The pandemic and other major news events have helped boost digital subscriptions dramatically at local news outlets in 2020, with a new industry analysis putting the overall increase at about 50% in a year’s time.
But that encouraging news comes with questions for 2021:
Can local news organizations keep those new subscribers and attract more if the news cycle quiets?
Can legacy outlets establish brand affinity in an often chaotic and crowded web world?
Can newsrooms cope with staff cuts and redefine their mission to match their ability to accomplish it?
One question answered in 2020 was whether local news outlets could make the shift online from an advertising model to a reader-revenue model. It appears they are doing just that.
Mather Economics, an Atlanta-based consulting firm that handles subscription data for major North American news chains, conducted an analysis of news outlets in 138 media markets of various sizes. It found that digital circulation was up 51.2% from November 2019 to November 2020 while print circulation was down 12.9%. Mather also found that 25.6% of all subscription starts in 2020 were digital. This year’s increase in digital subscriptions is greater than in previous years, Mather said.
Recent disclosures by major news chains support that trend.
The largest U.S. local news chain, Gannett, reported paid digital-only subscribers of 1.029 million in the third quarter of 2020, a 31.1% increase year-over-year.
Tribune Publishing said digital subscribers reached 427,000 at the end of the third quarter, compared to 314,000 a year earlier – a jump of 36%. Colin McMahon, Editor-in-Chief at the Chicago Tribune and Chief Content Officer at Tribune Publishing, said in an interview: “Chicago, Baltimore, the Floridas all did very well during this period. New York [Daily News] obviously came from a much smaller base because it didn’t have a big digital subscription base, so it’s been growing crazily, but from a smaller base. Then the other ones are just steady growth.”
The Los Angeles Times said paid digital-only subscriptions rose from 168,061 in January 2020 to 256,938 in December 2020 – a surge of 52.8% in 11 months. Like other outlets, the Times’ numbers were pumped up by news about COVID-19, the election and social justice protests. But Los Angeles also had other big stories: major wildfires, the death of Kobe Bryant and pro sports championships in both basketball and baseball.
As the local news industry has increasingly turned to digital subscriptions, some analysts such as Local Media Association CEO Nancy Lane advocate what she calls a “digital subscriptions plus” approach, with philanthropy-financed journalism also playing an important role. But no one seems to doubt that subscriptions and memberships are the most promising path for many local newsrooms.
One key question is whether 2020 has been a trend-setting year or an aberration.
Success with this strategy long-term means news outlets need to evolve, and that’s now happening at many places.Tim Franklin, head of Northwestern University’s Medill Local News Initiative
“This year has been an epic train wreck in so many ways,” said Tim Franklin, head of Northwestern University’s Medill Local News Initiative. “But it’s highlighted the essential role of local news and information in our communities. And the demand for local news this year came at the same time that many news organizations were aggressively pivoting to a reader revenue business model. The result has been a spike in digital subscriptions, especially at some larger regional outlets.”
But that requires major operational changes, said Franklin, who is Senior Associate Dean and John M. Mutz Chair in Local News at Northwestern’s Medill School of Journalism, Media, Integrated Marketing Communications.
“Success with this strategy long-term means news outlets need to evolve, and that’s now happening at many places,” he said. “They need to do things like revisit their organizational structures, and consider shifting resources to marketing, social media engagement and newsletters – the things that research shows drive subscriptions. And they need clear, actionable insights into the interests and habits of their paying readers so they can retain the ones they’ve added this year.”
Focus on Retention
The jump in digital subscribers has created a good problem: How to keep them?
In one positive sign, Mather Economics found that the retention rate for print and digital subscribers is up this year. The rate was 63.2% for 2019, and the annualized rate for 2020 so far is 70.9%.
“We see a lot of companies dedicating full-time positions to subscriber retention,” the Local Media Association’s Lane said. “It’s so much easier to hold onto a subscriber than to get a new one. That is a trend we’re seeing. We’re seeing subscriber-only newsletters, perks for subscribers, access to special-invitation virtual events, things that make that subscriber feel good when it comes to renewing.”
The Boston Globe, which was the first local legacy news outlet to have more digital subscribers than print subscribers, works hard to keep the paying customers engaged, said Jason Tuohey, the Globe’s Managing Editor for Digital.
That includes about 30 newsletters, plus events, some of them subscriber-only. Tuohey cited a recent online event in which the Globe’s television critic discussed “The Crown.” It drew about 1,000 subscribers.
Maintaining high-quality journalism is paramount, Tuohey said, but the appeal to subscribers must go beyond product delivery. The Globe wants to signal to subscribers that “it’s not some sort of transactional thing like buying something from Amazon.”
We do want you to feel like you’re not just getting the daily news but you’re buying into something bigger.Jason Tuohey, Managing Editor for Digital, Boston Globe
“When you buy a subscription to the Globe, we want you to engage with it in a number of ways,” he said. “We do want you to feel like you’re not just getting the daily news but you’re buying into something bigger.”
Mariana Rodriguez, Vice President of Consumer Marketing at the Los Angeles Times, said new subscribers get a “welcome series” of communications highlighting “different ways they can engage with us so that we’re sure to reach them in their preferred means, and that can mean through our apps; through our email, which is a very efficient channel for us; through social.”
At Tribune Publishing, subscriber retention is so important that CEO Terry Jimenez recently put it in an executive’s job title. Idalmy Carrera-Colucci is now Vice President, Audience Engagement and Retention.
“Some of the things that we’re doing include getting better about the onboarding process,” the Tribune’s McMahon said, “so when a new subscriber comes in, making sure that the new subscriber knows about all the benefits of being a subscriber, knows about newsletters and different ways to engage with the content, different platforms etc. And then tracking that new user’s experience and seeing how often that person is engaging and trying to make that if that person’s not engaging, why not. Sending an email, saying hey, have you seen this, have you seen that.”
Tribune Publishing’s data analysis has found that new digital subscribers were slightly more interested in local news than previous subscribers were or anonymous website visitors were. It also found “a little less interest in some of our topics that historically have driven a lot of subscriptions – sports, Bears, food, dining, that kind of thing,” McMahon said.
Josh Brandau, Chief Revenue Officer at the Los Angeles Times and San Diego Union Tribune, said his organization also had noticed that subscribers coming aboard recently were somewhat different from previous paying customers.
He said people who subscribed as the pandemic emerged “may be a little more fickle and price-sensitive than the average subscriber that we get. So communications with them about the value of other aspects that we bring to the table is more important than with a subscriber that would come to us just [for] … local coverage and news from a civic perspective.”
The ability for us to create new products digitally that serve different audiences, broader audiences is really exciting to me.Josh Brandau, Chief Revenue Officer, Los Angeles Times and San Diego Union Tribune
This is a welcome challenge, Brandau said. “The ability for us to create new products digitally that serve different audiences, broader audiences is really exciting to me.”
Rodriguez said the Los Angeles Times works hard to win back lapsed subscribers, using a “scoring system” to assess whether they might be ready to rejoin. If they seem close, “we serve them an offer immediately. Some other people may have left us for a number of reasons that aren’t just price-specific, so [we] start to rebuild that relationship with them, serving them content, potentially asking them to sign up for another newsletter if they’re not signed up or they’re only signed up for one. With the data points that we know of them, serving them content that is most relevant to them to win them back in that way and then slowly bring them back into our family.”
While the industry is focused on digital subscriptions, Brandau said, “I’m seeing a lot of people buying print newspaper subscriptions. A lot more than we expected this year. Which is great news. When I was in middle school I was reading about the decline of the print newspaper. And I think there’s a good chance that in 10 years we’ll still be reading about the decline of the print newspaper. It’s not going away. People are still finding value in that product.”
Large vs. Small
Some analysts believe larger local news outlets have a better chance than smaller ones of reaching a level of digital subscriptions that will support what they want to do journalistically.
“I think the central question of how do you get to a [digital subscription] number that supports a newsroom is harder for smaller organizations,” said the Tribune’s McMahon. “There’s no question about that. We’re seeing that. On the other hand, the smaller organizations may have more runway on print than larger ones.”
The Local Media Association’s Lane said small media companies face major challenges with digital.
“It’s much harder for a smaller publisher,” she said. “They have lots of things working against them, starting with technology. In order to do it right, you have to have a sophisticated technology stack. You have to have human-capital resources and marketing and user experience and data. Those positions don’t always exist at smaller companies, and technology is usually legacy technology, not meant for digital subscriptions, And so it makes the road harder for them.”
It’s much harder for a smaller publisher. They have lots of things working against them, starting with technology.Nancy Lane, CEO, Local Media Association
On the other hand, she said, “there are some smaller publishers that are doing quite well.” Lane cited the Southeast Missourian in Cape Girardeau, Missouri. “For a very small paper, they’re doing pretty well.”
She also pointed to the Post and Courier in Charleston, South Carolina, as a “shining-star example.” The privately owned Post and Courier isn’t all that small, but Lane said it’s an overachiever. “They have over 100 in their newsroom, which is unheard-of for an operation that size, and they have the funding to invest because of a really great ownership structure.”
Boston’s Tuohey also points to ownership structure: “We are lucky at the Globe with private ownership, the Henrys … That has been great. They are willing to invest in things.”
The Globe now has about 220,000 digital-only subscribers, “a sizable jump over where we were a year ago,” said Tuohey.
Among the Globe’s investments: “We opened up a bureau in Rhode Island because we sensed that there was a paucity of news coverage with just cutbacks and other publications down there.”
When the Rhode Island effort opened in 2019, its Rhode Map newsletter became a “must read,” Tuohey said.
“We saw a significant jump in subscriptions from people from Rhode Island,” he said. “Before that we had a pretty small quotient of our readers from Rhode Island. [The increase] makes sense. We’re all of a sudden covering the region where they live a little more closely.”
The Slow Sell
Executives at the Los Angeles Times said they have come to the realization that winning new digital subscribers is a process, not something that happens instantly.
“Through our reader research … we learned that sometimes it will take a very long time before someone makes a decision to subscribe,” said Hillary Manning, the Times’ Vice President for Communications.
Rodriguez, VP of Consumer Marketing, said the Times has surveyed subscribers about how they arrived at the decision to take out their credit card and join up, and it hopes to develop more sophisticated methods of tracking that journey. .
“That’s one way to keep track of new subscribers: Oh, this person was a newsletter subscriber for a certain [number of] years and months and then they eventually converted,” she said. “We nurtured them all the way, showcasing our value proposition to them in a way that made them say, ‘Yes, it’s worth it.’”
I think nurturing that relationship does take longer right now.Mariana Rodriguez, Vice President of Consumer Marketing, Los Angeles Times
Building brand affinity in a digital environment is more challenging than in print because there are so many more ways to get news online, Rodriguez said.
“You have more options nowadays,” she said. “You really need to communicate and build that trust and that relationship in saying, OK, of these four options or even two options or six options that you have, why am I going to decide to subscribe to the L.A. Times instead of somebody else. I think nurturing that relationship does take longer right now because you are able to go to more different sources to cobble together the information that you are looking for and the news that you need. And so you decide, I’ve come back to this source a number of times, I see their value and I’m willing to commit.”
The financial pressure on local news outlets sometimes has meant that they had too much mission and not enough staff to accomplish it. But the Tribune’s McMahon said the ability to serve an audience and gain subscribers isn’t always determined by staffing levels. Rather, he said, it should be determined by whether newsrooms pick the right stories to tell.
“I think that we get into a trick bag always talking about head count,” McMahon said. “If we look back at the last 10, 15 years and talk about head count, you could at any point in this process say, ‘Well, there’s no way we can keep going at that number of people in the newsroom.’ … If you focus on serving your audience and serving your subscribers, then it’s really about: What is it that they want? What is it that’s meaningful to them? What is it that will get them to visit your site, return to your site, sign up for newsletters, eventually pay, and then stay? That is the central question. You’re better at delivering those things if you have more people, but it isn’t dependent on more people and just because you have more people doesn’t mean you’re going to be able to do that.”
What is it that will get them to visit your site, return to your site, sign up for newsletters, eventually pay, and then stay? That is the central question.Colin McMahon, Chief Content Officer, Tribune Publishing
One distinct advantage of digital subscriptions is that a news outlet can systematically and precisely track user behavior – which stories, video and other content the subscriber consumed. The news outlet can then correlate that behavior with whether the customer keeps or drops a subscription. Northwestern’s Medill Subscriber Engagement Index, which is on track to launch early next year, will make that process easier than ever before.
McMahon is a strong believer in listening to what subscribers value.
“I think there is definitely a number of subscribers that you can get to to sustain an operation that is meaningful to those subscribers and meaningful to the community,” he said. “It’s not going to be the Tribune of 20 years ago. It’s going to be a different Tribune, and it’s probably not going to be doing the same things as it was doing. It will be doing more of some things and less of a lot of things.”
Still, he said, the audience and the journalists will be in sync.
“The subscribers care about and support the work that the newsroom cares about and wants to do. It doesn’t line up perfectly and it never will, [but] I don’t think there’s a wide gulf.”