Low-friction models gaining traction to supplement magazine subscription strategies

Readers are still willing to pay for content


While magazine media has shifted to focus on reader revenue streams over the last 18 months or so, the landscape is still fraught with questions and uncertainties. No surprise then that subscriptions have been top of mind for media this year; the subject has been discussed at INMA’s Subscription Summit, and snapshotted by FIPP’s Global Digital Subscription Snapshot. 

As FIPP’s Digital Subscription Snapshot shows, publishers are determined to make reader revenue models work. This year, Condé Nast and New York Media moved all of its titles behind a paywall. In March, news and magazine subscription platform Apple News+ launched, allowing readers to access titles from Meredith, Condé Nast and Hearst for a small monthly payment.

Research shows that readers are becoming more comfortable with paying for content, yet, research also shows that only a small number of readers who pay for content at all. Research Fellow Richard Fletcher noted in the Reuters Institute’s Digital News Report 2019, a small increase in the number of people paying for online news. “It is important to keep in mind that the numbers of people paying for news subscriptions is still low – lower than the number that currently pay for print (either through single purchases or subscriptions) in many cases,” he wrote.

The 2017 report suggested while people did pay for ongoing subscriptions, it was actually more common for people to pay for one-off single-edition purchases, donations and print and digital bundles.

A few years later, this still rings true for LaterPay CEO Cosmin Ene, who believes micropayments can help move consumers through the sales funnel.

“We now see what I would call the new reality of publishing. These reports are just the yellow light in the traffic lights of digital publishing and digital transformation. I think it’s a warning because right now they highlight the trends: they show that revenue might be plateauing and that there might be limitations of subscription models. They don’t necessarily address how to solve the problem, but they at least raise awareness for the problems, and show the data behind it,” explained Ene. “We are committed to showing the industry that there is an alternative path – and that it is profitable.”

To complement subscription models, Ene believes that publishers should look into low-friction models, to make it easy for people to become first-time subscribers. Low-friction models include contributions, donations, time passes and single purchases. “We see this tremendous space between ads and subscriptions that can be entirely monetized and that offers a huge possibility for publishers to compliment their existing subscription models,” he said.

“In order to have success with reader revenue models, we need to offer ease of use and accessibility. We have to make it simple and fast for them to succeed,” Ene said. “Low-friction models make it very, very easy for users to take that very first step from just being a user, to being a first time paying customer.”

Low-friction models, which compliment subscriptions, are vital in order for users to enter a conversion funnel, he said. “You need low-friction models to get non paying users to pay perhaps for the first time ever or to give you some money even when they already have a subscription with someone else.”

Unlike subscription models which generate a lot of interest and revenue at the beginning but flatten out, low-friction models generate incremental revenues that build over time. “That’s how you get people to trust, that’s how you establish value with every click,” Ene said. “Every time someone says, ‘yeah, I will buy this article for 50 cents and pay later,’ you build trust and value with every click. When you get to the point of asking people to register and pay, 85% to 93% of users do so because it’s convenient.”

For example, LaterPay partner PCGames Hardware (PCGH), a technology and games publisher, combined single article purchases, day passes and monthly subscriptions, and saw a 7.7% increase in subscription revenue from subscriptions sold with LaterPay. The growth of subscriptions with LaterPay was 4X that of PCGH’s existing subscription model, which continued in parallel.

And, in 2017, Harenberg Kommunikation launched a premium version of its B2B portal, buchreport.de, titled buchreport.PLUS, Ene explained. Two different LaterPay purchase options were included in the launch – individual items priced between 50 cents and 4.50 euros that could be purchased via the ‘Pay Later’ model; higher-priced products, such as ePapers, analyses and dossiers, that were offered as traditional immediate purchases, he said. Following the successful introduction, buchreport.PLUS increased circulation revenues by an average of 35%, per month in the first year.

LaterPay partners have already seen success in a low-friction model called a digital single copy. For example, using 24 hour time passes, publishers are seeing conversion rates of between 10 and 20% on average. Ene explained. “It’s important to note that this revenue is both incremental and supplemental to subscription income – it comes from the approximately 80% of readers who were unlikely to subscribe to begin with.”

Into 2019 and beyond, consumers will want to buy content personalised or tailored to their own preferences, contexts and schedules. Consumers will pay for subscriptions to very few things that they really value, and magazine media offers exactly that type of trusted, authoritative content that their audiences really value. They just have to make it easier to onboard readers and convert them into paying subscribers.

The article was first published on FIPP.

2023 promises an interesting ride for print in India

Indian Printer and Publisher founded in 1979 is the oldest B2B trade publication in the multi-platform and multi-channel IPPGroup. While the print and packaging industries have been resilient in the past 33 months since the pandemic lockdown of 25 March 2020, the commercial printing and newspaper industries have yet to recover their pre-Covid trajectory.

The fragmented commercial printing industry faces substantial challenges as does the newspaper industry. While digital short-run printing and the signage industry seem to be recovering a bit faster, ultimately their growth will also be moderated by the progress of the overall economy. On the other hand book printing exports are doing well but they too face several supply-chain and logistics challenges.

The price of publication papers including newsprint has been high in the past year while availability is diminished by several mills shutting down their publication paper and newsprint machines in the past four years. Indian paper mills are also exporting many types of paper and have raised prices for Indian printers. To some extent, this has helped in the recovery of the digital printing industry with its on-demand short-run and low-wastage paradigm.

Ultimately digital print and other digital channels will help print grow in a country where we are still far behind in our paper and print consumption and where digital is a leapfrog technology that will only increase the demand for print in the foreseeable future. For instance, there is no alternative to a rise in textbook consumption but this segment will only reach normality in the next financial year beginning on 1 April 2023.

Thus while the new normal is a moving target and many commercial printers look to diversification, we believe that our target audiences may shift and change. Like them, we will also have to adapt with agility to keep up with their business and technical information needs.

Our 2023 media kit is ready, and it is the right time to take stock and reconnect with your potential markets and customers. Print is the glue for the growth of liberal education, new industry, and an emerging economy. We seek your participation in what promises to be an interesting ride.

– Naresh Khanna

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