The dual-revenue model of print advertising and home delivery subscriptions that historically sustained newspapers is fading. In its place, newspapers are pursuing new revenue growth through digital subscriptions.
Weekday circulation for U.S. daily newspapers in 2016 declined for the 28th consecutive year, according to a 2017 Pew Research Center analysis. That analysis found weekday and Sunday print circulation numbers fell to their “lowest levels since 1945.”
Advertising has also taken a revenue hit, as unlimited web space has driven down the cost of online ads that previously were worth much more in print. Additionally, Facebook and Google take in the majority of online advertising revenue. In the U.S. market, no other digital advertising platform had a market share above 5%, Reuters reported in July. And according to Pew, the newspaper industry saw “a double-digit decline in advertising revenue” in 2016, and its $18 billion in revenue is just more than a third of the estimated $49 billion it was worth a decade ago.
Given these declines, the primary way to sustainably increase revenue for these formerly print-only news organizations is to entice subscribers to pay for a digital subscription — but at what price does that occur?
[pulldata align=”center” stat=”$10″ context=”per month is the median price of digital subscriptions at US newspapers”]As a research fellow for the American Press Institute, I examined prices of digital content subscriptions at 100 newspapers across the United States to understand how much they charge for subscription access to their digital content, and whether variables including market size, circulation and ownership are related to price. This digital content access includes but is not limited to websites, mobile applications, and print newspaper replicas, or e-editions. The sample comprises newspapers from 41 states and Washington, D.C.
The weekly price of digital access for the 100 sites ranged from $0.46 to $7.85. The median digital subscription price was $2.31 per week.
| Standard weekly prices | Percent of newpapers |
|---|---|
| $0-$0.99 | 11% |
| $1-$1.99 | 27% |
| $2-$2.99 | 30% |
| $3-$3.99 | 20% |
| $4-$4.99 | 10% |
| $5-$5.99 | 0% |
| $6-$6.99 | 1% |
| $7-$7.99 | 1% |
Tracy M. Cook/American Press Institute
This study provides a snapshot of baseline pricing structures for digital news subscriptions at 100 U.S. legacy regional news organizations. After we gathered this data, we surveyed circulation directors and audience development editors at the news organizations to find out how they determine their pricing models for digital content.
Among the key findings are:
- The median weekly price of $2.31 found in this study is equivalent to $10 per month and $120 per year for a digital news subscription.
- The results of this study update previous studies that estimated lower optimal prices for digital news. The median weekly price of $2.31 from this study was 83% higher (cost $1.05 more per week) than what a 2012 report published by the Reynolds Journalism Institute estimated as an optimal price. It is also 221% higher (cost $1.59 more per week) than what survey respondents were willing to pay on average, as noted in that same report. This is an indicator of the shift toward digital products, including that news organizations are placing a higher value on revenue from digital subscriptions.
- Market size and circulation did not correlate with subscription price in any statistically significant, generalizable way. Ownership, however, did show a correlation with price for some media companies, as prices were standardized across some companies’ media properties.
- In the survey, circulation executives said market testing and ownership mandates were the most important considerations when setting price, followed by industry norms, then competitor prices.
- Discounted trial subscriptions result in higher conversion rates than do free trial subscriptions, if for no other reason than discounted trials require some sort of payment information entry. Our results showed in a side-by-side comparison that at the news organizations surveyed, free trials resulted in a conversion rate of less than 25%, while discounted trials resulted in conversion rates of at least 26% (though the majority was at least 76%).
These results are useful both to news producers and news consumers as benchmarks for comparative analysis and future decision making. Producers can use this information to see where they fall among similar organizations and as a jumpstart for future market testing. Consumers can use this information to gauge pricing standards.
While this study does not look at revenue maximization as a function of subscription prices and subscriber bases, it provides a comparative starting point for news organizations to conduct that analysis with their own audiences.
The rest of this report contains a full analysis of how digital subscription prices vary by market area, circulation and ownership.
Analysis and results
The practices among news organizations for pricing digital subscriptions within Nielsen’s top 100 designated market areas vary widely.
Most of the organizations studied charge for digital subscriptions. These subscriptions vary in what they offer, but most include access to unlimited digital content, mobile applications and the e-edition or print replica of the printed newspaper.
The cheapest offering in this study was a promotion for a year’s subscription for $29. The most expensive, excluding introductory offers, would cost $408 annually. Automatic subscription renewals were a common feature among the pricing models.
Market size and circulation were shown to have no significant effect on prices among the 100 news organizations included in the study. Ownership, in some cases, did have an effect as some parent companies standardized prices across their news sites.
The most highly rated factor organizations consider when setting pricing models for digital content was testing prices within their market, according to a survey of 15 publishers. Collectively, they ranked ownership mandates the next most important and said competitor prices were not as important of a factor in setting prices.
The 100 selected news organizations are based in 41 states and Washington, D.C. The nine states not represented are New Hampshire, New Jersey, Delaware, North Dakota, South Dakota, Montana, Wyoming, Idaho and Alaska. A full list of the 100 newspapers is included in the methodology section of this report.
Standardized pricing structures
The pie chart below shows the distribution of subscription models by billing frequency. The majority (71%) of the 100 news organizations included in this study had monthly billing. Twenty-four charged weekly. Five required payment for a full year upfront.
| Billing Frequency | Percentage |
|---|---|
| Weekly | 24% |
| Monthly | 71% |
| Yearly | 5% |
Tracy M. Cook/American Press Institute
To fairly compare prices across all these different models, we calculated a standardized weekly price for each news site. The standardized price excludes noted introductory offers, and it was calculated as follows:
- No change for prices already listed as weekly.
- Monthly prices were multiplied by 12 (months in a year), then divided by 52 (weeks in a year).
- Yearly prices were divided by 52 (weeks in a year).
The chart below shows a distribution of these prices, which ranged from $0.46 to $7.85 per week. The median price was $2.31. The average (mean) price, inflated by higher outliers, was $2.44. The majority fell between $1 and $3 per week.
| Standard weekly prices | Percent of newpapers |
|---|---|
| $0-$0.99 | 11% |
| $1-$1.99 | 27% |
| $2-$2.99 | 30% |
| $3-$3.99 | 20% |
| $4-$4.99 | 10% |
| $5-$5.99 | 0% |
| $6-$6.99 | 1% |
| $7-$7.99 | 1% |
Tracy M. Cook/American Press Institute
The median weekly price of $2.31 from this study was 83% higher (cost $1.05 more per week) than what a 2012 study from the Reynolds Journalism Institute at the University of Missouri estimated as an optimal price. It is also 221% higher (cost $1.59 more per week) than what survey respondents were willing to pay on average, as noted in that same report.
Subscriber perks and partnerships
Several subscription pages listed added perks for paying subscribers. These benefits included but are not limited to: commenting access, fewer advertisements, improved browsing experiences, subscription sharing, monthly e-cookbooks, access to other statewide digital editions and rewards programs. Additional “insider-only” perks included newsroom tours, movie screenings and giveaways.
Some news organizations have partnered with other publications and media companies to offer bundled content under one subscription price, including partnering with one another to offer subscribers access to digital editions of other publications within the same state. Some other organizations offer digital subscriptions that include digital access to the Washington Post. The Washington Post, itself, has partnered with Hulu to offer a year of unlimited digital Washington Post access combined with Hulu access for $99. Similarly, the New York Times has partnered with Spotify to offer a year of digital New York Times access combined with Spotify Premium for $203.88.
Pricing by Designated Market Area
We charted price by market area to see whether there was a relationship between market size (population) and digital news subscription prices.
| Rank | Weekly price |
|---|---|
| 1 | $1.85 |
| 2 | $1.99 |
| 3 | $1.99 |
| 4 | $2.99 |
| 5 | $2.99 |
| 6 | $2.31 |
| 7 | $2.50 |
| 8 | $1.00 |
| 9 | $3.99 |
| 10 | $2.07 |
| 11 | $1.15 |
| 12 | $1.15 |
| 13 | $1.15 |
| 14 | $3.99 |
| 15 | $3.79 |
| 16 | $3.00 |
| 17 | $2.77 |
| 18 | $1.99 |
| 19 | $3.50 |
| 20 | $3.00 |
| 21 | $1.15 |
| 22 | $3.00 |
| 23 | $2.99 |
| 24 | $3.00 |
| 25 | $6.00 |
| 26 | $1.99 |
| 27 | $0.56 |
| 28 | $1.99 |
| 29 | $1.15 |
| 30 | $1.99 |
| 31 | $0.99 |
| 32 | $1.38 |
| 33 | $3.00 |
| 34 | $0.84 |
| 35 | $0.56 |
| 36 | $1.15 |
| 37 | $1.15 |
| 38 | $2.07 |
| 39 | $2.07 |
| 40 | $0.46 |
| 41 | $2.31 |
| 42 | $0.92 |
| 43 | $2.74 |
| 44 | $4.99 |
| 45 | $4.61 |
| 46 | $3.17 |
| 47 | $2.31 |
| 48 | $2.31 |
| 49 | $1.15 |
| 50 | $4.75 |
| 51 | $1.15 |
| 52 | $3.69 |
| 53 | $2.77 |
| 54 | $3.00 |
| 55 | $2.07 |
| 56 | $2.31 |
| 57 | $7.85 |
| 58 | $0.91 |
| 59 | $0.92 |
| 60 | $4.61 |
| 61 | $2.31 |
| 62 | $0.56 |
| 63 | $3.00 |
| 64 | $2.07 |
| 65 | $4.14 |
| 66 | $3.00 |
| 67 | $2.09 |
| 68 | $1.15 |
| 69 | $1.15 |
| 70 | $3.22 |
| 71 | $4.62 |
| 72 | $4.99 |
| 73 | $3.00 |
| 74 | $2.30 |
| 75 | $1.15 |
| 76 | $1.15 |
| 77 | $3.00 |
| 78 | $2.50 |
| 79 | $4.61 |
| 80 | $4.48 |
| 81 | $2.31 |
| 82 | $1.15 |
| 83 | $2.76 |
| 84 | $1.61 |
| 85 | $4.99 |
| 86 | $2.31 |
| 87 | $2.30 |
| 88 | $2.31 |
| 89 | $2.31 |
| 90 | $2.70 |
| 91 | $2.99 |
| 92 | $1.15 |
| 93 | $1.15 |
| 94 | $2.31 |
| 95 | $0.56 |
| 96 | $0.99 |
| 97 | $1.15 |
| 98 | $3.13 |
| 99 | $3.06 |
| 100 | $3.00 |
Tracy M. Cook/American Press Institute
Pricing by ownership
The data are further broken down by ownership to determine whether parent company has any effect on subscription pricing structure. Of the 100 organizations, five parent companies stood out as owning six or more news organizations. They are: Advance Publications, Berkshire Hathaway, Gannett, McClatchy and Tronc.
As shown in the pie chart below, these five companies accounted for 51% of the newspapers analyzed.
| Owner | Number |
|---|---|
| Advance | 10 |
| Berkshire Hathaway | 7 |
| Gannett | 19 |
| McClatchy | 9 |
| Tronc | 6 |
| Other | 49 |
Tracy M. Cook/American Press Institute
The chart below shows a distribution of the standardized price ranges by ownership. Some owners (McClatchy and Tronc) set one price for every paper in the study. Others let the price vary by market.
| Name | Low | High |
|---|---|---|
| Advance Publications | $2.74 | $6 |
| Berkshire Hathaway | $0.910 | $3.17 |
| Gannett | $0.56 | $2.31 |
| McClatchy | $3 | $3 |
| Tronc | $1.99 | $1.99 |
Tracy M. Cook/American Press Institute
- Advance Publications accounted for 10% of the publications studied. The standardized weekly prices ranged from $2.74 to $6. Subscription prices for Advance-owned publications did not follow any generalizable pattern.
- Berkshire Hathaway accounted for 7% of the publications studied. The standardized weekly prices ranged from $0.91 to $3.17. Subscription prices for Berkshire Hathaway-owned publications did not follow any generalizable pattern.
- Gannett accounted for 19% of the publications studied. The standardized weekly prices ranged from $0.56 to $2.31. Most Gannett sites (14 out of the 19) charge an introductory rate of $0.99 for the first month of access before raising rates to $4.99 per month. Four sites charged a yearly fee of $29. One listed a $9.99 monthly rate with no introductory offer.
- McClatchy accounted for 9% of the publications studied. The standardized weekly price was $3 among each of the McClatchy properties. All charged $1.99 for the first month of access before raising rates to $12.99 per month.
- Tronc accounted for 6% of the publications studied. The standardized weekly price was $1.99 per week among each of the Tronc properties. All charged $0.99 for the first four weeks of access before raising rates to $1.99 per week.
What executives consider when setting digital subscription prices
To add more context to the data we gathered about these 100 newspapers, we also conducted a survey of publishers and directors of circulation and audience development. This enabled us to ask questions about how subscription price structures are determined, including what factors news organizations weigh most heavily when setting prices.
The survey was answered by representatives from 15 of the news organizations included in this study. Their answers are intended to be anecdotal and are not necessarily representative of the 100 organizations in the overall sample.
As depicted below, market testing was rated the most important factor in determining digital-only subscription pricing structure with an average of 4.20 out of 5. Corporate-set prices followed, with a weighted average of 3.58. Industry norms were rated 3.40 and competitor prices were rated 2.33 out of 5.
| Consideration factor | Importance |
|---|---|
| Market testing | 4.2 |
| Corporate-set prices | 3.58 |
| Industry norms | 3.4 |
| Competitor prices | 2.33 |
Tracy M. Cook/American Press Institute
Introductory offers convert more often when they’re discounted, not free
Eleven of the 15 organizations had tried free trial subscription offers for digital content. All 11 organizations reported that of those free trial readers, less than 25% converted to full-price subscriptions.
Fourteen of the 15 respondents reported having tried discounted (not free) trial subscription offers. More than two-thirds of the organizations (10 out of 14) reported that more than 76% converted to full-price subscriptions. The two figures below show a visual representation of the split between these conversion rates for free-trial readers and discounted-trial readers.
| Conversion rates of free-trial readers | Frequency |
|---|---|
| 0%-25% | 11 |
| 26%-50% | 0 |
| 51%-75% | 0 |
| 76%-100% | 0 |
Tracy M. Cook/American Press Institute
| Conversion rates of free-trial readers | Frequency |
|---|---|
| 0%-25% | 0 |
| 26%-50% | 1 |
| 51%-75% | 3 |
| 76%-100% | 10 |
Tracy M. Cook/American Press Institute
It is likely the discrepancy in conversion rates between free trials and discounted trials has to do with the collection of digital payment information. Free trials may or may not require entering a credit card number, while discounted trials would require some type of payment information and have an automatic renewal set up unless the subscriber canceled in advance.
Content verticals may be untapped revenue opportunity
Two of the 15 respondents reported offering separate paid subscription models for specialized content verticals, and both were for sports. None reported offering separate subscriptions for business-to-business or industry content. This may be an untapped opportunity for revenue, especially in sports-heavy regions or those where specific business and trade segments dominate. News organizations have the potential to increase their subscriber bases and revenue by offering individualized or packaged vertical content subscriptions.
Additional findings
All but one of the respondents reported having an article meter in which readers can access a set number of articles for free before being required to pay for content access. Four of the 14 meters allowed free access to visitors referred by a social media platform. Additional findings include:
- Three organizations reported offering students a different digital-only subscription price.
- One organization reported offering a discounted digital subscription to large nonprofit organizations purchasing on behalf of their employees.
- Six organizations said marketing efforts for digital-only subscriptions are targeted at specific demographics.
Topics for further research and investigation
Building on this study and others, we see a few questions that warrant a further look by other future research:
- Limiting of ads for premium users: Some news organizations have created ad-free and/or ad-light sites for premium subscribers. Future research could study how the removal of advertising affects user experience, and whether ad-free sites are something consumers would be more willing to pay a premium for (as compared to standard unlimited access).
- Price discrimination by location: All 15 survey respondents said the price for a digital-only subscription did not vary by the subscriber’s location. However, during data collection we found that at least one organization offered a different price for in-market (in-state) subscribers than it did for out-of-state subscribers. This was verified by entering various ZIP codes on the subscription sign-up page, which required an entered ZIP code before displaying offers. It’s unclear what the motivation behind this is: to incentivize out-of-market readers to subscribe, capitalize on in-market readers who may be willing to pay a premium for digital news content (if few or no quality substitutes exist), or something else. Future research could study how consumers’ willingness to pay varies by whether the news content they’re consuming is from their home market or elsewhere. That research could be used to inform publishers who could then price discriminate by customer location (or at least, where their payment method is registered).
Content recommendations based on subscribers’ preferences: Some media companies limit how many people and/or devices can be added to a single subscription. In some cases, such as music streaming service Spotify, content is personalized to the account holder’s tastes and preferences, which incentivizes individuals who would otherwise share login credentials to pay for their own accounts so that someone else’s music choices do not affect their own personalized playlists. Future research could test whether this model be applied to online news content.
Study design
Methodology
This study sets out to answer the following research questions:
- What are the trends of acceptable or common practice among pricing structures for digital content among legacy news organizations in Nielsen’s top 100 designated market areas?
- How do market size, circulation and ownership correlate or differ among news organizations’ digital subscription pricing structures?
- What factors do these organizations consider when setting business models for online content?
The database for this study comprises 100 U.S.-based legacy newspapers, each of which is based in one of Nielsen Media Research’s 100 largest designated market areas. Each of the 100 DMAs is represented by a corresponding legacy news media organization based in that area.
We recorded the digital subscription pricing structure for each organization, including introductory offers and promotions, as well as the cost as measured on a per-week basis, per-month basis, or other listed format. Using those metrics, we calculated a standardized weekly price, excluding listed introductory promotions to more easily compare prices across organizations. We also included the news organization’s owner to determine whether some price structures are standardized across companies. To determine whether prices are correlated with circulation, we recorded Sunday print circulation figures from the Alliance for Audited Media. We used the Sunday print category because it was the only consistent field among the 100 news organizations. While AAM collects figures for digital replicas and digital non-replicas, these figures are not reported consistently by every organization. (When digital ads are sold by digital page views, publishers and advertising managers have greater incentive to track click numbers, not subscribers.) Some organizations, including the New York Times, report a value of zero for both categories despite having subscribers who pay for digital-only access. These zeros in turn affect the total circulation figures, which disqualified it from the analysis.
After we gathered the data, we developed a survey instrument and distributed it to editors at the news organizations. The 20-question reader revenue survey was designed to find out how organizations determine their pricing models for digital content.
Limitations
- Promotions: This study is limited by the two-day period in mid-October 2017 during which prices were collected. Like other online products, prices for online news subscriptions fluctuate and are subject to sales and other “specials” as set by the owner. These sales include seasonal promotions, including but not limited to back-to-school, Halloween, and Black Friday sales. The variation in promotional pricing limits analysis across a wide swath of news organizations because the data collection is time intensive, and prices can vary day-by-day. While sales tied to holiday marketing can be planned around for analysis purposes, companies may market short-term promotions in such a way that makes it unclear how long that price will hold. Best practice for future studies would be to avoid sales and any “specials” weeks, though this may not be entirely possible.
- Barriers to entry: Some sites require users to make an account in order to view subscription prices. Signing up requires entering data that may include name, email, phone number, address, billing information, etc. This requirement is a barrier that could deter some would-be subscribers who may not want to give up that information before seeing a price and/or deciding to subscribe.
- Scale: This study includes 100 legacy news organizations. However, thousands more exist but were not included because of high data collection costs. This small sample size may potentially limit the range of prices offered.
- Bundled content. Some organizations price bundled content cheaper than digital-only access. This may be in an effort to raise print circulation numbers to report to advertisers. This study, however, only considered digital-only subscription prices.
Full list of papers (by state):
Alabama
Huntsville Times
Press-Register (Mobile)
The Birmingham News
Arizona
Arizona Daily Star (Tucson)
Arizona Republic (Phoenix)
Arkansas
Arkansas Democrat-Gazette (Little Rock)
Southwest Times Record (Fort Smith)
California
Fresno Bee
Los Angeles Times
Sacramento Bee
San Francisco Chronicle
The San Diego Union-Tribune
Colorado
Gazette (Colorado Springs)
The Denver Post
Connecticut
Hartford Courant
District of Columbia
Washington Post
Florida
Florida Times-Union (Jacksonville)
News-Press (Fort Myers)
Orlando Sentinel
Tampa Bay Times (St. Petersburg)
The Miami Herald (Miami)
The Palm Beach Post (West Palm Beach)
Georgia
Atlanta Journal-Constitution
Savannah Morning News
Hawaii
Honolulu Star-Advertiser
Illinois
Chicago Tribune
State Journal-Register (Springfield)
Indiana
Indianapolis Star
South Bend Tribune
Iowa
Des Moines Register
Gazette (Cedar Rapids)
Kansas
Wichita Eagle
Kentucky
Courier-Journal (Louisville)
Lexington Herald-Leader
Louisiana
Advocate (Baton Rouge)
Times (Shreveport)
Times-Picayune (New Orleans)
Maine
Portland Press Herald
Maryland
The Baltimore Sun
Massachusetts
Boston Globe
Michigan
Detroit Free Press
Flint Journal
Grand Rapids Press
Minnesota
Star Tribune (Minneapolis)
Mississippi
Clarion-Ledger (Jackson)
Missouri
Kansas City Star
News-Leader (Springfield)
Southeast Missourian (Cape Girardeau)
St. Louis Post-Dispatch
Nebraska
Omaha World-Herald
Nevada
Las Vegas Review-Journal
New Mexico
Albuquerque Journal
New York
Buffalo News
Democrat and Chronicle (Rochester)
New York Times
Post-Standard (Syracuse)
Times Union (Albany)
North Carolina
Charlotte Observer
Daily Reflector (Greeneville)
News & Observer (Raleigh)
News & Record (Greensboro)
Ohio
Blade (Toledo)
Cincinnati Enquirer
Columbus Dispatch
Dayton Daily News
Plain Dealer (Cleveland)
Oklahoma
Oklahoman (Oklahoma City)
Tulsa World
Oregon
Oregonian (Portland)
Pennsylvania
Patriot-News (Mechanicsburg)
Philadelphia Inquirer
Pittsburgh Post-Gazette
Times-Tribune (Scranton)
Rhode Island
Providence Journal
South Carolina
Greenville News
Post and Courier (Charleston)
State (Columbia)
Tennessee
Chattanooga Times Free Press
Commercial Appeal (Memphis)
Kingsport Times-News
Knoxville News Sentinel
Tennessean (Nashville)
Texas
Austin American-Statesman
Dallas Morning News
El Paso Times
Houston Chronicle
Monitor (McAllen)
San Antonio Express-News
Waco Tribune-Herald
Utah
The Salt Lake Tribune (Salt Lake City)
Vermont
Burlington Free Press
Virginia
Richmond Times-Dispatch
Roanoke Times
Virginian-Pilot (Norfolk)
Washington
Seattle Times
Spokesman-Review (Spokane)
West Virginia
Charleston Gazette-Mail
Wisconsin
Green Bay Press-Gazette
Milwaukee Journal Sentinel
Wisconsin State Journal (Madison)
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