Before digital privacy became the hot topic of interest, everyone was talking about reader revenue models. Almost every publisher in the country was considering how to incorporate reader revenue plans. One of the first companies to take a firm stand on requiring payment for their content was The Information. If you aren’t familiar with the technology-based news organization, you should check them out and take a peek at their unique membership model.
When we saw The Information was hosting a one-day “Media Business Bootcamp” in New York City with a focus on driving subscriptions and membership models, we flew to New York City ready rub elbows with folks from The New York Times, Buzzfeed, Vox Media, and more.
The day started with a presentation from Jessica Lessin, founder and editor-in-chief of The Information. She shared that a whopping 63% of ad dollars are being controlled by Google and Facebook. Lessin also explored the dozens of companies like, Spotify, Netflix, and HBO that are building products that are primarily supported by their audiences. Today, 53% of Americans are paying for news, a number we expect to grow over the next few years.
According to Lessin, there are three rules of building a subscription model business.
Do things 10x better. Your content and your product has to be 10x better than the next.
Know your customer and figure out how to be indispensable to them.
Create a team with unique capabilities. In a world where content is king, content creators are emperors. (Editorial teams, take a bow.)
That’s it! Easy, right? Well, of course, a lot more goes into it. You need content distribution, technology, and audience development, too.
It’s difficult, as Lessin explained, to live in both a reader-supported and advertised-supported world, suggesting that you need to pick a North Star and stick with it. While The New York Times technically has a foot in both, Meredith Levien, COO of The New York Times, shared that they are focused on serving the reader above all else.
But how did they get there? Levien explained that in 2015 print advertising started to fall—hard. That summer, a small group sat down and set a goal of doubling reader revenue in 5 years and vowed to go "all in" on digital efforts. The company’s motto became, “make something worth paying for.”
This, in our opinion, is the model the regional and niche publishers are (and will likely have the most success) emulating. Publishers aren’t thinking about trying to rid themselves of advertising revenue. For most, it’s just not realistic. But The New York Times, albeit a different product, provides a roadmap for how to embrace the shift.
Don’t make bad ads. Make good ads. The New York Times created an entire online product for Samsung with Daily 360. The product happened to be loved by the audience. Ads don’t have to be invasive and bad. The lesson here: align with like-minded brands and create something cool.
Embrace new things. The New York Times was entirely unfamiliar with the podcast platform before launching The Daily. But now, The Daily has more listeners per day than the newspaper ever had print subscribers.
And finally, get serious about retention. The New York Times, as well as The Information, take serious measures to watch for dips in individual audience engagement. Less engagement means they have a high likelihood of churning. It’s important to focus on delivering on the benefits and promises, all while creating an incredible product. But take notice when your audience is becoming disengaged and respond accordingly.
The remainder of the day was filled with down and dirty talk on technologies, platforms, and tactical challenges and opportunities, and of course, some chit-chat with some of the coolest brands in the publishing space.
The big lesson we walked away with was that strategic and tactical audience development has never been more important. Circulation and reader revenue has the potential to grow and even surpass traditional print advertising. The reasons are simple, but the execution is tricky and almost as important as the product itself.
Be on the watch as more brands embrace reader revenue, it’s a topic that isn’t going away anytime soon.