A recent meeting of Northwestern University’s Local News Initiative team and its three “learning lab” partners – the Chicago Tribune, Indianapolis Star and San Francisco Chronicle – found heightened interest in news organizations growing their digital subscriptions as a key strategy for financial sustainability.
A “click” culture in American newsrooms, in which online page views were the overriding measure of success because they boosted advertising revenue, appears to be giving way as online ad sales continue to underperform.
Ronnie Ramos, Executive Editor of the Indianapolis Star, said after the Local News Initiative meeting that he sees an emerging consensus around digital subscriptions.
“I felt a sense of agreement that an ultimate goal should focus more on digital, driving digital subscriptions, than chasing page views,” Ramos said, “and some insights on what helps people make a decision to become a digital subscriber.”
The increased attention to reader revenue poses a whole new set of challenges, said Tim Franklin, senior associate dean at Northwestern University’s Medill School of Journalism, Media, Integrated Marketing Communications and head of the Local News Initiative.
A shift from a shrinking advertising-supported revenue model online to a subscriber-supported business model represents a sea change for many local news organizationsTim Franklin, senior associate dean at Northwestern University’s Medill School of Journalism
“A shift from a shrinking advertising-supported revenue model online to a subscriber-supported business model represents a sea change for many local news organizations,” said Franklin, a former top editor at the Indianapolis Star, Orlando Sentinel and Baltimore Sun. “It moves local news organizations’ strategy away from strictly page views and toward building a deeper, longer lasting readership bond with their audiences. The question then becomes how does a local news organization do that?”
Medill’s Local News Initiative includes deep data-mining analysis by the school’s Spiegel Research Center of anonymized reader, subscriber, and customer service data from the three “learning labs.” It also includes human-centered design research of both readers and non-readers of local news in those markets, as well as an analysis of overall digital content behaviors. Next year, Medill’s Knight Lab will use the research to help create new digital tools and products aimed at improving the sustainability of local news organizations.
One major topic at last week’s meeting, which included executive team members from the three local markets and some of their corporate leaders, involved “the value proposition” for digital subscribers. Are local news organizations producing enough unique, relevant content to persuade readers to pay up. But another issue was about delivery, not content: Are news outlets distributing their current offerings effectively to keep digital subscribers and lure new ones? One intriguing question was whether news organizations could improve the experience for their subscribers by providing an ad-free version of their websites while continuing to offer non-subscribers a version that included ads.
The focus on creating more loyal, paying customers means local news organizations need to adopt strategies to build frequent connections with their audience. Already, this is leading some local news organizations around the country to aggressively push daily newsletters and news alerts to readers.
Subscriptions offer a way off the product hamster wheel. Recurring payments have changed the way that Americans consume software, music, movies, television, fitness, clothing, and food.Barrons: How Subscriptions Are Remaking Corporate America
The subscription strategy is an old one for newspapers, of course. But as new digital ad dollars are being soaked up by tech giants like Google and Facebook and shifting away from local news outlets, there’s an increasing reliance on reader revenue. This comes at a time when industries far removed from journalism are adopting subscription approaches. As a recent story in Barron’s put it, “Subscriptions offer a way off the product hamster wheel. Recurring payments have changed the way that Americans consume software, music, movies, television, fitness, clothing, and food.”
One of the showcases of last week’s Northwestern meeting was a major analysis by the Spiegel Center of the reader behavior data from the Tribune, Star and Chronicle, The data – 13 terabytes worth – was correlated with the news organizations’ digital subscriptions. While the three “learning labs” got an early look, overall findings will be released to the industry and researchers in the next few months. The “learning labs” also received proprietary data on their readers for their own use.
“The focus of our data mining research will help answer the question: What are the behaviors of readers who become digital subscribers and stay digital subscribers?” Franklin said. “That’s at the center of our work with our three local learning lab partners, and we’re looking forward to sharing our findings early next year.”
The Local News Initiative’s December 5-6 meeting was held at Norris Hall on Northwestern’s Evanston, Illinois, campus.