Study: Reader revenue strategies are in place, yet prudent processes are not
SUMMARY: A new benchmarking study on reader revenue by INMA and the Institute for Media Strategies found strategies are in place, but no survey respondents were satisfied with them.
ThisThis article is part of the INMA conference blog
In the middle of 2019, 10 local and regional publishers in Austria and Germany gathered to participate in a benchmarking study focused on the “whys” behind reader revenue results at their companies. This study, completed by INMA and the Institute for Media Strategies, was presented at the Local Reader Revenue Symposium co-hosted with Mather Economics at INMA’s Media Innovation Week on Wednesday morning.
Grzegorz Piechota, INMA researcher-in-residence, gave an overview of three major lessons from the study:
- Local publishers have a reader revenue strategy, but they are not satisfied with the execution. “I can tell you from traveling around the world this is a feeling shared by many local news publishers, even by many in this room,” Piechota said.
- Roles, responsibilities, and resources don’t follow success factors. The organisations are not aligned toward their goals.
- Local news content is digital already, but the companies are not. Print-rooted culture is still strong. “It is perhaps the truth that local news is completely digital, but not the companies,” Piechota said.
The study focused on four themes: strategy, oraganisation, subscription initiative, and performance. Dietmar Schantin, founder and chief executive officer of the Institute for Media Strategies, said the study was about validation of results, experience sharing, group challenges, and brainstorming paths forward.
“We did workshops where we started with these results and tried to find solutions if there was a problem and brainstorming sessions trying to find a potential path forward,” Schantin said.
Asking study participants where they were in their strategy revealed there was nobody who implemented more than two-thirds of the objectives they had, Piechota said.
“We found it pretty puzzling that many publishers launched their strategies without a clear idea of where it’s going,” he said.
Showing a chart that compares the price of a subscription with the subscriber growth rate from 2016-2018, Piechota said there was no obvious correlation between the business model and growth.
“Execution is important, and it seems that some people just executed better than others,” he said.
The study then asked participants about success factors of subscriptions. Features like apps and newsletters were offered by nearly all participants (90%) and extras such as premium content and video were offered by 70%. Only 50% offered group or family access, and 40% said they offered elements such as ad-free or ad-reduced user experiences.
What does this mean? Piechota said it seems that companies have not really thought out their subscriber benefits.
“One of the big findings is that it seems that, because the answers are pretty inconsistent, it seems that people haven’t really thought it out,” Piechota said. “And this is not a criticism. It just means that the process of forming the strategy and then implementing the strategy hasn’t really been carried.”
Exploring what data publishers gather about subscribers, all participants report tracking visits, articles/pageviews, and reading time. Only 10% report tracking payall views, paywall clicks, and purchases. It seems publishers do not know what actually converts, Piechota said.
“It’s impossible to say how they come up with these answers without actually having any data,” he said.
Extrapolating lessons from the survey results was the most interesting part, Schantin said. Asking survey participants what they believe is the key factor for subscription success, product/UX, content, and people made the top of the list. Marketing ranked at No. 7. They then asked who is actually responsible for the acquisition of audience and retention.
“Product and UX people were only in 10% of the cases actually responsible for acquisition and retention,” Schantin said. “Content — i.e. editorial — was also very low. The highest one was actually marketing and promotion.”
This indicates a misalignment further emphasised by where the companies have invested in resources and staff, Schantin said. Marketing, on average, only received 17% of resources while product/UX and content received 22% and 29%, respectively.
“This is, I think, one of the main conclusions that basically might hold us back as an industry,” Schantin said.
All participants agreed on one thing: 0% reported being very satisfied with the results of their reader revenue strategies.
Success in digital subscription is not about what system or technology companies use, it is mainly a cultural problem, Schantin said. Publishers are stuck in an old way of working, trying to navigate growth strategies across multiple silos.
“And this is where most houses are still struggling, to break out of the silos and work together,” he said.
Piechota added that the old way of thinking, the one that considers digital separate from the rest of the company, keeps companies from hiring the right people and instituting the changes needed to succeed: “Unless we find the roots of the problem, we’re not going to change it.”