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September 28, 2023

Who pays for news? Discounts lure in new subscribers but many cancel rather than pay more

At least one-third of news subscribers cancelled or renegotiated their price in the past year.

By Aisha Majid

Discount offers are effective in attracting new subscribers to newsbrands, but many consumers are reluctant to move onto a full-price subscription once the trial ends, according to a new report from the Reuters Institute for the Study of Journalism (RISJ).

At least one-third of news subscribers cancelled or renegotiated their subscription price in the last year, according to the research based on survey data from 20 countries and interviews in the UK, US and Germany.

The report found that the share of people saying they had paid for news has grown from 10% to 17% over the past decade, but payment for news is now levelling off.

News subscriptions cancelled amid cost-of-living crisis

Tightened budgets in the context of the cost-of-living crisis as well as a feeling among some consumers that they did not use their subscription regularly enough were responsible for cancellations.

The RISJ also found that people who cancelled their news subscriptions in some cases did so as they felt restricted by subscribing to a particular brand.

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Young people in particular were more likely to prefer accessing news from different sources. Almost a third (29%) of US subscribers under 35 are subscribed to Apple News+, compared to 13% of those over 35.

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Despite the downturn the report noted that the overall number of subscribers has remained broadly steady, and some brands have continued to grow their subscribers albeit at a slower rate.

Report co-author Nic Newman, researcher at RISJ, said: "This research shows how price-conscious many consumers have become amid the squeeze on household spending and how new approaches will be needed to attract reluctant subscribers.

"Lower price products, all-access subscriptions, differential pricing, and digital wallets are all in the mix as the industry tries to better match price to the perceived value of different news consumers."

News consumers 'conditioned' to expect special offers

"One of the biggest surprises" of the research, the report said, was the variety of different prices being paid for the same subscription as many subscribers are offered lower prices at the end of their contracts to prevent them from cancelling.

The report noted: "Consumers have become conditioned to expect special offers and these introductory prices are often hard to wean consumers off when the renewal comes around. The jump from a trial price to the full sticker price has become a key challenge for publishers."

Publishers are as a result experimenting with differential pricing at renewal based on factors such as how much content is consumed during the offer period and special deals for certain groups such as students and youth.

Differential pricing, said the report, offered a largely untapped opportunity for publishers to attract people with an interest in news and a strong connection to a brand who are looking for better sources of information.

The main problem, the report said, was "a mismatch between the price they are being asked to pay and what they think a news subscription is worth". The report recommended that publishers look at customers’ perceived value of news when deciding on pricing strategy.

To minimise the risk of churn, many publishers, particularly in the US, are now opting for longer trials in the hope of building loyalty. Publishers are also paying special attention to the first 90 days of a new subscription to familiarise the user with the brand and encourage a regular habit.

News subscribers: Male, older, richer

The study found that long-term news subscribers were most often male (60% of subscribers), older, richer (79% have medium to high household incomes) and better educated, although age was a reflection of the demographic makeup of the survey respondents as younger consumers were less likely to have paid for news.

People more interested in politics were also found to be more likely to pay. In the US, 79% of subscribers or donors said they were very or extremely interested in news and 74% said they were interested in politics.

The fact that just 30% of those who are interested in news currently pay for it pointed to a potential opportunity for publishers if they could find the right strategy, said the report.

Asking those who paid for news their motivations, the research found that high-quality and exclusive content, identification with a brand and an aim to support quality journalism were key factors. Cheap promotional deals, however, often helped those possibly looking to subscribe "over the edge" to payment.

Additional features such as games and puzzles and lifestyle coverage of topics such as film, travel, fashion, or food were found to play a smaller role in attracting subscribers although they helped with retention.

Among those not currently paying for news, the research found that price incentives either through a lower monthly cost, a better value subscription or being able to share a subscription with family and friends was the single most important factor that would encourage these people to sign up - echoing a survey from earlier this year by Yougov.

A fifth of people who do not pay for the news in the UK said a low price or the ability to share the cost between family or friends would encourage them to sign up, while 29% in the US said the same.

More relevant content and less advertising were also cited as reasons to pay.

However more than half of non-subscribers across the 20 countries - including 65% in the UK - said that nothing would persuade them to pay for news.

Many US subscribers have two subscriptions

Upmarket titles such as the New York Times, the Washington Postand the Wall Street Journal account for the lion's share of US subscriptions but the research found that people also subscribed to news magazines, local newspapers and alternative and partisan media.

Over half (56%) of subscribers said they paid for two or more brands, often with one subscription to a national title and and another to a local or specialist publication.

People identifying as being on the political left were more likely to pay for news.

UK: Times and Telegraph dominate the market

Four in ten (41%) of all online news payments in the UK were to the Times and the Telegraph with most people choosing to pay for one title only.

The availability of high-quality free news from the BBC, ITV and Sky means that much of the national press in the UK is advertising supported and subscriptions are less common than in the US.

Germany: Price not politics

German newsbrands were seen as more neutral and able to attract left and right-leaning subscribers. Price was identified as an important factor in pushing people to sign up.

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Select and enter your email address Weekly insight into the big strategic issues affecting the future of the news industry. Essential reading for media leaders every Thursday. Your morning brew of news about the world of news from Press Gazette and elsewhere in the media. Sent at around 10am UK time. Our weekly does of strategic insight about the future of news media aimed at US readers. A fortnightly update from the front-line of news and advertising. Aimed at marketers and those involved in the advertising industry.
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