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A playbook for pay meters, paywalls and digital subscriptions

This research from the Lenfest Institute and The Shorenstein Center illustrates best practices in digital subscription, focusing on the finer points of applying funnel discipline and implementing tools like paywalls and pay meters. The result is a playbook full of tactics to adapt, regardless of a news organization's size or familiarity with reader revenue.

Digital subscriptions and attendant tools like paywalls and pay meters are a quickly growing source of revenue for news organizations. This summary of an in-depth playbook (which illustrates the strategy and tactics of funnel discipline, Table Stake #4) rounds up the best current thinking about how to implement or improve a paywalls and digital subscriptions, including the following highlights:

1. It’s time to get more sophisticated. It is the “end of the beginning” of the digital subscription era. Across the publications studied, news publishers, especially newspapers, have adopted basic digital subscription models this decade. This moment shows standards of performance and best practice are coalescing around structures for newsrooms and the operational teams that support them, suggesting
a longer-term prospect for stabilization of the news marketplace.

2. Industry benchmarks are critical to more sophisticated tactics (see the Shorenstein Center’s email benchmark tool). Among the organizations surveyed, digital publishers are well on their way to evolving a standard for success in subscriptions – shared metrics, many of which are reviewed in this paper, are vital to understand these standards. Measures of market penetration, audience engagement, meter or paywall stops, conversion rates, and retention rates can be used to paint a more comprehensive picture of the health of a publication’s digital subscription business, and can help to determine key areas of focus for a particular publisher’s organization.

3. Intelligent access rules enable publishers to fine-tune and improve their standing. There are no “hard and fast” rules for paywalls. Instead, “intelligent access” evaluates data continuously to create different access control rules for different behaviors. Among publishers studied, targeted intelligent access control rules allow a news organization to optimize its stop rate, or increase the percentage of all users who are stopped monthly by a payment ask. There is no “one-size-fits-all” solution.

4. You must have a sharp focus on your consumers if you hope to increase conversion rates. Once users encounter a payment message, publishers can serve targeted marketing messages based on the user’s history on the site, and offer simplified purchase processes to increase conversion. Across the news organizations studied, we found that subscribers who also receive a publisher’s email news product are 5-10 times more likely to subscribe. Those who follow the publisher’s brand on social media are 4-6 times more likely to subscribe.

5. Pricing variation, churn analysis, and engagement testing are key tools for publishers to keep subscribers engaged. Our research reinforced that by experimenting with price, understanding sources of churn, and targeting subscribers to improve their engagement, publishers can improve their retention rate.

6. Engagement matters, and publishers must continue to innovate to earn attention. Our research found a relatively strong association between subscriber engagement and retention. This suggests that, relative to a publisher’s geography, an engaged reader is a valuable reader. Across the publishers studied, news organizations that performed ahead of their peers tended to deliver distinctive, high-quality journalism – suggesting innovation in quality journalism itself, rather than merely producing a high volume of content, should be a long-term area of focus for publishers.