Study: News Consumers 'Conditioned' To Expect Special Offers

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 the Press-Gazette citing 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.

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.

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.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."

"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.