39 | What percentage of your audience should be paid subscribers?

Welcome to the Paywall Podcast, where we discuss paywalls and paywall strategies for news and magazine publishers. This episode of the Paywall podcast is brought to you by Leaky Paywall. Leaky Paywall is the most flexible WordPress subscription platform. Find out more@leakypaywall.com where you can download Leaky Paywall for free. And now for today's episode. Today we're going to talk about what percentage of your audience should be paid subscribers. In other words, if you are a local news publisher, you probably have a population base around you. If you're a magazine publisher or a niche news publisher, you probably have an idea of what your market potential is. And we're going to answer the question, what percentage of your audience should be paid subscribers? Well, welcome to episode 39 of the Paywall Podcast. I am here again with Tyler, and we are going to dive in deep with some numbers that we have. Welcome, Tyler.

Thank you. Thank you.

All right. And I know, Tyler, that you have been looking at numbers in the local news segments, so I'm looking forward to hearing your thoughts on that. Before we jump in, I wanted to share one very important. A couple of data points, but let's start with one. So I'm going to share my screen here, and we're going to look at what the New York Times has been up to. Now. A lot of publishers will say, well, I'm not the New York Times. I can't really compare with New York Times. But you know what? We started Leaky Paywall with basically cloning what the New York Times is doing back in the day with the meter paywall.

And.

And that has led to quite a lot of success for publishers. And if you look at today where they're standing and you look at this orange part of the graph, this is just a comparison of their digital subscriptions versus all their other revenue streams. And this is a really, really important metric. And I would encourage anybody who is looking at really fueling digital subscriptions to keep an eye on what the New York Times is doing. Just copy what they're doing if you can, which you can, and. And grow your digital side of your revenue. So this mustardy color is digital subscriptions. They started in 2011, and then last year they had their best year ever. And you can see the growth has actually accelerated in the last few years with digital subscriptions versus their print products, which, if you look back, you can look at advertising and digital print was a huge part of their revenue stream about 20 years ago, and today is actually a pretty small Part of their, their revenue stream and then print circulation. They've done a pretty good job of hanging on. But I think as all print publishers have seen is that that's what, that's what you're doing is you're hanging on. I mean, some have had success with growing print, especially in more of the higher end niches in the magazine side. But as far as local news media overall, most publishers have been struggling to keep, keep that going. But what we're going to talk about is this Digital Description, digital subscription revenues and what, what percentage that you should be at as a publisher. Okay, I'm going to reveal some numbers. You ready to jump in?

Let's do it. Let's do it.

Okay.

All right, cool.

So let's just move this out of the way. All right, so we did a little research here. We got some data from a number of publications that are spread out across the country. These are all news publishers. And going to look at audience sizes, which for the news publisher is really kind of the metro area. And then what they reported as print and digital subscriptions. And then we extrapolated that data into a percentage of paid, paid subscribers. Digital versus print and got some. There's some really interesting numbers here. If we're looking at, you know, bigger publishers like LA Times and Boston Globe. But we're also looking at Little Rock, Arkansas, we're looking at Baton Rouge, we're looking at San Juan, Puerto Rico. It's a real Seattle Times. We have a real mix of publishers. There's no real, very small local publishers in this. These are generally mid market and larger publishers. Publishers. But I know, Tyler, you'll weigh in on these numbers. The thing to look at first is what's at the bottom. In other words, what's the overall percentage? So based on population data, you're looking currently today a reported average about five and three quarters. Percentage of your population as a news publisher should be paid subscribers. A split of print and digital. And I think that's pretty interesting if you look, if you then break it down to digital versus print. Well, prints at 2.7 and digital as at 3.0, roughly. And so you have digital leading print now in general. What I think is pretty fascinating about this is digital subscriptions have not been around for very long. Right. In the relative scheme of subscriptions. Right. Like print subscriptions. I don't know how long have print subscriptions been around for?

Forever. Yeah. Well, and just because the New York Times started in, what was that, 2011. I don't think most, even most regional Outlets weren't implementing print paywalls at that same point in time it took. They're still doing it. I mean, it's still happening today. There's just now getting on board the digital train, so.

Right. Yeah, I think, I think you're right. I think a lot of publishers are, you know, just in the last few years and just certainly this year starting to get serious about digital subscriptions because it's such a revenue boom. And what the New York Times is doing is exactly what, if you're listening, you should be doing, really leaning into digital, really paying attention to the details because the upside is huge for deals.

Yeah. Everything that the New York Times is doing is transferable to any market in this country, whether it's a small town in West Virginia or a regional outlet in Tampa Bay, for example on this list. Any market can benefit from their strategy.

And what, what, And I'll say this and I might get some heat for it, but you know, I look at these numbers and I say, okay, well, about 3% is digital subscriptions and about 2.7% is print subscriptions. And that's with most publishers doing a pretty crappy job with their digital subscription experience. And, and I'm saying like, this is not, I don't think this is new because I hear from readers, I hear from publishers, you know, they're sick and tired of the, the, the, the paywall pop ups and the annoying, you know, experience that they're getting on websites. And everyone hates websites and I mean, go to Reddit and go to, go to Twitter, go down some rabbit holes and it's just everyone's complaining about how, what a terrible experience it is. Yeah. And it doesn't have to be and shouldn't be. In fact, you know, we can talk about another time how your paywall actually is the relationship starting point. But you know, even with all the terrible setups that are happening out there, digital subscriptions are still beating print subscriptions after just a few, really, just a few years of digital subscriptions being started up. So what does that tell you? Tells me lots of potential. So much just at the beginning of this. And sometimes I hear, yeah, everybody's got subscription burnout. Hey, we don't see it. I don't see it. Yeah, I see new, we see new publishers getting turned on every month and we see them building free registrations, we see them building paid subscriptions, and some of them are just literally printing money.

Yeah, well, I think a lot of people just want to be able to support their local newspapers. I think they Just want. They treat it like a tax. You know, I pay this every. Every month or every year. And this is my civic duty, is to have a subscription. So in a lot of ways, I don't know if everyone sees it as a typical subscription like they do to Netflix or Hulu or something like that.

I think it's a fair point. I think most people have room for one local. I mean, you have to have the. The income, of course, but we are talking about people that would possibly subscribe and they'll have a local and they'll have maybe a national some more. But that's a pretty typical. I.

Sometimes I'd hear pushback on. On. You know, most people, when they do have a news, it's a news subscription that they pay for. It's typically just one. Yeah, you know, that's. That's typically the average. But I think that is changing. I think that will continue to change. I think people see value in their local newspaper subscriptions as more and more local newspapers offer digital access. I think. I mean, at least from what I see, people continue to subscribe to local news all across the country, papers that I work with. So I think there's certainly room for multiple subscriptions. Whether it's multiple news subscriptions, something national, something local magazines, I think there's. There's certainly room for it. It's just a matter of being able to offer it in the way that the consumer wants. And as we're seeing that, that way is digital. Yep.

Yeah, it's, It's. There's. There's a lot less moving parts with a digital subscription.

It's.

I mean, there's a level of e commerce complexity, but it doesn't compare to print.

No way. And there's no. The overhead is so low. Yes. I think the one thing that publishers get excited about on the print side is. Or on the digital side is when they do start to amass subscribers, it's like, oh, each new subscriber is not costing me money, it's making me money.

Yeah, it's profit.

Yeah, yeah, yeah. And those numbers, you know, as they go up, they don't. They don't tend to cost you a lot more. So.

Yep, that is very true. We have seen switches from print to digital or continuing print, but, you know, pivoting to digital, we've seen transitions from the. The biggest one was, you know, 40,000 free weeklies that transition to free registrations and paid subscriptions successfully. So it's, it's. And if you're not in that position, you Have a huge advantage if you're in that position. You can do it. You can transition.

Yeah.

All right, so that was. So number one, the. I had four, four data points here. Number one is digital percentage is greater than print percentage. The second data point I have, we have here is that the smaller your population base, generally the higher percentage of paid subscriber penetration you're going to have.

Yep. Go ahead.

Well, let me just, let me just run through the data points here real quick. And I know you have your own perspective on, on the smaller hubs, but you know, if we look at. And there's some outliers here, but like, let's go to Little Rock.

Right.

Look at, let's look at the big numbers. Total paid subscribers, seven and a half percent in Little Rock. Killing it on digital. Various 0.4 print, 7.1 digital. Absolutely killing seven and a half percent. Little Rock is smaller than Boston. Right. Smaller than LA, smaller than Seattle. So another big number is Baton Rouge. Nine over nine percent paid subscribe, percentage of audience with paid subscribers. This one's a little more split. 5% print, 4% digital. I would say maybe they're working on their digital presence, but I'd say there's huge opportunity, huge upside for digital subscriptions with those numbers. And then, Tom, if we look on the lower end, you know, we have Philadelphia, probably a laggard. Let's say they got work to do, especially on the digital side. Are you talking 2.29% total paid subscribers, 1% print, 1.2% digital. Roughly. Bigger market. Less. Less penetration.

Yeah. I think just by looking at those numbers, the larger the population, they're prob. Still benefiting a bit from digital advertising just because of the sheer volume of traffic that they see.

Yeah.

And so they're maybe not as focused on digital subscriptions, but if they were, they can certainly. As they should be. They could, they could certainly bring in a ton from, from that.

Absolutely. Absolutely. And you know, like, so, like Boston Globe, like I know that the Boston Globe student. They're being very progressive. They're doing a good job promoting digital subscriptions. They're really lean. They have leaned in. It was years ago. I remember reading about the Boston Globe kind of following up, you know, from what the New York Times was doing. And then look at the results already. You know, they're. They're over 6%, 6.34% of paid subscribers. Majority. Almost 5% is digital. And then 1.4 is print.

And you.

So you have, you have. You know, it's like any other News area. They, you know, relied on print forever. But then when digital came around, they just leaned in and said, okay, this is, this is the future. And, and their numbers are. Are showing it, and they're doing a really good job for a larger metro area. I mean, their metro population is almost 5 million, and they're. They're creeping up towards 7%, you know, audience market penetration.

Yeah, yeah. Just looking at this list, it looks like they're one of the. The best or maybe the highest based.

On their population, you know, and then let's go to Little Rock. Right. So now we have Metro population of 800,000, so not quite a million. So this is the smallest metro area here, I think. Yeah, Little Rock, Arkansas, and seven and a half percent subscriber base.

Right.

Over 7% is digital, 0.4% is print. So they have, they have pivoted. They have clearly pivoted to. Absolutely, you know, lean in to digital subscriptions.

Yeah, yeah, yeah. That's not uncommon. When you see smaller publications start to focus on digital, people do. People do lean in. They do subscribe. It does work regardless of population size.

So, Tyler, I got to ask you then, so for the. You deal with. I mean, you deal with some like, you know, I know you deal with, like, the largest paper in West Virginia and, you know, a lot of small, smaller ones, too. I mean, do you. Do you see this, do you see any like that. That trend of you can get more of your population to subscribe with a smaller metro area?

No doubt, no doubt. So I looked at a couple of publications this morning, and we're Talking towns of 2,000 people, 2,500 people. Teeny, teeny tiny markets. And again, being Virginia, not all of these markets are well connected as far as Internet and just general services are concerned. I saw a number, almost 25% of the population was subscribed to the paper.

Wow, 25% through digital.

Through digital. Now, do I know if they're all from, like, living in that region? No, I'm not 100% certain that they're all in that community, but they all have an attachment to that community, whether they live there or not. That was the highest number I saw. But. But on average, they're higher. They're much higher. People are. Are tuned in to their local. Their local newspaper. A lot of people in local communities know their local editors, their local journalists. They, you know, these are people in their communities. So there's. There's a high percentage of. Of people that, that pay for digital access, print access, you know.

Yeah.

In These communities.

Yeah, I, I, I think you're right. I think the psychology of a small community is, I mean, I live in one, and you want to, you want to, like, you feel connected. You want to stay connected. I mean, that's kind of part of the motivation, I think, of living around a smaller community is that connection you get.

Yeah, yeah. And for these small. Go ahead.

Well, I was just gonna say, I mean, I lived in Boston for a long time in Cambridge and then moved up to New Hampshire, and it was great living in the Boston area. And, and Harvard Square was just a brilliant place to be young and, and live there. I actually never subscribed to a newspaper there. I hate to admit, but I was also early Internet adopter, so that was where my attention was. And digital subscriptions were really not a thing for in the early days, not a big thing. But then moving to a smaller area.

You.

Yeah. You want to connect.

Yeah. It's funny you talk about that like younger people and not being subscribers, but that, that trend, I think, changes as people start to buy houses and they start to have children and they're, they're involved in the, on a different level. You're paying taxes that start going towards things that you're using and. Right. And so your, your willingness to be a part and pay for news goes up as you, as you get a bit older, so. Yeah, true.

Yeah.

It's not the end of the world if millennials aren't or what's the generation before us now? Z, Z, it's okay if they're not paying for news right now. I wouldn't expect most people at that.

That would be my kids. Yeah, they're a little young for that.

Yeah, I don't think they're, they're there yet. Everyone's, I think, panicked about younger people not subscribing at a high enough rate, but they, they come around. I think. People come around.

Yeah, I don't buy that at all. I mean, you know, Netflix, I think, is proven. If you provide, if you provide content that people want. We live in a subscription economy. It's just, it's what it is. If you, if you're targeting millennials, great. I mean, that's, that's, that's, you know, target millennials in a, in a certain niche that of their interest, you know, and make, make great content, they'll pay. Yeah, it's, it's like any, any niche. If you have, there's value, you'll pay. You know, that's it. Just the value proposition.

I always hate when it gets into discussions around like, this generation won't do this and this generation won't do that. But it's like, no, it's just a matter of what you said. It's providing value and if they see value, then they'll pay for it. That's absolutely.

And you know, it's kind of boiled down into time versus money. I mean, really, that's like what I see all subscriptions and sort of in our world, it's like, well, if I can, you know, right click and get around the paywall or if I can get my news somewhere else and I don't want to and I'll do. I'll spend time getting around things, then I have more time than money. I mean, what it boils down to. And then as you, as you get older and earn more income and all of a sudden you don't have the time as much time anymore to, to, you know, worry about trying to get around systems and you probably. Your needs change a little bit too, and you just need convenience for things.

Yeah.

Then you pay as long as the value's there.

Yep, yep. And local news, if, if the local news publisher is sending out a weekly newsletter, that value is off the charts. As far as having everything that's going on in your community in your inbox, that's just as big of a benefit as being able to read it on the actual website. So it's. Yeah, we, we talk about that all the time. It's. The newsletter is literally, if you're not doing a newsletter on, and you've got a paywall, you're missing out on so much potential as far as lead capture and, and kind of nurturing that, that, that reader into eventually into a paid subscriber.

So, yes, the nurturing. Okay, so I'm gonna, I'm gonna go back to. So the. Just to reinforce point number three. What's your biggest opportunity here? If you are printing something and you have print and digital and your print numbers are higher than your digital numbers, then you have a gigantic opportunity to grow your digital subscriptions. Yeah, I mean, I think I pointed out a couple examples, but like Tampa Bay Times, we haven't talked about 2.8 million metro area print subscribers, 3.6 digital subscribers, just a shade over 1%. Yeah, they have it now.

They're.

They're at 4.7%. So they're just under the, the quote unquote national average here, this chart. So they're underperforming. But if you look at the print versus digital, their digital is severely Underperforming.

Yep.

They have a enormous, enormous potential for growth here. So if you're listening Tampa Bay, just drop me an email. There's, you know, Long island metro area, 5.7% market penetration, but 3.3 is print and 1.7 is digital. Again, underperforming on the digital side. Now, some, some publishers might be working actively on their digital campaigns, but if not, very much need to do that.

What else?

Anything else that's standing out? Oh, San Juan, 6% print and 1.76% digital. So they're overperforming as far as total paid subscribers. Yeah, their market's 1.2 million. So it's not a huge area. I mean, it's a good size area. It's not massive. So they're actually doing a pretty good job beating the average with, with subscriptions in general. But at 6% print and not quite 2% digital, their digital, Digital potential is very, very high.

Yeah. Yeah.

Okay. So that's, that's number three. So I would say that. And the last point here is if, if you're looking at, and let's just talk a little bit about, like, if you run a magazine or if you run maybe a niche news site, I would just take a look at your audience size, like what you, what you think, and estimate what you think your audience size is, and take that and shoot for 10% of paid subscriber revenues. You know, if you're, if you're in a niche, by definition, you should be number one in your niche because that's what niches are all about. Maybe number two, but focus on the niche. Be the number one player. I would shoot for 10% as far as digital subscriptions go. Figure out, figure out where you, where you are. And if you're in the, if you're in the local News side and 10% digital subscriptions, my population is, especially if you're in a smaller market is probably a low bar for a smaller market.

Yeah.

And if you need, if you, obviously, if you, if you're struggling with this, please get in touch because this is all we do every day is help publishers, you know, get the revenue they need to get going.

And I think local. One thing to just point, one point on, on local news publishers, I think they're always surprised at how much people are willing to pay for those local news subscriptions because the pushback that I tend to get, I don't get the pushback as much as I used to, but people say, well, we're not the New York Times, but I'M like, yeah, where else are they going to get local city council coverage in their community? You can't get that from national outlets, regional outlets. You have to get that typically from local news. And so I always argue make your price comparable with the New York Times, if not more. In some cases, it's a whole discussion on pricing. But, yeah, that's, that's how, that's how you're able to make a digital subscription model sustainable and, and feasible.

And, and now we have the numbers to prove it.

Yeah.

So, yeah, you're not the New York Times. You actually have an advantage over the New York Times.

That's right.

You have a monopoly in your local news area.

Yeah.

The New York Times does not have a monopoly on national news or international news. They're competing with a lot of big players internationally and nationally. But if you're, if you're focused on local news and you're really the number one in local news, then that's, you should be. Your, your, your percentages should be higher.

Yep. For sure. It's, it's the niche. Right? So. Yep. Yeah.

All right, cool. I think that's a good place to wrap up. Any questions, send them in, please. Infoine101.com z e z e dash e n101.com infoine101.com thanks, Tyler.

Thank you.

Catch you next time. All right, thanks for listening to the Paywall podcast. If you'd like to get in touch to discuss subscription Strategy, go to LeakyPaywall.com see you next time.