Online Subscription Strategy Demands High-Value Content

The newspaper industry is a great example of how to implement an online subscription strategy. It’s also a great example of how not to implement it.

Online subscriptions have had a rocky lifespan. Some of us experimented with them for newspapers all the way back in the 1980s with early dialup services such as CompuServe and Prodigy.

It’s worth noting that those services no longer exist. They failed to anticipate that people would rather pay only for onine access and get their content from millions of websites.

Readers never adopted the models with any enthusiasm, and nearly every experiment failed. The appearance of the first Web browsers made the problem even bigger. Why should anyone pay for reading local news online from a newspaper when they could get it for free from TV station websites?

Still, newspapers kept trying. Many of them eventually settled on a business model that allowed site visitors to read X number of articles each month for free. Beyond that number, they had to pay for access.

Even that version didn’t work well. Subscription rates were cheap. Technically smart readers found ways of getting around the paywalls, such as simply deleting the cookies that were supposed to track their behavior. The number of readers who subscribed was small.

All many of these newspapers did was send their readers to other websites where they could get the same content for free. That content includes auto, employment and real estate ads, weather, stock quotes, etc. Even government agencies became competitors by posting public notices, school lunch menus and other information on their own sites.

A Great Example of Doing It Right

The New York Times is a case in point about the right way to roll out a paid subscription strategy.

While many newspapers simply posted their print content online, The New York Times has been an industry leader in building a massive amount of aggregated, high-quality content beyond just the print content.

For example, content from the print newspaper’s travel section goes onto the website. But original content just for the site goes there too. Every topic becomes an opportunity for unique content beyond what the print version offers.

This practice has been constant for years. As a result, the steady flood of new content has created a giant site with substantial value to a reader — for the right price

Instead of charging the typically high newspaper subscription price, the Times has continued to offer online access for the marketing-friendly price of $1 a week. That price is a discount from the “regular” price of $3.75 a week.

As a result of these efforts, the NYT stock price climbed nearly 50 percent in five years. Meanwhile the stock prices of other media companies have taken a dive — all while the overall stock market was climbing.

As of the third quarter of 2018, the company had 3 million digital-only subscribers in addition to 1 million print subscribers.

Think about those numbers. This newspaper company now has three times more digital than print subscribers. They translate into a valuable subscriber database with great advertiser targeting value. More on that point: digital advertising revenue climbed 17 percent in one year.

Subscription revenue now accounts for more than two-thirds of the company’s total revenue. The company has fully embraced a subscriber model in place of the old advertising model.

The Times is proving that an online subscription strategy can work. But it works only if a company delivers substantial value with content, both in terms of quality and quantity.

Simply dumping a newspaper’s content online and charging for access still doesn’t work and never will.