurturing
across the
customer Acquisition Activation Retention
lifecycle:
good Notifications,
 alerts,
 Onboarding
 on-site, in-app,
 Community
 features
practices newsletters in e-mails
 Advocacy
 App, podcasts Push to log in, rewards
 get apps, follow
 Comments, newsletters, Up-sell offers
Based on testing interactions
 save to read later social media,
of three personas
with 10 nation-wide news Friendly divorce
outlets in 3 Western markets, Retargeted ads comment
April-June 2018.
Source: Grzegorz Piechota
 Win back offers
for the Reuters Institute, Ad-block alerts Retargeted ads
University of Oxford Retargeted ads

Post
 -purchase Welcome, set a vision
 of success, introduce
 to the experience
 journey Trial subscribers and secure early wins

 From an event Help create new habits,
 demonstrate value,
 to a habit, Subscribers monitor health

 from behavioural Engage: create communities,

 to attitudinal Engaged facilitate contributions
 subscribers and reward advocacy

 loyalty Provide value beyond
 the product, reward loyalty,
 Members provide upsell, cross-sell
 opportunities
Inspired by K. Baxter, “Membership
Economy”, A. Janzer, “Subscription
Marketing”, and N. Mehta, D. Steinman, L.
Murphy, “Customer Success”

TOP 10 HINTS
 AND TIPS

 Example
 FT is setting a vision 1 Tick the ‘remember me’ box

 of subscribers’ success
 when signing in.
 2 Save FT.com as your
 homepage or as a bookmark

 and educating new
 in your browser.
 3 Download the FT app to your

 customers about the
 smartphone or tablet.
 4 Get started with myFT by clicking
 on ‘add to myFT’ for the topics or

 product 5
 columnists that interest you.
 Set up instant, daily or weekly email
 digests for the topics you have added
 to myFT.
 6 Subscribe to our range of editorially
 curated email newsletters.

 7 Save articles to read later
 and build shareable lists.

 8 Read opinion and comment from our
 top columnists to understand the
 implications of the main news stories.

 9 View and read a digital replica of the
 newspaper with the ePaper.

 10 Build charts in Markets Data to see the
Source: Financial Times 2018 impact of events on share prices.

Example
 Helsingin Sanomat
 is demonstrating value
 premium articles
 with a diamond logo,
 different layout

Source: Helsingin Sanomat 2018

Example Subscribers of Denik N are rewarded
 with a feature to gift premium articles
Source: Denik N 2018

What’s beyond the conversion?

How can we help customers find success?
How can we demonstrate value they get?
How can we grow the relationship?

What’s the success? What
 jobs do people hire media for?

 To acquire information, knowledge, understanding
 To feel emotion, pleasure To gain credibility, status
 To connect with family, friends To escape, divert
Based on media uses and gratification theory by Katz, Gurevitch, Haas, 1973

Paywalls are
segmentation tools, Take-aways?
and the growth comes
from new segments

Usage drives purchase.
Loyalty, personalisation grzegorz.piechota@gmail.com
drive usage Researcher-In-Residence, INMA
 Senior Research Fellow, University of Oxford
 Member of Advisory Board, Deep.BI

Customers may not be
users — demonstrate
value, secure the success