By Niels Vestergaard
The way we view, and present prices is changing. More and more subscription companies are introducing new tiers to meet the demand for lower prices at the expense of either ads or restricted amounts of content. Netflix and Disney+ are introducing ad-supported plans, to accommodate subscribers looking for a smaller price. And media companies like The Financial Times, New York Times and Insider is introducing ‘Dynamic Pricing Paywalls’ with incredible results.
Canadian news provider The Globe and Mail managed to increase registrations by 100%, resulting in an increase of the subscriber count of 51%. By letting users engage more before hitting a personalized paywall, Norwegian Polaris Media increased their click rate by 197% in the first month of the initiative. The New York Times has just announced that the goal for 2027 is reaching 15 million subscribers, because their dynamic pricing strategy is so strong. And we’re talking about a company that had just 1 million subscribers in 2015. Looking to 15x your subscription revenue in 12 years? You better start considering Dynamic Pricing and intelligent paywalls!
What is Dynamic Pricing?
Dynamic pricing is simply the concept of adjusting the price of the introduction offer, to the needs of the specific consumer. This includes sophisticated segmentation, and most firms use a tool like Piano or another AI-tool to tailor paywalls and offers to the specific needs of the potential subscriber. Meaning, customers with a low chance of converting will be presented with a lower price than customers who might be more motivated. This is all defined by identifying different user segments and customizing the paywall content for each segment.
It’s an approach that has proved very effective for media providers and content websites and it carries lessons from some of the most successful subscription companies in the world.
What is an intelligent paywall?
Much like the Freemium model, moulding a subscriber is about creating a habit or need that becomes a central part of your everyday life. However, historically, media companies have presented the paywall after providing just one or two articles for free and locking down the site with a paywall immediately. But now, it seems the media companies have taken a page out of Spotify’s playbook. If Spotify only allowed me to listen to one or two songs a day, I would have a hard time creating a habit. However, the fact that I can listen as much as I want with ads, reminds me that I have a need for the service. And it quickly becomes annoying to listen to ads and not being able to choose specific songs. So, I’ll pay.
Intelligent paywalls operate from this perspective and try to meet the consumer at the exact best time to convert. Depending on your situation, you might want to read 3-4 articles before deciding and some might need to read 10. Some people may have a hard time committing for 6 months and some might not. Some might have a monthly news budget of $5 and some might have one of $15. Being able to meet these needs and tailor the offer, is a wonderful way to start the relationship with your customer.
Split your content into snackable options and watch your revenue soar!
I mentioned the Cinderella story of The New York Times and their outrageous growth in the past 10 years. But this is not only a result of intelligent paywalls and dynamic pricing. Well, in a way it still is though.
What the New York Times did was create several universes of content. Sure, you can pay for the All-Access subscription to get all their digital content, but you can also just subscribe to the Games subscription, if you’re only interested in access to apps and the award-winning NY times crossword. Perhaps you only need to check up on your favourite sports teams and want the Sports-only subscription. Or you might just need the great news that NY Times provide, and you just need the news subscription. Initially providing your subscribers with the content they are most passionate about, might be the way to get them engaged with other content from your hand. Or it might not – either way, you’ve gained a new subscriber and you have a great opportunity to upsell to this customer going forward.
If you’re looking to learn more about dynamic pricing and intelligent paywalls, contact our Excellence Lead, Anders Sørensen to hear more about how this can increase your revenue and subscriber acquisition.