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Getting People to Pay for Local News Online – ONA19

Going beyond page views and duration, analysts with Northwestern's Medill School delved into reader and subscriber behavior data from 16 news markets large and small and will present research findings that detail who pays for local news online, and why.

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Getting People to Pay for Local News
Online
Online News Association
Tim Franklin, Senior Associate Dean, Medill School
Leader, Medill Local News Initiative
1
Ed Malthouse, Research Director,
Spiegel Research Center, Medill
Audrey Cooper
Editor in Chief
Amalie Nash
Vice President of Local News
Christine Taylor
Managing Editor/Audience
The Medill Local News Initiative
Research and Development Project
3
https://localnewsinitiative.northwestern.edu/
@LocalNewsIni
@LocalNewsIniati
ve
News
Leaders
Project
Medill interviewed
more than 50 news
executives and local
news thought leaders.
The report explores
trends and
innovations in local
news business models.
Reaching for a New
Business Model
Reader
Revolution
Data scientists and researchers
from Medill’s Spiegel Research
Center analyzed more than 13
terabytes of integrated reader
and subscriber data from 16
local news organizations.
Medill’s Knight Lab conducted
human-centered design
research.
The findings are challenging
conventional wisdom about
strategy, organization and
metrics for success.
“This research is
really a paradigm
shift . . .
It’s a big shift, a
huge kind of shift
in mission.”
- Tom Rosenstiel,
Executive Director,
American Press Institute
A.G. Sulzberger
Publisher, The New York Times
“The pay model strategy is deceptively
simple. It is making something worth
paying for. You can call it marketing
strategy, you can call it a digital
subscription strategy. But at the end of
the day, it's making something worth
paying for.”
--- Interview with Medill News Leaders
Project
Reader Revolution
• “We cannot change who we get our
money from without significantly changing
the product we offer them. Otherwise, the
reader revolution will become yet another
missed opportunity killed by half
measures.”
• Jim Brady, CEO, Spirited Media, Former ONA President
• Written for Reynolds Journalism Institute at the University of Missouri School of Journalism
9
Let Go:
10
Advertising-driven metrics like page
views and time spent.
Old organizational structures.
Commodity content.
Overwhelming readers with volume.
Think quality and smart curation.
Low reader interest topics and beats.
Bad user experience on your site and
apps.
Paying for Local News
Biggest Key: Build Habits
How Do You Do That?
12
Original, unique, local, quality journalism.
Understand your own audience’s interests and needs.
Summarize, curate, educate.
Engage with tools like newsletters that are local and relevant.
Invest in user experience.
The New Paradigm of
Readership in Local News
Edward C. Malthouse
Erastus Otis Haven Professor of Integrated Marketing Communication
Professor of Industrial Engineering and Management Science
Research Director, Spiegel Center on Digital and Database Marketing
Northwestern University
With Yayu Zhou, Yasaman Kamyab Hessary, Bobby Calder,
Tom Collinger, and Wei-Lin Wang
Engagement Monitoring System
Process
1. Decide on a financial outcome
2. Identify engagement (reading) indicators
3. Determine which reading behaviors drive the outcome
4. Understand what types of stories drive the important
reading behaviors
5. Stimulate higher levels of important types to increase
important reading behaviors and ultimately the
outcome
6. Monitor reading behaviors and the outcome to know
what works
1. Financial
Outcome:
willingness to
pay,
e.g., subscription
1. Financial
Outcome:
willingness to
pay
e.g., subscription
2. Reader behaviors
• Page views
• Time/page
• Mobile views
• Reading days/month
• Reading breadth
1. Financial
Outcome:
willingness to
pay
e.g., subscription
2. Reader behaviors
• Page views
• Time/page
• Mobile views
• Reading days/month
• Reading breadth
3. Determine which reading
behaviors drive outcome
Control Variables
• Pricing and
payment
• Observed customer
characteristics
• Seasonality /
exogenous factors
?
1. Financial
Outcome:
willingness to
pay
e.g., subscription
2. Reader behaviors
• Page views
• Time/page
• Mobile views
• Regularity
• Reading breadth
3. Determine which reading
behaviors drive outcome
Control Variables
• Pricing and
payment
• Observed customer
characteristics
• Seasonality /
exogenous factors
The regularity of reading is
associated with retention
One Larger Market 12 Smaller Markets
1. Financial
Outcome:
willingness to
pay
e.g., subscription
2. Reader behaviors
• Page views
• Time/page
• Mobile views
• Regularity
• Reading breadth
3. Determine which reading
behaviors drive outcome
Control Variables
• Pricing and
payment
• Observed customer
characteristics
• Seasonality /
exogenous factors
Story Types
Differentiated
• Local news
• Local sports
• Local columnists
• Local entertainment
• …
Commoditized
• National news
• National sports
• Syndicated
columnists
• National lifestyle
• …
?
4. Determine which story types
drive important reading behaviors
Getting People to Pay for Local News Online – ONA19
Willingness
to pay
e.g., subscription
Regularity
Touch point 1
5. Stimulate important
reading behaviors
Touch point 2
Touch point 3
6. Monitor important
reading behaviors and
outcomes
Data and methods
• We have 16 news organization partners
– Four large-city news organizations
– 12 small-market news organizations in the Midwest
• For each paper we have …
– Subscriber records for many years
– Click-stream reading data for roughly two years (13 TB)
– In some cases, subscriptions to newsletters
• Estimate multivariate survival analysis models predicting
the time until churn (canceling) for subscribers, including
controls and reading behaviors as lagged, time-dependent
covariates
Predict churn among digital-only
subscribers:
Big
Market A
Big
Market
B
Big
Market C
12 Small
Markets
Habit (Days) -10.3 -8.5 -5.5 -9.6
Extent (PV/day) 13.5 2.6 -0.8 4.4
Depth (Time/PV) 2.1 3.6 1.6 1.1
Breadth -7.2 0.37 4.3 0.7
Mobile -3.025 5.3 1.2
Green is good (retention)
Red is bad (churn)
Regularity drives retention
Extent & Depth drive churn
Key question: why would page views be associated with churn?
Z-scores for slopes predicting churn
Mobile varies by market
Getting People to Pay for Local News Online – ONA19
Getting People to Pay for Local News Online – ONA19
Testing ad-interference hypothesis
• One paper could provide
a variable indicating if the
subscriber used an ad
blocker
• We estimated a model
with the same controls,
allowing for different
effects for extent
• The effect of extent on
canceling is reduced for
those using ad blockers!
27
A Disengagement Experience
Lack of
local focus
“You could move this newspaper to another city
and it wouldn’t make a difference”
“This newspaper does
not have a local flavor”
“It does not have a lot of
really local news”
Quote from Bob Picard
Reuters Institute, Oxford
“One cannot expect newspaper readers to pay for
page after page of stories from news agencies that
were available online yesterday and are in a
thousand other papers today. Providing a food
section that pales by comparison to the content of
food magazines or television cooking shows is not
likely to create much value for readers.”
29
Predict churn among digital subscribers
Differentiated versus commoditized
Big A Big B Big C Small 12
Mobile -8.71 2.12 -2.30 -2.33
Home page -3.69 1.26 -0.86 -1.29
Differentiated -6.75 -3.60 -2.02 -0.78
Commoditized 33.3 -0.80 -2.45 -4.28
Differentiated drives retention
Commoditized varies by market
• Other drivers of churn (in some markets): Nascar, horoscopes, certain
syndicated columnists, recipes
• Other drivers of retention: local food, local entertainment, certain local
columnists
Mobile varies by market
A Disengagement Experience
Challenge: Get consumers to have less of this experiences
Too Much
experience
“It has too many
sections”
“The newspaper tries to
cover too much”
“I wish the newspaper had fewer pages”
“The Sunday newspaper
is way too big”
“Many of the articles
are too long.”
“I feel drown by the news”
“I already know what is going on without
having to read the paper—repetition is
boring, plus the news can be depressing.”
Getting People to Pay for Local News Online – ONA19
33
How to drive regularity and avoid overload?
News briefings?
https://www.bbc.com/news/uk-46551986
BBC
Testing Newsletter Hypothesis
• We have data from one news site on who
subscribes to newsletters
• Newsletters that drive retention: “Now,”
“Things to do,” “Breaking News”
• Newsletters with no effect on retention:
Sports, Business, Politics, Local News
• Newsletters that drive churn: Entertainment
• Conclusion: newsletters (especially local) can
drive retention, but must be tested
35
Summary of findings
• In all 16 markets,
– Regularity of reading consistently drives retention
– Reading local (differentiated) content drives retention and regularity, but the
most powerful content varies across market:
• Local sports coverage matters more in some markets than others
• Local entertainment and food important in some markets, but not others
• In our 12 smaller markets,
– Reading national news drives retention and habit, but less so in large markets.
– Paywall and error pages drive churn—fix the user experience
• Subscribing to updates and newsletters can drive retention
• Effects of device (mobile vs. PC) vary across markets
• Use of ad blockers reduces the positive association between page views and churn in
the one market
Implication
• Make sure consumers derive value regularly
– Understand your value proposition
– Email updates and newsletters are an obvious way to
drive regularity, but they should be tested
• Pay attention to the user experience.
• Drivers of churn
– Test effects of advertising
– Test effects of commoditized vs. local content
• Personalization seems to be unexplored by local
news organizations, but must done with care so as
not to create news bubbles
37
38
https://localnewsinitiative.northwestern.edu/projects/news-leaders/

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Getting People to Pay for Local News Online – ONA19

  • 1. Getting People to Pay for Local News Online Online News Association Tim Franklin, Senior Associate Dean, Medill School Leader, Medill Local News Initiative
  • 2. 1 Ed Malthouse, Research Director, Spiegel Research Center, Medill Audrey Cooper Editor in Chief Amalie Nash Vice President of Local News Christine Taylor Managing Editor/Audience
  • 3. The Medill Local News Initiative Research and Development Project
  • 5. News Leaders Project Medill interviewed more than 50 news executives and local news thought leaders. The report explores trends and innovations in local news business models.
  • 6. Reaching for a New Business Model Reader Revolution
  • 7. Data scientists and researchers from Medill’s Spiegel Research Center analyzed more than 13 terabytes of integrated reader and subscriber data from 16 local news organizations. Medill’s Knight Lab conducted human-centered design research. The findings are challenging conventional wisdom about strategy, organization and metrics for success.
  • 8. “This research is really a paradigm shift . . . It’s a big shift, a huge kind of shift in mission.” - Tom Rosenstiel, Executive Director, American Press Institute
  • 9. A.G. Sulzberger Publisher, The New York Times “The pay model strategy is deceptively simple. It is making something worth paying for. You can call it marketing strategy, you can call it a digital subscription strategy. But at the end of the day, it's making something worth paying for.” --- Interview with Medill News Leaders Project
  • 10. Reader Revolution • “We cannot change who we get our money from without significantly changing the product we offer them. Otherwise, the reader revolution will become yet another missed opportunity killed by half measures.” • Jim Brady, CEO, Spirited Media, Former ONA President • Written for Reynolds Journalism Institute at the University of Missouri School of Journalism 9
  • 11. Let Go: 10 Advertising-driven metrics like page views and time spent. Old organizational structures. Commodity content. Overwhelming readers with volume. Think quality and smart curation. Low reader interest topics and beats. Bad user experience on your site and apps.
  • 12. Paying for Local News Biggest Key: Build Habits
  • 13. How Do You Do That? 12 Original, unique, local, quality journalism. Understand your own audience’s interests and needs. Summarize, curate, educate. Engage with tools like newsletters that are local and relevant. Invest in user experience.
  • 14. The New Paradigm of Readership in Local News Edward C. Malthouse Erastus Otis Haven Professor of Integrated Marketing Communication Professor of Industrial Engineering and Management Science Research Director, Spiegel Center on Digital and Database Marketing Northwestern University With Yayu Zhou, Yasaman Kamyab Hessary, Bobby Calder, Tom Collinger, and Wei-Lin Wang
  • 15. Engagement Monitoring System Process 1. Decide on a financial outcome 2. Identify engagement (reading) indicators 3. Determine which reading behaviors drive the outcome 4. Understand what types of stories drive the important reading behaviors 5. Stimulate higher levels of important types to increase important reading behaviors and ultimately the outcome 6. Monitor reading behaviors and the outcome to know what works
  • 17. 1. Financial Outcome: willingness to pay e.g., subscription 2. Reader behaviors • Page views • Time/page • Mobile views • Reading days/month • Reading breadth
  • 18. 1. Financial Outcome: willingness to pay e.g., subscription 2. Reader behaviors • Page views • Time/page • Mobile views • Reading days/month • Reading breadth 3. Determine which reading behaviors drive outcome Control Variables • Pricing and payment • Observed customer characteristics • Seasonality / exogenous factors ?
  • 19. 1. Financial Outcome: willingness to pay e.g., subscription 2. Reader behaviors • Page views • Time/page • Mobile views • Regularity • Reading breadth 3. Determine which reading behaviors drive outcome Control Variables • Pricing and payment • Observed customer characteristics • Seasonality / exogenous factors
  • 20. The regularity of reading is associated with retention One Larger Market 12 Smaller Markets
  • 21. 1. Financial Outcome: willingness to pay e.g., subscription 2. Reader behaviors • Page views • Time/page • Mobile views • Regularity • Reading breadth 3. Determine which reading behaviors drive outcome Control Variables • Pricing and payment • Observed customer characteristics • Seasonality / exogenous factors Story Types Differentiated • Local news • Local sports • Local columnists • Local entertainment • … Commoditized • National news • National sports • Syndicated columnists • National lifestyle • … ? 4. Determine which story types drive important reading behaviors
  • 23. Willingness to pay e.g., subscription Regularity Touch point 1 5. Stimulate important reading behaviors Touch point 2 Touch point 3 6. Monitor important reading behaviors and outcomes
  • 24. Data and methods • We have 16 news organization partners – Four large-city news organizations – 12 small-market news organizations in the Midwest • For each paper we have … – Subscriber records for many years – Click-stream reading data for roughly two years (13 TB) – In some cases, subscriptions to newsletters • Estimate multivariate survival analysis models predicting the time until churn (canceling) for subscribers, including controls and reading behaviors as lagged, time-dependent covariates
  • 25. Predict churn among digital-only subscribers: Big Market A Big Market B Big Market C 12 Small Markets Habit (Days) -10.3 -8.5 -5.5 -9.6 Extent (PV/day) 13.5 2.6 -0.8 4.4 Depth (Time/PV) 2.1 3.6 1.6 1.1 Breadth -7.2 0.37 4.3 0.7 Mobile -3.025 5.3 1.2 Green is good (retention) Red is bad (churn) Regularity drives retention Extent & Depth drive churn Key question: why would page views be associated with churn? Z-scores for slopes predicting churn Mobile varies by market
  • 28. Testing ad-interference hypothesis • One paper could provide a variable indicating if the subscriber used an ad blocker • We estimated a model with the same controls, allowing for different effects for extent • The effect of extent on canceling is reduced for those using ad blockers! 27
  • 29. A Disengagement Experience Lack of local focus “You could move this newspaper to another city and it wouldn’t make a difference” “This newspaper does not have a local flavor” “It does not have a lot of really local news”
  • 30. Quote from Bob Picard Reuters Institute, Oxford “One cannot expect newspaper readers to pay for page after page of stories from news agencies that were available online yesterday and are in a thousand other papers today. Providing a food section that pales by comparison to the content of food magazines or television cooking shows is not likely to create much value for readers.” 29
  • 31. Predict churn among digital subscribers Differentiated versus commoditized Big A Big B Big C Small 12 Mobile -8.71 2.12 -2.30 -2.33 Home page -3.69 1.26 -0.86 -1.29 Differentiated -6.75 -3.60 -2.02 -0.78 Commoditized 33.3 -0.80 -2.45 -4.28 Differentiated drives retention Commoditized varies by market • Other drivers of churn (in some markets): Nascar, horoscopes, certain syndicated columnists, recipes • Other drivers of retention: local food, local entertainment, certain local columnists Mobile varies by market
  • 32. A Disengagement Experience Challenge: Get consumers to have less of this experiences Too Much experience “It has too many sections” “The newspaper tries to cover too much” “I wish the newspaper had fewer pages” “The Sunday newspaper is way too big” “Many of the articles are too long.” “I feel drown by the news” “I already know what is going on without having to read the paper—repetition is boring, plus the news can be depressing.”
  • 34. 33 How to drive regularity and avoid overload? News briefings?
  • 36. Testing Newsletter Hypothesis • We have data from one news site on who subscribes to newsletters • Newsletters that drive retention: “Now,” “Things to do,” “Breaking News” • Newsletters with no effect on retention: Sports, Business, Politics, Local News • Newsletters that drive churn: Entertainment • Conclusion: newsletters (especially local) can drive retention, but must be tested 35
  • 37. Summary of findings • In all 16 markets, – Regularity of reading consistently drives retention – Reading local (differentiated) content drives retention and regularity, but the most powerful content varies across market: • Local sports coverage matters more in some markets than others • Local entertainment and food important in some markets, but not others • In our 12 smaller markets, – Reading national news drives retention and habit, but less so in large markets. – Paywall and error pages drive churn—fix the user experience • Subscribing to updates and newsletters can drive retention • Effects of device (mobile vs. PC) vary across markets • Use of ad blockers reduces the positive association between page views and churn in the one market
  • 38. Implication • Make sure consumers derive value regularly – Understand your value proposition – Email updates and newsletters are an obvious way to drive regularity, but they should be tested • Pay attention to the user experience. • Drivers of churn – Test effects of advertising – Test effects of commoditized vs. local content • Personalization seems to be unexplored by local news organizations, but must done with care so as not to create news bubbles 37