Commentary

'Wall Street Journal' Internal Report Highlights Battle Of Conversions, Churn

The Wall Street Journal assigned a team of editors to study ways to expand the paper's digital audience and subscription revenue. Their work culminated in an internal report kept mostly under wraps until last week. Though the report was from last summer, its analysis should resonate with other publishers grappling with shifts in media consumption.

News Corp, the parent company of WSJ publisher Dow Jones, seeks to double the paper's number of subscribers. That goal will require sustained web traffic of 100 million monthly users by June 2024, according to the report, which The New York Times posted online last week.

The problem with that 100 million goal is that the WSJ's unique visits rarely exceeded 50 million a month for a sustained period. Dow Jones disputed that number, claiming traffic averages about 55 million, the NYT reported. Traffic peaked at 79 million in March 2020, when it gave people free access to its pandemic coverage -- a civic-minded move that other news sites also adopted.
The WSJ's conversion rate was between 0.1% and 0.15% and hadn't improved much since early 2017, highlighting a missed opportunity for the paper.
“Even when we've had huge spikes in traffic, like we did during coronavirus, we haven't materially improved our lasting, ongoing ability to convert visitors to become members," according to the report. "To move the needle significantly in our total digital subscriber base over time, we will need to sustain a far higher number of unique visitors.”
Churn also is a key area of concern, partly offsetting gains in conversions. Excluding student and corporate memberships, the digital subscriber growth rate on its website had been about 8.5% a quarter since 2015, but the churn rate was 7%.
“Another way of looking at this: We have had 2.459 million people purchase a new WSJ digital subscription on site since July 2015. But our net increase over that period is 392,868," the report said. "Our annual churn rate is 25%, while Netflix's annual churn rate is 11%.”
The report tells a more complete story than its quarterly earnings disclosures, which showed healthy growth by the end of the year. The WSJ's digital-only subscriptions grew 28% from a year earlier to 2.46 million in the fourth quarter, while total subs expanded 19% to 3.22 million, according to a statement.

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In addition to churn, the report highlighted how a small group of its subscribers drive most of its website activity. About 300,000 subscribers didn't visit its website in June, while a similarly sized group had one to five "active days." More than 250,000 subscribers visited at least 16 times, a group identified as "super" users.
“Part of our challenge is that many of our subscribers don't come to us very often," the report said. "We're focusing far too much on keeping our super users, when they're the least likely to churn.”
The paper sees a need to expand its audience beyond 15% of the adult news-consuming population and bring those people into the purchase funnel, while also improving conversions.
"If we want to grow to 5.5 million digital subscribers, and if we continue with churn, traffic and digital growth  where they are today, it will take us on the order of 22 years," the report said.
Tomorrow, I'll look at the report's recommendations for expanding its audience -- including measures to reach younger audiences that are more multi-ethnic versus older demographic groups that comprise core WSJ readers.
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