Readers pay for digital news when you sell the value


NEW YORK — The big mystery in the newspaper industry has been how to get digital readers to pay for a product they have been getting free for years.

Denise Warren

The industry has struggled because subscription operations were always loss leaders that didn’t pay for themselves. Executives had no idea how to run a profitable subscription operation and have been learning how to do it for the first time, said Denise Warren, who played a major role in the New York Times‘s transition to paid digital subscriptions.

She spoke May 3 to an audience of professors and industry representatives at the World Media Economics and Management Conference held at Fordham University.

Many publishers make the mistake of marketing their digital products on the basis of price and discounts, Warren said, when they should be promoting the unique value proposition of news and information that readers cannot get anywhere else.

After leaving the Times, Warren went to Tribune Publishing, where she had responsibility for developing a monetization strategy for the digital editions of six newspapers in the East. The digital editions were way underpriced, she said, so part of the strategy to boost revenue was to emphasize the publications’ public service reporting.

Capturing the 1.5 percent

During the question and answer session, an audience member asked Warren if she thought the Times‘s digital subscription strategy was a failure, since less than 1 million of of its 60 million unique monthly users are actually paying for digital.

Not at all, she replied. The vast majority of those monthly users are “one and done”, meaning they come only once a month through a search engine or social media recommendation and may not even know they are reading a Times story.

Publishers should focus on that small group of engaged readers, she said, rather than counting up total page views and unique users per month. That1.5% of the audience delivers the most value to advertisers. While many advertisers want reach and pay based on eyeballs — cost per thousand page views — others want their ads to be seen in the context of a trusted, credible product, Warren said.

Related: Loyal users will pay for watchdog journalism.

Robert G. Picard, emeritus professor of Oxford University and chairman of the conference, asked Warren how publishers could convert the casual once-a-month visitors into those engaged readers she was talking about. They should focus on giving their readers a better experience, she replied, by using data to deliver them more content that they are interested in. Also, they should make use of the built-in marketing or their own platform to promote themselves.

Warren was asked if she thought publishers were making a mistake by putting their faith in distributed content, in which they give their stories directly to social media platforms and readers don’t come back to the publisher websites to read it.

“You need to experiment and try everything,” Warren said. “We’re in the first innings of distributed content,” so it is too early to know where this trend will lead.

When asked about the future of print products, given the huge declines in print advertising and lost subscribers, Warren said she believes that print still has a good future, in part because “it still delivers the lion’s share of the profits.”

Some publishers are moving toward a Sunday-only publication schedule and reducing or eliminating the daily print edition. (Several Advance Publications newspapers have reduced their daily print schedules.) These strategies have not gone well, she said.

Warren is now on the board of Electronic Arts, the video game company, and says the newspaper industry could learn a lot from them because they focus on creating a great user experience.

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