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05 October 2021
The new economics of upstart US media
Subscription modelsMedia & publishing (general)United States
Burned by the high-volume, low-returns business of selling ads upstart websites caught a wave of pivots to a subscription model – but now the question turns to whether there’s long-term sustainability in subscription-native businesses.
Why it matters
The effectiveness of a strategy takes time to judge. For companies like Defector, The Daily Memphian, The Dispatch and individuals on Substack, the renewal period is a moment of truth. So what brings people back for another year? The smart money says high engagement.
Habit matters to subscription businesses, and some of the most successful, like the Financial Times, measuring three key factors: recency, frequency, and volume.
It’s usually a case of remaining a typical go-to and are not replaced by another drain on the audience-members reading or entertainment time that you can hang on
With sites like Defector – whose first birthday party was covered by the New York Times – coming up to a year since launching its paid sports-and-everything-else blog, staffed by Defectors from Deadspin, retention is now a key question.
The site has disclosed that around 85% of annual subscribers have renewed. While “good blogs were our best marketing tool” for attracting subscribers, the questions posed by retention are quite different.
The Daily Memphian, meanwhile, also relies on its readers to pay directly for its local coverage. Its retention strategy has seen it place greater emphasis on straight coverage of local issues – effectively, the stuff people really wanted to know about.
Listening to readers and giving them what they want is, ultimately, the name of the game.
Sourced from WARC, the New York Times, Defector. Image: Defector