Readers drive 40 percent of Schibsted’s revenue
Fifteen years since launching its first paywall, Nordic publishing giant Schibsted Media has over a million print and digital subscribers, with reader revenue accounting for 40 percent of revenue for its Media division, according to the company.
Schibsted has a goal of getting to €100 million ($114 million) in reader revenue by 2020. But with a monthly churn rate of 9 percent in digital, Schibsted has a retention problem.
“You don’t get money from conversion, it’s from retention,” said Kjersti Thorneus, director of product management at Schibsted Media Group, speaking at the Association of Online Publishers event in London this week. “You’re starting off each month at minus 9 percent. That’s still a lot of leakage. We have to make sure the paid experience is perceived as much better than the free one.”
To improve retention, Schibsted has been trying to predict when people churn, building more topic-specific customer journey models and learning what content drives retention.
Swedish daily Svenska Dagbladet, with 57,000 digital-only subscribers, found that content that converts (need-to-know news like world events) is different from content that drives retention (nice-to-have like art reviews). As such, it has hired two cross-departmental editors who are each responsible for one type of content.
This has led to cooperation between departments when covering the same story from different content types and perspectives. For example, a series on the Swedish housing market from the financial point of view will come from the business department, and from a psychology angle from the arts and culture desk. According to the World Association of Newspapers and News Publishers reader revenue report, the publisher said the number of popular articles has doubled year over year as a result.
According to Bård Skaar Viken, director of B2C consumer business in Schibsted Media, churn rate is 2.5 times higher among subscribers who have paid less than two invoices compared to subscribers who have paid three invoices or more. “The first 100 days of the subscription is crucial. This year we have identified more than 40 experiments to optimize the onboarding phase,” he said.
Recency, frequency and volume are the three factors that identify willingness to pay and propensity to churn, and like other subscription publishers, Schibsted is testing ways to prevent customers from canceling their subscription by re-engaging them with things like emails. People who signaled they would cancel the subscription at a certain date will get an automated offer in the days leading up to it to extend the subscription at a reduced price. In other cases, a green, amber and red flagging system next to subscribers helps customer service reps tailor their offers. The publisher has added little friction to the cancellation flow with positive nudges, but still keeping it simple, and has retained between 10 and 15 percent of subscribers who start a cancellation process.
The Nordics have a tradition of paying for the news. In countries measured by Reuters’ Digital News Survey, Norway and Sweden had the highest share of people who paid for online news in the last year, with 30 percent and 26 percent, respectively. In contrast, the U.K. has 7 percent.
Schibsted created a new cross-departmental, groupwide team a year ago to focus on driving subscriptions with a new focus on retention. The team, run by Tor Jacobsen, svp consumer business, includes top consumer business management from Schibsted’s subscription titles, plus people in finance, human resources, product, tech, strategy and print.
Schibsted’s monthly digital churn rate of 9 percent is good relative to the market, said Greg Harwood, director at strategy and marketing consultant Simon-Kucher & Partners.
“Schibsted is now focused on the metric of customer lifetime value,” said Harwood. “There’s no silver bullet to manage churn. It is ultimately about becoming more data-driven in order to deliver an improved consumer experience that is worth paying for. What distinguishes a good from a great publishing team is the ability to embed this mentality throughout the organization with collaboration and alignment on objectives being the key success factor.”
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