The publishing industry was among the first to promote the concept of subscriptions. Yet, up until recently, it had done surprisingly little to offer anything other than a basic deal. The only perk for a subscriber was the thud as the publication hit the doormat each week or month, rather than having to buy it at the newsagent like everyone else.
Now the rest of the business and media world has caught onto the benefits of subscriptions in a big way. You just have to consider the success of Spotify and Netflix to recognise this. The model has even spread to small, but constantly used, consumer products such as coffee and razor blades.
Of course, the digital revolution has changed everything in the publishing world. Pushed by huge revenue shortfalls (the global newspaper industry has lost 39% over the past six years), publishers are being forced to come up with some new ideas to make this way of paying for content more attractive to readers.
When you consider the benefits of subscriptions, it’s remarkable that publishing is only just waking up to the real potential. For example, they provide a much-needed and recurring income; they also encourage stronger bonds between the newspaper or magazine and its readers. In turn the publication gets to know its readers better and can hone its content accordingly and upsell more value-added options.
To be fair, most of the nationals – such as The Guardian, The FT
and the Daily Telegraph
, for example - are already highly sophisticated in the way they are exploiting the business model – creating a club-like community for its subscribers or ‘members’ with special offers, courses, and specialist information such as investment advice and exclusive events. Yet there are still many titles – including regional, local and trade press – that are still struggling to find a way to move forward.
But, let’s face it, with advertising income dropping like a stone, subscriptions are becoming one of the few sustainable ways to monetise online content.
This need has been brought into even sharper focus by the fact that at least 33% of traffic to and from online news outlets now comes from mobiles. Somehow publishers and media companies need to develop multi-channel packages and be prepared to keep reviewing and adjusting them to suit an evolving market. A subscriptions price cut or a particularly attractive bundle from another publication can cause mass migration, so there’s an urgent need to offer something different to stand out from the crowd.
Despite this, often it’s not creativity that’s the problem. Ideas are a publisher’s currency and usually they find innovation relatively easy – evolving and refining their offerings to ensure they are always one jump ahead of the competition.
No, the challenge lies in more prosaic matters – and usually these reside in the back office. The main barrier to change for many businesses are their traditional billing and accounting systems which tend to inhibit fast and decisive action in response to these shifting demands.
So how can these barriers be overcome? Here’s my advice:
• Consider the cloud – it’s increasingly clear that old-style ‘on-premise’ IT systems just don’t provide the flexibility needed. Whereas these were probably expensive and took months or years to implement, configure and integrate with other applications, the implementation of a cloud billing system will typically take a matter of days or weeks and can often be done in-house, without expensive consultants.
Cloud billing will also dramatically cut the time taken and the costs incurred in setting up new services or packages and getting them first to market.
• Be prepared to fail and try again – Every publisher will have their own way of making a success of a subscriptions model – but it will no doubt involve multiple pricing plans and various upsell options such as pay-per-use extras and bundled packages. So the key is being free to experiment, accept when something isn’t working and quickly try again until you get it right. And then it will be time to start the cycle again with your next offering.
• But be careful to distinguish between cloud billing and cloud-based billing – It’s important to look for the former. Cloud-based billing is typically a standard, on-premise billing product hosted somewhere in the cloud. It would be better described as ‘cloud-hosted’ and is unlikely to support the principles of Software-as-a-Service (SaaS), leaving you stuck with the same inflexibility and dependence on the vendor’s professional services.
Top tip: If a vendor can’t offer you a free trial, then it’s probably only cloud-hosted.
• Think long-term too – It’s difficult to know what will work in the future, but make sure you have a system that will cope with most eventualities. For example, you may want to start off with just basic subscription billing, but you could soon be looking for more complex, granular pricing models to monetise more of your online content. At some stage, you may want to combine subscriptions with a paywall based on usage, as well as offering combined print and digital packages. And finally, check scalability – can your chosen solution grow with you and support expanding performance demands.
Following these simple guidelines will mean creating a subscription relationship that makes it easy for readers to by additional services from you – and crucially less likely they will suddenly decide to go elsewhere.
This article first appeared in TFM&A Insights.