Harnessing the Power of the Subscription Economy: Lessons from Digital Media's Leading Innovators

#CDSGlobalSummit
@CDSGlobal
Harnessing the Power of the
Subscription Economy
Tony Silber
VP/Content, Folio:/min, @tonysilber
Beth Roy
CCO, CDS Global, @BethAnnRoy
#CDSGlobalSummit
@CDSGlobal

Pivot to Success
1
• The digital revolution, the
increase of free content
available and the proliferation
of mobile/tablet devices.
• These forces of economic
disruption have required
the print-magazine industry
to adapt, on the fly, amid
predictions of imminent decline.

Pivot to Success
2
• Suddenly, the world is zeroing in on subscriptions, a
model that media companies have used forever.

Pivot to Success
3
In “Building a Strategy for the Subscription Economy,” Gartner
analyst Chris Fletcher defined it as a market reaction to a
growing range of technology products that can be delivered
digitally to devices ranging from tablets to smartphones and
mobile devices.”

Pivot to Success
4
And a model that never had much relevance outside the print-
media industry is finding favor as a smarter way to sell a whole
range of products, including movies, music, books, software and
even clothing and food.

Pivot to Success
5
By 2015, Gartner predicts, more than a third of Global 2000
companies selling non-media digital products will be generating
incremental revenue through subscription-based services and
revenue models, on the order of 5 to 10 percent.

Pivot to Success
6
• For publishers, a retooling opportunity is at hand.
• Today, a subscription must be about more than dutifully
delivering an issue.
• And because publishers (and all businesses) often struggle with
how to think differently, we’ve compiled four case studies that
represent the state of the art in magazine-company creativity
in the subscription economy.

CDS Global Positioned to Pivot
7
CDS Global’s eHub solution named an Emerging and Niche Player
in the December, 2012 Forrester Research Inc., report: “Market
Overview: Subscription And Recurring Billing Solutions 2012” by
Peter Sheldon, Senior Analyst

Success Story 1 - Meredith
Meredith Converts a Thousand Points of Data Into a
Subscription Powerhouse
9
“Instead of presenting product offers based on historic
models and views of customers, we’re now integrating
active behaviors and actions that are being taken in real
time on our sites.”
—Janet Donnelly, Meredith

10
• Real-time data allows them to be more dynamic and
responsive, giving them the added flexibility in bundling
and pricing.
• The company is paying close attention to what channels
subscribers use to engage with online products and tailoring
content to the channel.
• Data, more of it and better crunched, lies at the heart of the
Meredith effort.

11
Traditional model of customer retention: Flood a
subscriber with one-size-fits-all offers to renew.
New model:
“If we know that someone signed up for a food
newsletter, we know they have a food affinity, and
if they’re on our website through a mobile
browser, we know they have a digital propensity.
So we think maybe we should present an Every
Day With Rachel Ray digital edition.”

12
• Meredith analysts comb through
real-time information generated
from watching how the audience
engages with the brand digitally.
• Information gleaned from 800
distinct data points–up from 400
five years ago–is dissected to help
stitch together highly targeted
and personalized offers.
12

13
• The result can mean building out
a title to reflect what subscribers
value. Allrecipes.com, long a
digital-only title, now has a print
version.
• Launched last year with a 500,000
ratebase, it is expected to hit 1.1
million with the February 2015
issue.
13

Success Story 2 - ESPN
ESPN Leverages “TV Everywhere” Model With Mobile
Subscription Offering
14
“The subscription model is building more and more steam in the
television/media industry, from both a financial and critical point of
view.”
“Look at the lightning success of streaming services from Netflix,
Hulu Plus, and others to see that companies are eyeing this model,
which is impervious to the cycles of the advertising market.”
—Robbie Caploe, Editorial Director of Cynopsis Media

• Introduced WatchESPN in 2011.
• Targets the growing ranks of those who want to access
programming via mobile devices.
• Available to credentialed subscribers to cable systems that
carry ESPN.
• Key is real-time authentication
• Delivers streaming on-demand video of live
programming and events that air on more than
a dozen channels on the ESPN broadcast platform.
15

16
The app model could help stem the flow of subscribers
from the network and pay-TV providers. According to
Nielsen, between September 2011 and September 2013,
ESPN shed some 1.5 million subscribers who either
cancelled pay-TV or switched to packages that didn’t
carry the network. That’s noteworthy, but still only a
fraction of the 98-million homes that have access to
ESPN.

17
• The WatchESPN initiative could be
interpreted as a desire to on the part
of ESPN to position itself for a future
that will have a very different content
distribution model.
• For now, though, the network insists
it’s about broadening viewer access
to ESPN content through existing
distribution channels.

Success Story 3 - Hearst
Successfully Increasing a Subscription Price
18
“We think this will provide a good example of how you take a
highly engaged audience and serve them on a dimension that
goes beyond just the magazine, and in a way that’s economically
beneficial.”
—John Loughlin, Hearst EVP

19
• O, the Oprah Magazine, has a fiercely
loyal community of 2.4 million.
• So how do you leverage that community
beyond a standard subscription, and
deliver enhanced value too?
• Hearst’s solution: “O’s Circle of Friends,”
a three-tiered service offering a much
more complete experience with the
brand.

20
Hearst sees the program attracting 100,000 people over the course of
three years. As of early August, some 1,000 had signed up within the
first 10 days, and most were at the premier level.

21
• Tier 1: Basic tier add-ons span full digital edition access, a gift
subscription, advance notice of O special events, an e-newsletter
and easy sweepstakes entry.
• Tier 2: adds in a second gift subscription and a keepsake box of
luxury beauty items.
• Tier 3: The $199 level adds in a personalized birthday card from
Oprah, a surprise gift from the O List, and “test-and-keep”
opportunities.

Success Story 4 – August Home Publishing
One Company’s Strategy to Boost Subscriptions: Raise the Price
22
“We had projected about 32 percent of a group in our early
renewal file would go for this, and we got about 64 percent. The
response was far better than we ever expected.”
–Don Peschke, CEO

23
• Less-than-projected direct mail performance
combined with the need to increase revenue-
per-subscription in January led August Home
Publishing to place a counterintuitive bet: that a
price increase would fix the problem.
• The company decided the two titles’
subscription revenue stream couldn’t be shored
up by lowering the price and waiting for the
numbers to improve.

24
• The lure for getting Cuisine and Garden Gate
subscribers to pay $29—up from $24 and the
only choice?
• A special edition available only to
renewing subscribers.
• A bi-monthly magazine with heavier paper
stock
• Perfect-binding instead of saddle stitching
• 16-page insert with special editorial content

25
• The results? Two-year renewals surged well beyond normal,
accounting for 80 percent of the new subscriptions sold in the
first round of renewal offers.

26
Takeaways and Action Items For the

Takeaways and Action Items for the
1. Think more like a brand.
Publishers should build out an array of assets that can be offered as
part of a total brand experience.
Merchandise offers, tickets to events, value-added content packages
and other perks can be added to subscriptions to enhance their value
to the subscriber.
2. Gather more and better data.
Data is becoming the backbone of better efforts to slice and dice
subscribers and understand their behaviors.
The tools to understand exactly how individual subscribers are
consuming content and engaging with the brand are now available.
And it’s essential to crafting targeted renewal and subscription
enhancement offers.
27

Takeaways and Action Items for the
3. Single View of Customer
Allowing consumers an easy-to-access single view of all of their
purchases is critical.
4. Be more proactive.
By increasing the frequency and quality of communications with
subscribers, publishers can position themselves to keep customers in
the fold and broadening their engagement with the brand.
5. Transition from paper billing to plastic with recurring billing.
This is critical for your success.
28

#CDSGlobalSummit
@CDSGlobal
?QUESTIONS

#CDSGlobalSummit
@CDSGlobal
THANK
YOU

Harnessing the Power of the Subscription Economy: Lessons from Digital Media's Leading Innovators

Recomendados

Recomendados

Más contenido relacionado

La actualidad más candente

La actualidad más candente (20)

Destacado

Destacado (20)

Similar a Harnessing the Power of the Subscription Economy: Lessons from Digital Media's Leading Innovators

Similar a Harnessing the Power of the Subscription Economy: Lessons from Digital Media's Leading Innovators (20)

Más de CDS Global, Inc.

Más de CDS Global, Inc. (13)

Harnessing the Power of the Subscription Economy: Lessons from Digital Media's Leading Innovators