How Axel Springer is adapting its pricing strategy to grow reader revenue
Axel Springer, publisher of popular tabloid Bild and newspaper Welt, is bullish about the prospect of growing its reader revenue this year by adding new subscribers and increasing the lifetime customer value of existing ones.
The German media company has 568,000 digital subscribers across two titles, Bild Plus and Welt Plus. Over the next year, it will grow subscriptions by increasing content output, such as video which it’s found to be a clear subscription driver on Bild; developing products that lead to more dynamic paywalls; and adapting the pricing of its products. It’s already seeing signs of success with the latter, said Stefan Betzold, managing director at Axel Springer.
On Welt Plus, which has 110,000 digital subscribers, it now offers two rather than three pricing bundles since it dropped its one-day access pass early last year. According to Betzold, the day pass was preventing the publisher from growing subscribers. Instead, it’s increased the price point of its highest tier bundle to €19.99 ($21.66) a month for a year with the first 30 days free. As a result, Welt’s subscribers grew by a record 26% in 2019. Typically, annual growth hovers around 10%, said Betzold.
“I don’t see three prices on Netflix,” said Betzold. “Our lesson from the last six years is to make it simple without too many variations. On Bild, we had six prices six years ago.”
Price used to be a binary way of denoting value. Now publishers are exploring how else to communicate the value of a subscription whether it’s through longer-term savings, browsing under without being tracked as German publisher Spiegel now offers, access to membership perks like events or ways for people to customize their subscription, said Shiv Pabari director at strategy consultancy Simon-Kucher & Partners.
“It’s more nuanced than the number of packages you offer,” Pabari said. “It’s how you design, communicate and upsell them.” Eye-tracking research carried out by the consultancy found people only look at the first three or four elements to a subscription package. “If the key value isn’t communicated first it’s not going to drive many subscribers,” he added.
Last year on Bild, Axel Springer dropped a low-cost first-month free trial of 99 cents, increased the monthly price from €4.99 ($5.41) to €7.99 ($8.66) while offering a 50% yearly discount for the first 12 months. The idea is that building a more regular habit will retain more readers. As a result, a higher number of people stay subscribed for the second and third month and also the 13th and 14th month.
Equally, publishers can be more flexible in the offers they show to audiences depending on how they segment them, as Welt has found. As a precursor to a dynamic paywall that offers up different content, messages and pricing to different audience cohorts, Axel Springer experiments by serving relevant content to specific segments on the homepage. According to Tobias Henning, general manager premium, steering the right audience groups to a subscription via its topic sections on …read more