October 14, 2014 Last Updated 12:24 pm

Deal with the devil: publishers find that monthly option drives digital subscriptions, then tends to degrade them, as well

Low monthly subscriptions lure in readers who like the discounted price, but keeping those readers is proving difficult for many titles

One of the first choices a publisher must make when launching their new digital editions (or digital-only magazines) involves pricing. How much to charge for an annual subscription, single issues, and whether to also offer monthly subscriptions (or other price levels). Publishers have found that while they can price their single issues near their print cover prices, introducing a monthly subscription price drives sales.

GQ-prices-digitalA typical digital magazine may offer a single edition for $2.99 or $4.99, but then charge a monthly subscription price of $1.99. Condé Nast’s magazines are a great example: single issues are $4.99, annual subscriptions are $19.99. It makes sense to buy that annual subscription as a reader saves near $40.

But these magazines also offers a monthly subscription price of $1.99. That is hugely attractive, especially if the reader really only wants that most current issue. They save three bucks and then can quickly cancel their subscription.

Most publishers, until recently, have felt that it was worth the risk. $4.99 is probably more a disincentive to buy a digital edition (many readers don’t mind the price for print, but think digital should be discounted). But $1.99 drives sales… for a while.

As Glenn Fleishman, publisher of The Magazine, has pointed out, Apple’s push notifications are not a publisher’s friend. Every month, readers who have signed up for a monthly subscription are sent out a push notification reminding them they are about to be dinged for another $1.99. It’s a very friendly iOS feature, and one that device owner no doubt appreciate. But for publishers, it means that it is another opportunity for a reader to cancel that subscription.

What makes this unfair is that the publisher probably has one chance to sell that reader, but the reader has many chances to change their minds. The burden in on the publisher to make sure that reader is satisfied with their decision, which is fair, when you think about it. But it does encourage cancellations. Push notifications, along with the weaknesses of the Newsstand, have proved a deadly combination for some titles.

“Apple’s disinterest in the Newsstand didn’t doom The Magazine,” Fleishman told Cult of Mac, “but it certainly meant that people who were already subscribers forgot it existed, and contributed to the drop in subscriptions.” (I’ve used that quote a few times already!)

For new digital-only magazines, another issue involves the decision to offer an annual subscription. While legitimate publishers wonder whether they should charge for 12 months when they haven’t even produced a year’s worth of issues yet, less scrupulous publishers have no problem with it – they want those annual subscription to come in, whether they ever produce a second issue or not.

We all know that great content and good marketing will drive readership – and one could honestly argue that a reader has every right to cancel their subscriptions, especially monthly ones, whenever they like.

But many publishers are rethinking whether offering monthly subscriptions is a good idea. But the monthly subscription is, like the Newsstand itself, a bit of a deal with the devil. One discovers it is hard to go back. (An app can not be moved out of the Newsstand, once there they only way to exit is to kill off the app and launch another.)

For a publisher with more than a few monthly subscribers, to kill off the monthly offer means losing those readers. For a title with only a handful of readers this isn’t a hardship – but if, after only a few months, that publisher has only attracted a handful of readers they may already be thinking of shuttering their title. But for the print publisher, with over 10K in digital subscriptions, they may feel stuck. Killing off the monthly option may cause a dip in their audit numbers. This has been seen in a couple titles that had app issues for a few months. Annual subscribers likely stuck with the title, but monthly subscribers were reminded that they could cancel. How many called the publisher to request a refund or an extension of their subscription is hard to tell, but those that called would likely be the most loyal of the magazine’s readers. Others simply canceled and were never heard from again.

(With the release of iOS 8 there are a number of titles struggling with bugs. The New Yorker Magazine, for instance, is now getting trashed by readers inside iTunes for problems that have arisen since the iOS 8 update issued on September 15. Of the 47 ratings received since the update 36 are 1-star. Many of these readers, if they subscribe month to month, might be lost if an app update does not get issued soon.)

The next batch of publisher’s statements will be a real test for many circulation managers. While some publishers have told me they blame Apple’s lack of promotion and maintenance of the Newsstand for problems with digital sales, the monthly subscription option might also be influencing sales, as well.

  • Dave Ball 3 years ago

    Yes, a publisher risks fall-off from month-to-month subscriptions. But you also need to look at the initial response rates for the two offers. Let’s assume that 50% of month-by-month subscribers are gone by the end of the first year. If that offer gets more than twice the uptake compared to the annual rate, the publisher comes out ahead. When consumers look at $19.99 vs. $1.99, it’s not hard to believe that the publisher gets more than twice the number of subscribers by offering the lower price.