Commentary

Newspapers Show Potential To Increase Digital Subscription Revenue

Newspapers have become more dependent on digital growth as they seek to build sustainable businesses with a mix of advertising and reader revenue. A key goal should be to convert as many website visitors as possible into paying subscribers until reaching a point of market saturation, according to Mather Economics.
The consulting firm found the average revenue per digital-only subscriber for newspapers rose 9% from a year earlier to $9.94 a month in June. The increase in digital-only prices included newly acquired customers who responded to promotional offers.
Mather recommends newspapers measure the number of monthly subscription starts compared to unique visitors. The median starts per million unique visitors is about 400, though “best-in-class” publishers have more than 600 starts a month, according to the firm’s benchmarks.
The potential digital subscription revenue for a publisher with 1 million unique visitors can vary by the maturity of its online product and the churn rate. It’s also dependent on what Mather describes as the “saturation rate,” which is the percentage of an online audience that a newspaper can expect to subscribe to digital-only products.
The New York Times, which has prioritized digital subscription revenue amid the longer-term pressures on ad sales, has converted about 5% of its monthly unique visitors, according to Mather’s analysis of publicly available data. Regional newspapers convert about 1.5% of their digital audiences, “but they continue to grow this percentage over time, and we do not believe they are at their saturation levels,” the firm said.
Newspapers can expect to reach a point of equilibrium when their number of monthly stops catch up to monthly starts.
“Increasing the equilibrium level of digital subscriptions can be achieved by expanding the reach of a publisher’s content or by raising the saturation rate through product innovation and development,” Mather said. “Churn is also a factor, but it will primarily affect the speed a publisher reaches saturation.”

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