New INFORMS Journal Management Science Study Key Takeaways:
CATONSVILLE, MD, October 18, 2021 – In a world where false news spreads easily and rapidly, and institutional trust is declining, the imperative for local newspapers to serve as reliable sources of news is more important than ever. Like any business, however, finding strong and sustainable revenue is foundational to their mission. For news organizations, subscription revenue is increasingly important to newspapers as advertising revenue continues to decline. Paywalls can increase subscription revenue by helping newspapers not only acquire new subscribers but also retain existing ones. New research in the INFORMS journal Management Science shows that newspapers’ strategy of offering subscribers free access to digital content increases subscriber retention and boosts revenue by as much as 7-12%.
The study, “Spillovers from Online Engagement: How a Newspaper Subscriber’s Activation of Digital Paywall Access Affects Her Retention and Subscription Revenue,” comes at a time when newspapers are struggling to retain subscribers. This research sheds light on an effective way to retain print subscribers and highlights the benefits for newspapers of investing in exclusive, high-quality digital content.
The authors, Adithya Pattabhiramaiah, Eric Overby and Lizhen Xu of the Georgia Institute of Technology, found that newspaper subscribers who activate access to paywalled content are less likely to cancel their subscriptions and contribute to higher subscription revenues, to the tune of 7-12%.
“Effective digital engagement is one of the highest priorities for newspapers’ long-term sustainability and survival. This research shows that most subscribers who actively engage with the newspaper’s digital edition end up also retaining their print subscription,” says Xu, an associate professor in the Scheller College of Business at Georgia Tech. “Granting paying subscribers free/subsidized access to complementary digital products can indeed be an economically viable strategy for traditional omnichannel firms looking to expand their digital footprint.”
About INFORMS and Management Science
Management Science is a premier peer-reviewed scholarly marketing journal focused on research using quantitative approaches to study all aspects of management in companies and organizations. It is published by INFORMS, the leading international association for operations research and analytics professionals. More information is available at www.informs.org or @informs .
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Contact:
Ashley Smith
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Management Science
Data/statistical analysis
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Spillovers from Online Engagement: How a Newspaper Subscriber’s Activation of Digital Paywall Access Affects Her Retention and Subscription Revenue