A prediction for 2019: The year we flex our funnels
To kick of 2019, we're re-posting an article first published by one of our team members last September because of it's spot-on forecast for the New Year—as publishing industry trends continue to develop, we think it's more relevant than ever.
September 10, 2018
Remember how paywalls were going to save journalism? Sure, they’ve been massively successful at a national or global scale, but for most smaller publishers they have significantly underperformed their promise. What happened?
Think about the funnel. Everything leads to subscription conversion, a singular focus in many publishers’ consumer revenue strategies. And sure enough, we’ve finally just about, kinda sorta conquered conversion. We’ve learned how to tease people with just the right amount of content to make the value case and then lure them in with sweet introductory offers that make at least some of them want to pull out their credit cards.
But, if we’re honest, most of our organizations still suck at both retaining current digital subscribers and monetizing the roughly 98% of our monthly unique audiences that aren’t taking our subscription bait (even with our most seductive come-ons). This has to change, soon, if we want to fully realize the promise of consumer revenue that we’ve put so much faith and hope in.
I see three related problems here:
Problem 1: There are simply too many publishers asking people to sign up for pricey recurring subscriptions without demonstrating sufficient ongoing value. (And many of those people are sticking around only because they don’t feel like jumping through the hoops we put in the way of their unsubscribing.)
Problem 2: There aren’t enough easy ways for people to compensate publishers in proportion to the value they do receive (which might be at price points considerably lower than most monthly subscriptions). Put another way, there are no widely used digital equivalents to picking up a paper at the newsstand.
Problem 3: Publishers so far have had zero incentive to solve either of the first two.
But things are changing -- and that incentive? It’s coming.
- A reckoning on retention is ahead as more publishers opt to comply with new California rules that require merchants offering recurring digital payments online to also allow people to cancel online. This could cause retention rates to drop sharply for some publishers.
- Apple’s acquisition of Texture is a shot across the bow to publishers, who have been slow to acknowledge that they cannot fully own the relationship with all of their users. The sooner we accept this fact, the less likely we are to be involuntarily intermediated on someone else’s terms (exhibit A: record companies and the aforementioned tech behemoth). And if we are smart about how we allow others to monetize our audiences on our behalf, we can stay in control and stay close to our most valued and valuable users.
So, what to do?
- The pivot to readers is incomplete. Most newsrooms haven’t fully embraced the mission of creating real value for paying users. This is reflected in how they deploy their staffs, the content formats they choose and the metrics they look to as indicators of success. This change must and will accelerate.
- Google, Apple and Amazon all play in the content sales space, and Facebook has dipped a toe in the water (see: Oculus store). No one holds an insurmountable lead here, and publishers can use this competition to our advantage.
- Smaller, purpose-built platforms such as LaterPay and Scroll are making an effort to help publishers monetize the middle of the funnel. Let’s hear them out.
Consumer revenue is a linchpin in the evolving business model of digital journalism, but our cherished beliefs about the value we provide and how people should pay us for that value need some reexamining. We’ve been too focused on one stage of the funnel. It’s time to flex our “value muscle” throughout. We can’t afford to let dogma and pride stand in the way of success.
Find out how LaterPay can help you monetize a bigger portion of your audience: