How much will people pay for local news? It’s a question that every local publisher has pondered. But with the number of publishers launching subscription and membership programs on the rise, the need for real information about how to set subscription prices has never been greater.
Where is the ceiling on local publishing subscription rates? How much will readers pay, and at what point will a high price tag turn them away?
The answer to these questions has to do with the perceived value of the subscription. The greater the perceived value of whatever the reader is paying for—whether it’s a subscription, a membership, or even just limited access to premium content—the higher the price tag the publisher can justify.
Increasing the perceived value of a local publication’s subscription program requires publishing more high quality, relevant articles, and launching add-on services like local business directories, podcasts, and email newsletters.
Perceived value is also tied to marketing. A local publication that successfully promotes itself through both traditional and non-traditional forms of marketing is going to have a higher perceived value than one that does not, even if the publication that promotes itself has a lower quality of journalism.
Publishers looking at how to set subscription prices should consider the perceived value their publications or websites are providing to readers. What are readers getting in exchange for their hard earned dollars? The higher the value, the higher the acceptable subscription rate.
“The Price of a Cup of Coffee”
If you’ve been around the local publishing industry for any length of time, you’ve seen subscription marketing materials that tout monthly rates that are lower than the price of a cup of coffee. The Guardian is one of many publications charging $5 per month for subscriptions, roughly the same price as a grande-sized latte at Starbucks.
When local publishers set subscription prices at $5 per month, they position themselves alongside cups of coffee. When rates go up to $10 per month, they position their subscription programs alongside Spotify and Netflix. The value proposition there is much harder to justify for small publishers, which is why $5 per month seems to be the sweet spot for many in the industry.
One way that local publishers do justify higher price points with their subscription and membership programs is by offering paying readers ad-free experiences and valuable extras, like exclusive stories and podcasts, invitations to meet up events with reporters, and early access to new website features.
Considering Reader Demographics
Reader demographics play in a role in the subscription prices that publishers can charge, as well. Publishers who are getting ready to set subscription prices have to look at who their readers are and how much they can afford.
Niche publications will often find that their readers will pay more than the readers of community-focused news sites. For example, Stratechery, a site that provides free weekly content and additional analysis to paying subscribers, charges $10 a month. That price would be on the high side for a website covering local news, but Stratechery focuses specifically on the technology and media business, with readers who tend to have high incomes.
Publishers that sell exclusive content, like research papers, can charge even more for access. This is especially true if they market their subscriptions to businesses rather than individuals. For example, Business Insider’s research division was charging $2,495 for all-access memberships back in 2016. Politico Pro offers up another example. The policy intelligence website, launched by the team at Politico, has been known to charge corporations between $5,000 and $10,000 for premium access.
Scale becomes a lot less important when you’re selling subscriptions for thousands of dollars a pop. But, of course, the vast majority of local publishers can’t expect to set subscription prices so high. According to an analysis conducted by Pew Research Center, the median price of a digital subscription to U.S. newspapers is $10 per month. Online-only outlets tend to charge less, while the largest newspapers in the country charge considerably more.
The median subscription rate for digital news is considerably lower than for print news. However, that rate is still 83% higher than it was in 2012, when the Reynolds Journalism Institute published its own report on the optimal price for online news subscriptions.
Market size didn’t play a role in Pew’s findings, however discounted trial subscriptions did result in higher conversion rates than free trial subscriptions, which is something for publishers to keep in mind as they design their marketing and conversion programs.
Given all of this information, it’s clear that local publishers looking to set subscription prices should keep these factors in mind:
1) Who is reading the publication?
2) How much can those readers afford?
3) What value are readers getting in exchange for their subscriptions?