Digital subscriber survey results executive summaryPresentation Transcript
IntroductionSince 2007, Dovetail has conducted an annualsurvey of active magazine subscribers which looksat how consumers use and view their subscription,particularly in relation to the core subscriptionservice. For the 2013 survey, it was decided tozoom in on subscribers’ usage of print magazines,digital content and brand websites - the DigitalSubscriber Survey (DSS).Thirteen publishers agreed to take part in the DSSproject, pooling subscriber data across both theprint and digital editions of 231 titles. Almost71,000 subscribers responded, making the surveyone of the largest of its kind in the world, providinga detailed view of the market for digital content.The whole project was very much intended as apilot mapping of a rapidly shifting landscape,intentionally trying to find out more aboutbehaviours rather than pinning down precisemarket shares.The project has generated a mass of granular detailto which the participants have online access. Thisreport is the topline summary of the overall results.The questionnaire was created, the resultsanalysed and this report written by WessendenMarketing.MethodologySelections of email addresses were taken from theactive subscriber files of the participating titles andan email, sent with the individual title’s branding,was broadcast to the names, driving them to anonline self-completion questionnaire.Collectively, 70,765 completedquestionnaires were generated over aperiod running from January 9th through toFebruary 28th 2013. This represents a 10%response rate to the emailing of just under713,000 names.The fieldwork was undertaken just afterChristmas in order to pick up the festive salesboom in tablets and smartphones.Respondents are self-selecting and, due to theonline methodology, are likely to be more digitallyaware than average. In addition, only magazineswhich had an active digital edition participated.An incentive was offered to the consumer tocomplete the survey: entry into a prize draw where10 prizes of £100 each were available to be won.Respondents had to elect to be entered with over98% choosing to do so.For a copy of the full report please contactRanj Begley at Dovetail Services email@example.com 414510 / 07787505634Page 1Topline Summary of Dovetails "Digital Subscriber Survey 2013"
It is not a single marketThe first conclusion is that the “digital content market” is not asingle, coherent market at all, but is a series of micro marketsmoving at different speeds and in different directions. Thedigital map to the right illustrates the point, by charting thevarious magazine sectors covered in the survey.The horizontal axis shows the percentage of activemagazine subscribers who have an iPad. Theaverage is 37%, demonstrating that magazinesubscribers are much more digitally-enabled thanthe average UK population. The vertical axischarts the percentage of subscribers who are“digitally active” – defined as to whetherthey have at least one digital magazine intheir current magazine repertoire.Here the average across the sampleis 23%. Yet what is striking is thewide spread of markets acrossthe map.Take two markets from theopposite edges of the chart. Men’sLifestyle is a leading digital market –young, male, techno-savvy, served by somepublishers who themselves are digitally sophisticated. Itis the tablet which is driving digital reading – 83% are using atablet to access magazine content with smartphones in second place(40%). Over to the left is Retirement which is very different demographicallyand which has, on the surface at least, a lot less digital activity. Yet there is actuallymore going on than meets the eye, but the digital activity is very website-focused using aPC rather than a tablet or smartphone to access content.Page 2Topline Summary of Dovetails "Digital Subscriber Survey 2013"
Understanding the customerThe survey suggests that there are three key drivers shapingcustomers digital behaviour regardless of the market sector theyare in. These drivers should be shaping publisher digital strategiesand business models.These three key drivers are...The extent to which customers are accepting of digital content...The purpose for which customers wish to use digital content...The degree to which customers have access to digital content.Page 3Topline Summary of Dovetails "Digital Subscriber Survey 2013"
Print-Only readers account for around three quarters of the subscribersquestioned. Most are cautious about digital magazines – a quarter of themhas actually tried a digital magazine and has dropped it in disappointment.They currently have no digital magazines in their repertoire - they simplyprefer print.Digital-Only readers are in a small minority – in most sectors under 1% –and they have no print magazines at all in their repertoire. They still spenda significant amount of time reading magazines, but their magazine spendis almost 30% less than Print-Onlys partly because digital editions tend tocost significantly less than print copies. Yet this is as much to do withpublisher pricing as to consumer price expectations.The most fertile area is made up of Print+Digital readers who have at leastone digital magazine in their repertoire – and almost half of them currentlyhave only one. They make up just under a quarter of subscribers and theyare voracious magazine consumers spending 1.6 timesmore per month than Print-Onlys and over doubleDigital-Onlys. They also have much higher levels ofintention to renew their subscriptions, as they are farmore engaged with their chosen brands.Driver 1: digital acceptanceHere, customers break down into three broad groups:Page 4Topline Summary of Dovetails "Digital Subscriber Survey 2013"
Enhancers are using the digital versions of their core print magazines todeepen their contact with the brands they know and to make magazinereading an easy, flexible, anywhere experience. They tend to have print +digital subscription bundles. They should be the most lucrative segment forpublishers, but they are not currently, because publisher pricing has notbeen robust enough to date. The opportunity presented by Enhancers forpublisher upselling is evident.Experimenters are using digital editions to trial titles outside their core printrepertoire. They spend as much on print magazines as Enhancers, but theyare the lowest digital spenders as they tend to buy ad hoc, single issues orto take up free offers. They are prime acquisition conversion prospects.Migrators read the digital versions of the magazine brands thatthey used to read in print. They form the smallest of thethree segments at just under 30% of the total, but theyare the highest spenders: their monthly print spend isstill significant and is only about 10% lower than theother two groups, but their digital spend is muchhigher – they understand digital and are prepared topay a realistic sum of money for a digital subscriptionto a magazine they want. In terms of purchasemechanism, this group is the most likely to commit to adigital subscription. What they will ultimately end upmigrating into is a key (but currently unanswerable) question.Driver 2: digital purposeDigital purpose is based on how and why digitally active customersare using their digital magazines. Here too, customers break downinto three broad groups:Page 5Topline Summary of Dovetails "Digital Subscriber Survey 2013"
Driver 3: digital accessDigital access is centred on what devices (most respondents use more thanone) the consumer uses to access digital magazine content. This clearly setsthe whole context for the reading experience in terms of design and layout andwhether the content is a complete issue or is made up of smaller editorial“chunks”.Smartphones add in two additional dimensions. Firstly, is the content offerbased on information or on tasks (e.g. finding and buying products andservices) which are often related to the phone’s geolocation capabilities?Secondly, there is often a stronger social media dimension in terms of both thecontent and the marketing of the publisher service.Digital access is not all about tablets. In some markets (e.g. Retirement), thedesktop and laptop PC remain the dominant delivery channel.In other markets (e.g. Men’s Lifestyle), the smartphone is rapidly becoming akey access device and is already a current reality in most markets.What is also clear is that increasingly consumers are using morethan one device to access their magazine content andappreciate being able to move from device to device.Page 6Topline Summary of Dovetails "Digital Subscriber Survey 2013"
Digital products do not need deep discountsSurvey respondents were asked that if they could buy the digital version of amagazine as a standalone, how much would they be prepared to pay. Thegraph shows the price sensitivity curve, relating the digital price to the printprice. What it shows is that pricing is very sensitive in a fairly tight band. Pushthe digital price to 10% above the print price and sales plummet, but after thatthe line flattens out. Cut the digital price by 15% below the print price and salesrocket, but after that there is a more gentle, straight line relationship. Pricemakes a real difference to sales, but the deep discounting of digital contentseems to be unnecessary.We also asked about the pricing of print+digital bundles. The pleasingconclusion seems to be that there is a grudging, but growing consumeracceptance of the premium pricing of bundles.The fear of cannibalisation is oftenoverstatedThe DSS shows that the modern magazine reader is under tremendous moneyand time pressures. Customers’ ‘magazine time’ is simply being eroded by thesheer range of competitive digital entertainment available ranging from YouTubeviewing to Twitter addiction It is these factors which have been cutting into printmagazine sales more than anything else and not the advent of digital magazinecontent itself.The amount of print sales that are being lost by simply migrating from the printversion into the digital version of the same product is actually very limited. Thefear of cannibalising print sales by offering multiple print and digital contentoptions should not overshadow the much bigger threat of simply losing profileand presence in an intensely competitive marketplace by not having a strongdigital offer.Importantly, digitally active subscribers still want print versions of their coremagazines. The majority of those who have both formats are still “print first” –digital complements and adds to the print experience rather than replacing it.Page 7Topline Summary of Dovetails "Digital Subscriber Survey 2013"
Practical service issuesStart-upRespondents were asked about the initial registration / purchase of thedigital edition. Overall, 70% agree that it is easy and straightforward. Thisis a good, but not overwhelmingly positive response with a significant rangeof scores from title to title and from sector to sector, showing that publisherproficiency can vary markedly.Downloads97.4% of subscribers are satisfied with the customer servicestandards on their print subscription whereas a lower 91.6% aresatisfied on their digital subscription – a significant gap, pointing tothe fact that digital CS is more challenging and is partly a technicalhelp-desk facility rather than traditional magazine subscription CS.Only 55% of subscribers use the online self-service subscriptionservice where it is available.Again, solid scores, but with a wide range behind the overall average.Overall customer service68% agree that download times are “reasonable”.63% agree that the ongoing process of downloading issues hasbeen “problem free”.Page 8Topline Summary of Dovetails "Digital Subscriber Survey 2013"
Digital is just another channelGo back to the early 1980s and the industry was agonising over the entry ofthe supermarkets into magazine retailing. There were fears aboutcannibalisation and supermarket power. Supermarkets tended to be treatedas a single channel rather than a series of quite distinct operations, locationsand shopper missions. There were assumptions (most of them wrong)about how it would all work – for example, it was thought that there wouldjust be a limited range of women’s glossies on display at the checkout only.Some publishers wanted to walk away from the supermarkets completely,which now just seems unrealistic. Ultimately, the supermarkets helped growthe overall magazine market.We are very much at an analogous stage with digital. We cannot be totallysure where it is all going to end up - it is both an exciting opportunity and abit of a gamble, but it is also inevitable. Yet just as supermarkets can be aperipheral or inappropriate channel for many print magazines, so it may turnout to be with digital, with some brands finding a much more stable andlucrative future by remaining anchored firmly in print. The indications arethat this will be particularly true for high-end, niche print products.Digital has turned out to be much more complicated than we originallythought, but it can be controlled with the same channel managementdisciplines and logic as print retail and print subscriptions, but that requiresdeep customer insight driving appropriate business models. It also needsclear, long-term, strategic thinking now so that a meaningful and profitabledigital channel can be maintained.Page 9Topline Summary of Dovetails "Digital Subscriber Survey 2013"
Page 10About DovetailDovetail stands out from the crowd – with its coreskills and expertise in subscriptions marketing andfulfilment. Our aim is to work with publishers indeveloping a framework that matches their owncustomers’ demands. Whether you wish to focus onintelligent reporting, improving customer service ormarketing workshops, Dovetail will work with youtowards your goals. Combine this with our clearunderstanding of the demands and tipping-points ofpublishing houses and you will find a pool oftalented people, able to deliver your subscriptionvision.About DemographixDemographix is the leading UK developer of onlineresearch tools. Our mission is to provide qualityonline technology to back-up sales insight andresearch professionals in all walks of life. Our toolsare designed to be easy-to-use, to minimise stafftraining, and to make the on-going cost ofsupporting and updating them as minimal aspossible. We specialise in optimising online surveysfor smartphone and tablet users (as well as desktoprespondents), ensuring response levels aremaximised by reaching out to all. Our panelmanagement system allows brand managers to getqualitative research from key customers and totrack trends in more cost-effective ways. Talk to usabout any bespoke research projects you may beconsidering.About WessendenWessenden Marketing is a leading provider ofconsultancy, information, research and training formedia companies and for organisations involved inmedia supply chains. Consumer marketing andpromotions (retail, subscription and online), lie atthe core of the consultancy. Yet WessendenMarketing’s projects extend well beyond this intogeneral strategy and re-engineering. Newsletters,reports and market statistics back up the consultingoperation.Topline Summary of Dovetails "Digital Subscriber Survey 2013"