For just about any local media company, revenue diversification is near the top of the list when it comes to challenges that must be addressed. It is absolutely a strategic imperative. And for so many, that means re-thinking the business model entirely and finding new ways to generate direct-to-consumer revenue, primarily through digital subscriptions.
Two parallel trends inspire “the move to consumer,” and the need to create successful paid content strategies. First, local digital advertising growth is slowing, and according to Borrell Associates data, may actually plateau over the next two years. Plus, so many of those dollars are flowing to Facebook and Google anyway. Then there’s the dramatic evolution of The New York Times business model, transforming from an ad-centric to a subscription-centric business in a short period of time, with digital subscriptions continuing to exhibit strong growth. While The Times may feel aspirational to many smaller publishers, the model is one that everyone is studying.
With these two trends as a backdrop, LMA is taking its deepest dive ever into digital subscriptions and consumer revenue models with the New York regional Innovation Mission, Nov. 12-14– nearly 3 days completely focused on giving local media companies the tools, tactics, technology, know-how, and confidence to build successful strategies in their own markets. Private meetings with The Wall Street Journal, GateHouse Media, The Street, Spirited Media, NYU’s Membership Project Puzzle, and Scroll are all confirmed…with more big announcements coming soon.
Here are three paramount themes the trip will address to give publishers deeper insight and actionable ideas for driving direct-to-consumer success.
“Propensity Modeling” at The Wall Street Journal
Over the past year, the WSJ has made several significant advances with its subscription strategy, namely moving from an inflexible, one-size-fits-all paywall to a dynamic, personal meter that can serve up different experiences to different audience segments based on demographics, behaviors, time of day, and more.
The Journal has taken it a step further, building out a deep database of 65 “signals” that are used to understand how likely someone is to subscribe. The signals include everything from education to location to site engagement over time. A propensity score is applied to each reader, and that determines the experience they are served.
Granted, the Journal has one of the smartest, most advanced paid content approaches across all media, but the application of its propensity modeling is universally relevant. How can publishers use data to better understand specific users, build audience segments, and tailor experiences that create closer brand and content engagement? Jon Buckley, the WSJ’s Director of Digital Subscriber Acquisition and Retention, will “lift the hood” on propensity modeling during the IM.
Making Subscriptions Work in Smaller Markets
While it’s always inspiring to learn from the market-leading insights of the WSJ, there is nothing more relevant than hearing from a peer who’s betting big on digital subscription growth in mid-sized markets. That’s the case with GateHouse Media. While the company’s newspaper footprint is vast, the majority of its markets are DMAs outside the top 25, and that’s where questions about subscription viability often pop up. “It works in New York, it can work in Dallas…but what about Peoria?,” many ask.
GateHouse’s strategic answer is to build a centralized consumer marketing agency to lead all subscriber acquisition and reader engagement efforts companywide. This starts with a unified consumer database that can be leveraged to drive all consumer-facing aspects of the operation, from launching new products to tailoring experiences and offers to specific audiences.
On the trip, we will kick things off with a private dinner with GateHouse executives to learn about their approach, and how any local publisher can think about streamlining data to drive subscriptions.
Expanding Beyond Subscriptions: Launching a Membership Model
For some, membership models are a loyalty play directly tied to subscription. For others, they are a separate business line altogether. IM attendees will learn about both, with case studies to draw from when thinking about how a similar program could work in their markets.
One company drawing lots of attention in recent months for launching a membership program for each of its city sites that isn’t tied to subscription (all sites are open) is Spirited Media, the parent company of Billy Penn, The Incline, and Denverite. It’s part of a larger revenue diversification plan that also includes live events, technology platform licensing, and more. Founder and CEO Jim Brady has done extensive research on why readers become members: is it due to a mission-centered affiliation with the brands, or more about the value that users get when they sign up? Brady will share Spirited Media’s learnings over the past eight months, and how they continue to tune the model to spark more growth.
Click here to learn more about the NYC Innovation Mission
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