How Axel Springer is adapting its pricing strategy to grow reader revenue
Axel Springer, publisher of popular tabloid Bild and newspaper Welt, is bullish about the prospect of growing its reader revenue this year by adding new subscribers and increasing the lifetime customer value of existing ones.
The German media company has 568,000 digital subscribers across two titles, Bild Plus and Welt Plus. Over the next year, it will grow subscriptions by increasing content output, such as video which it’s found to be a clear subscription driver on Bild; developing products that lead to more dynamic paywalls; and adapting the pricing of its products. It’s already seeing signs of success with the latter, said Stefan Betzold, managing director at Axel Springer.
On Welt Plus, which has 110,000 digital subscribers, it now offers two rather than three pricing bundles since it dropped its one-day access pass early last year. According to Betzold, the day pass was preventing the publisher from growing subscribers. Instead, it’s increased the price point of its highest tier bundle to €19.99 ($21.66) a month for a year with the first 30 days free. As a result, Welt’s subscribers grew by a record 26% in 2019. Typically, annual growth hovers around 10%, said Betzold.
“I don’t see three prices on Netflix,” said Betzold. “Our lesson from the last six years is to make it simple without too many variations. On Bild, we had six prices six years ago.”
Price used to be a binary way of denoting value. Now publishers are exploring how else to communicate the value of a subscription whether it’s through longer-term savings, browsing under without being tracked as German publisher Spiegel now offers, access to membership perks like events or ways for people to customize their subscription, said Shiv Pabari director at strategy consultancy Simon-Kucher & Partners.
“It’s more nuanced than the number of packages you offer,” Pabari said. “It’s how you design, communicate and upsell them.” Eye-tracking research carried out by the consultancy found people only look at the first three or four elements to a subscription package. “If the key value isn’t communicated first it’s not going to drive many subscribers,” he added.
Last year on Bild, Axel Springer dropped a low-cost first-month free trial of 99 cents, increased the monthly price from €4.99 ($5.41) to €7.99 ($8.66) while offering a 50% yearly discount for the first 12 months. The idea is that building a more regular habit will retain more readers. As a result, a higher number of people stay subscribed for the second and third month and also the 13th and 14th month.
Equally, publishers can be more flexible in the offers they show to audiences depending on how they segment them, as Welt has found. As a precursor to a dynamic paywall that offers up different content, messages and pricing to different audience cohorts, Axel Springer experiments by serving relevant content to specific segments on the homepage. According to Tobias Henning, general manager premium, steering the right audience groups to a subscription via its topic sections on Welt’s homepage increased subscriptions by up to 50%.
Pricing was the third most important driver in improving publisher’s paid content strategies out of eight potential drivers, according to a survey on 100 publisher delegates at Axel Springer’s paid content strategy conference last week. Retention and reaching new audiences were the first and second most important key drivers, respectively.
French newspaper Le Monde, which has 235,000 digital subscribers, also found that lowering the pricing tiers of its digital subscription packages was the most effective way to reduce churn, said Alexis Delcambre, deputy editor. In early 2017, it had one price point: €1 the first month then €17.90 ($19.39) a month. Now it’s lowered the entry price to €1 the first month then €9.90 ($10.73) per month for the first year. It noticed two results: Subscribers’ session length was longer and it grew subscriptions by 45%.
Axel Springer’s goal is to grow both subscription and advertising revenue. The latter is still growing but facing more headwinds. The publisher doesn’t split out revenue driven by subscriptions versus advertising, but Welt has a more balanced mix. Bild has 458,000 digital subscribers but is predominantly ad-funded, the majority of the content is free for its 13 million unique monthly visitors, according to Comscore stats from last December. Welt has 110,000 digital subscribers and 9.3 million unique monthly viewers, according to Comscore, (the monthly internet population in Germany is 61 million people).
There’s room for subscription growth in Springer’s domestic market: Only 8% of Germans have paid for news this year compared with 15% in the U.S. and 34% in Norway (according to Reuters Digital News Report).
“I would say there is no subscription fatigue,” said Betzold. “The New York Times has had record growth [last year]. This proves the opposite. It inspires us to work harder to show the country and the press there is no fatigue. Now the party starts.”
BuzzFeed will finally monetarily reward its Community users for their viral quizzes, lists
BuzzFeed is testing to see if user-generated content could identify new areas of coverage for its staff, and bring in niche audiences, with a new summer program that could pay a contributor up to $10,000 for a viral post.
Cheat Sheet: How Shopify’s one-click checkout expansion could help Facebook, Google compete with Amazon
Shopify's Shop Pay option will compete with Amazon’s one-click buying button, potentially making it an even bigger competitor to the e-commerce giant.
The TV upfront marketplace is moving along at breakneck speed, and eye-popping ad-rate increases
The TV upfront marketplace is wrapping up at a fast clip, with media buyers paying significant increases to secure ad time for their clients.
SponsoredHow three top brands transformed their video ad strategies to follow the views
Brian Albert, managing director, U.S. Agency and Brand Solutions, Google Video watch time, particularly for streamed content, is booming. In December 2020 alone, over 120 million Americans streamed YouTube or YouTube TV on their TV screens. Many advertisers are meeting consumers where they are by reinvesting in digital video. In particular, these three brands transformed […]
Amazon is blocking Google’s FLoC — and that could seriously weaken the fledgling tracking system
Amazon's under-the-radar move could be a significant blow to FLoC targeting performance and give Amazon a leg up in its own ad sales and targeting efforts.
How the Betches founders turned a blog into a multi-platform media company for young audiences
For Betches, there is more real estate in the millennials demographic to grow its audience, but with Gen Zers making up a large portion of the internet, platform growth strategy is top focus for expansion.