Beginners Guide to TikTok for Search - Rachel Pearson - We are Tilt __ Bright...
Folio-CDS-Global-White-Paper-2014-9-15
1. 1
Sponsored by:
MAGAZINES AND THE NEW
SUBSCRIPTION ECONOMY
Magazine Brands Capitalize
As a Model Gains Traction
The digital revolution, the rise of the Internet, the
proliferation of free content – all these forces of economic
disruption have required the print-magazine industry to
adapt, on the fly, amid predictions of imminent decline.
Or worse.
But in one sense it looks
like publishers may have
been ahead of their time. The
industry that pioneered the
subscription may look on with
some satisfaction at the birth of
“The Subscription Economy.”
That’s the popular shorthand
reference to the trend of ever
more products and services
being sold on a subscription
basis. A model that never
had much practical relevance
outside the periodicals industry
is finding favor as a smarter way
to sell a range of goods, from
movies, music and books, to
food, clothing and software.
In “Building a Strategy for
the Subscription Economy,”
Gartner analyst Chris Fletcher
in 2011 defined the term as “a
market reaction to a growing
Subscription Economy Action Items
A renaissance may be at hand for magazine subscriptions. While
many product and service marketers learn from the ground up
how to sell by subscription, publishers are re-learning how to do
it better. The goal: retain subscribers, improve their experience
and generate more revenue from them. To thrive in their own
reborn “Subscription Economy,” publishers can begin by
focusing on these things.
• Thinking more like a brand. Publishers should build out an
array of assets that can be offered as part of a total brand
experience. Merchandise offers, tickets to events, value-
added content packages and other perks can be added to
subscriptions to enhance their value to the subscriber.
• Gathering more and better data. Data is becoming the
backbone of better efforts to slice and dice subscribers
and understand their behaviors. The tools to understand
exactly how individual subscribers are consuming content
and engaging with the brand are now available. And it’s
essential to crafting targeted renewal and subscription
enhancement offers.
• Crafting more valuable content. Content that’s incisive,
meaningful, and actionable, and not readily found
elsewhere, is essential to enhancing the subscriber’s
experience and cultivating loyalty. Adopt a mindset that
the subscriber is the only true customer.
• Broadening engagement opportunities. Expanding the
platforms on which subscribers can consume content – and
the ease with which they access it – is essential to relevancy
as consumers become more mobile.
• Managing subscriptions better. In moving to a
subscription model that seeks to cater to individual
subscriber differences and the crafting of tailored
offers, publishers must have highly capable subscription
management systems in place.
• Being more proactive. By increasing the frequency and
quality of communications with subscribers, publishers
can position themselves to keep customers in the fold and
broadening their engagement with the brand.
• Transitioning from paper billing. The shift to plastic with
recurring billing is key.
September 2014
Inside:
(continued on page 3)
Business Challenges
of Subscription
Management
The potential challenges
involved in subscription
business models include:
• Address concerns with
intellectual property
protection, licensing,
access, control and
dynamic fulfillment.
• Control customer churn.
• Ensure customer loyalty.
• Manage delinquent and
nonpaying customers,
and a higher volume of
payment transactions.
• Maintain privacy and
security of customers’
data, transactions and
payments.
Source: Gartner, Building
a Strategy for the
Subscription Economy,
April 2011
One Company’s Strategy
to Boost Subs: Raise
the Price 2
ESPN Leverages “TV
Everywhere” Model With Mobile
Subscription Offering 4
Increasing a Sub
Price From $12.99
to $199, Successfully 5
Meredith Converts 800 Points
of Data Into a Subscription
Powerhouse 2
2. 2 SPONSORED BY:MAGAZINES AND THE NEW SUBSCRIPTION ECONOMY
Rising interest in subscription-
based commerce and the modern
consumer’s penchant for mobility,
choice and free agency isn’t
easily reconciled.
But Meredith Corporation, publisher
of titles like Better Homes & Gardens,
Family Circle and Fitness, is making
pioneering strides. The Iowa-based
company believes a fuller slate of
carefully crafted offers, options and
more suggestive selling designed to
attract and retain subscribers is a key.
Meredith rolled out a new entitlement system earlier this year
designed to be more responsive and dynamic, allowing a variety
of bundling and price options. The platform is driving Meredith’s
efforts to build stronger engagement, lifetime value and
retention with new and existing subscribers, says vice president of
consumer marketing Janet Donnelly. “We have been integrating
our online data with our consumer database to have a 360
view of our consumer to target, model and market at the right
time, right channel with the right offer,” she says. “Our platform
is a foundation for improving the subscriber experience and
generating incremental revenue.”
Meredith is paying close attention to what channels subscribers
use to engage with online products. As more mobile device-
optimized content is developed as part of a “one-login/one-sub/
many access points” strategy, offers can be tailored and directed
to heavy users of that channel. Offline efforts to keep subscribers
are evolving as well. Direct mail pitches are growing more
sophisticated as the company is better able to identify who is
more likely to respond through that channel.
And data, more of it and better crunched, lies at the heart of
the Meredith effort. The ultimate goal: formulating packages of
highly targeted offerings that give subscribers every reason – and
the easy opportunity – to deepen, broaden and extend their
interaction with Meredith brands.
“Instead of presenting product offers based on historic models
and views of customers we’re now integrating active behaviors
and actions that are being taken in real time on our sites,”
says Donnelly.
Under the traditional model of customer retention, for instance,
the approach might entail flooding a subscriber with one-size-fits-
all offers to renew. Now, says Donnelly, “if we know that someone
signed up for a food newsletter, we know they have a food affinity,
and if they’re on our website through a mobile browser, we know
they have a digital propensity. So we think maybe we should
present an Every Day With Rachel Ray digital edition.”
The well-honed Meredith strategy involves transitioning
its audience of 115 million across 21 brands as their life
circumstances and interests evolve. Now, with a deeper dive into
data on subscriber behaviors, interests and values, Meredith is
taking execution to a new level.
Meredith analysts comb through real-time information generated
from watching how the audience engages with the brand digitally.
Information gleaned from 800 distinct data points – up from
400 five years ago – is dissected to help stitch together highly
targeted and personalized offers. That information helps dictate
multiple variables, from the timing and structure of offers to how
they’re presented and priced.
“We’re able to target, in real time, a consumer coming to
our websites and deliver a relevant offer for a product or
subscription,” Donnelly says. “We’re also integrating our online
data with our offline data and using this in our modeling.”
Offers can take the form of something as simple as more creative
bundling. For example, Meredith was able to raise the price on
American Patchwork & Quilting to $49 by simply incorporating full
access to the online version.
Or it can mean building out a title
to reflect what subscribers value.
Allrecipes.com, long a digital-only
title, now has a print version after
research pointed to some interest.
Launched last year with a 500,000
ratebase, it is expected to hit
1.1 million with the February 2015
issue. That title also has offered
coupons for cooking supplies;
developed special “pro access”
memberships that deliver some
special online-only features; and
staged cooking school events.
The new push to solidify the subscriber base using the very latest
data-driven engagement and promotional techniques seems to
be paying off for Meredith. Retention is in the high double digits,
and cross-promotion efforts continue to bear fruit in the form of
transitioning subscribers to other titles, Donnelly says.
C30+
ways to cook
SMARTER,
FASTER,
CHEAPER
▲
A new kind of food magazine from the world’s largest food community
11 MILLION MEMBERS
& COUNTING!
®
®
★ ★ ★ ★ ★
top-rated recipes
for the season’s
freshest flavors
Putsummer
inajar!
MEAL
PLANNING=
less stress,
MORE FREE TIME
STATE FAIR FAVORITES
made at home
(funnel cake, anyone?)
AUGUST/SEPTEMBER 2014
Meredith’s Janet Donnelly
range of media and technology products that can be
delivered digitally to devices ranging from tablets to
smartphones and mobile devices.”
By 2015, Gartner predicted, more than a third of Global
2000 companies selling non-media digital products would
be generating incremental revenue through subscription-
based services and revenue models on the order of 5 to
10 percent.
In turn, more thoughtful approaches to selling by
subscription were needed. Thus, managing fulfillment,
entitlement, billing, renewal and customer loyalty
oversight would transition to “software-as-a-service”
(SaaS) and hosted subscription management services.
Within three years, more than 40 percent selling media
and digital products like software, services and content
would be relying entirely on SaaS or hosted services to
handle the complexities that subscriptions present.
But the Gartner report also said many companies
weren’t going to be ready. More than half of companies
offering subscription-based extensions to their products
Meredith Converts 800 Points of Data Into a Subscription Powerhouse
(continued on next page)
3. 3 SPONSORED BY:MAGAZINES AND THE NEW SUBSCRIPTION ECONOMY
Business Model Gains Traction (continued from page 2)
August Home’s Don Peschke
Less-than-projected direct mail performance combined with the need to increase revenue-per-subscription in January led August
Home Publishing to place a counterintuitive bet: that a price increase would fix the problem. By one early measure, the wager has paid
off handsomely.
The lure for getting existing Cuisine and Garden Gate subscribers to pay $29 for annual subscriptions – up from $24 and the only
choice – was a special edition available only to renewing subscribers. Returning customers now get a bi-monthly magazine with heavier
paper stock; perfect-binding instead of saddle stitching; and a 16-page insert with special editorial content.
“We had projected about 32 percent of a group in our early renewal file would go for this, and we
got about 64 percent,” says Don Peschke, founder and CEO of the Des Moines, Iowa publisher of five
subscription-only magazines in the woodworking, home and garden spaces. “The response was far better
than we ever expected.”
The company determined that the two titles’ subscription revenue stream couldn’t be shored up by
lowering the price and waiting for the numbers to improve. But by raising the price, Peschke figured he’d
have to sweeten the deal.
The key was recognition that in a subscription economy, flexibility and creativity have become critical.
Longtime subscribers, Peschke points out, self-identify as “members” of the magazines, which cater to
topical enthusiasts and connoisseurs. That led to asking, “What would a magazine look like if it were a
members edition instead of a magazine?”
A better physical quality to the magazines conveys keepsake value. The insert’s content also has “bonus”
qualities that revolve around timeliness and uniqueness. In the case of Cuisine, for instance, there’s a heavy
focus on seasonal foods and recipes.
Combined, the features of the new subscription should resonate with much of the subscriber base, Peschke says. One telltale sign is
that two-year renewals surged well beyond normal, accounting for 80 percent of the new subscriptions sold in the first round of
renewal offers.
“People like the idea of a membership, they feel like they are members already,” he says. “They’re collectors as well, they tend to think
of this as an archive of information they don’t want to give up. So if you play to that and make the magazine of higher quality that feels
like even more of something you want to keep, they will respond to that.”
One Company’s Strategy to Boost Subs: Raise the Price
would be using packaged management applications
lacking sufficient subscription management support
capabilities. Without proper management processes in
place, companies risk higher customer churn; the inability
to manage delinquent and non-paying customers;
challenges in ensuring the privacy and security of
customer data, transactions and payments; and losing
customer loyalty.
It’s unclear whether those predictions are on track,
but Gartner looks to be right in one respect: that a
“subscription economy” would emerge and would require
fresh thinking.
That’s evident when looking at how publishers
themselves are wrangling with how to dust off the
subscription model. They’re taking lessons from what
non-media companies are doing and exploring how to
put a 21st century spin on their subscriptions. Publishers
like Meredith Corp. are keenly focused on assembling
and marketing assets within and across titles. “We’ve
known for years that adding assets adds value,” says
Meredith consumer marketing director, Melissa Gruener.
“Now we’re exploring how adding various combinations
of assets can really add that value and integrating more
digital propositions into that mix.”
A retooling opportunity is at hand. Today, a subscription
must be about more than dutifully delivering an issue. But
many publishers struggle with how to think differently.
“At one level we’ve sort of self-imposed some
constraints, in that we’ve offered only one product – a
magazine subscription – and priced it in a very narrow
band,” says John Loughlin, EVP and general manager for
Hearst Magazines. “We have audiences that are much,
much more varied in terms of their engagement.”
Some see a growing receptiveness among media
consumers to the idea of forming closer connections
with publications. Don Peschke, the CEO of Des Moines,
Iowa-based August Home Publishing, which has a stable
of special-interest publications and is working to create a
(continued on next page)
4. 4 SPONSORED BY:MAGAZINES AND THE NEW SUBSCRIPTION ECONOMY
ESPN Leverages “TV Everywhere”
Model With Mobile Sub Offering
ESPN, a network that helped build the subscriber-based cable television
model, is casting its sights beyond traditional broadcasting in a bid to better
meet changing viewer expectations for programming.
The sports behemoth has begun moving more aggressively to deliver
online video, rolling out the WatchESPN app that provides access to regular
televised content and special, Internet-only programming.
Introduced in 2011, WatchESPN targets the growing ranks of those who want
to access programming via mobile devices.
The app is available to credentialed subscribers to cable systems that carry
ESPN, delivering streaming on-demand video of live programming and
events that air on more than a dozen channels on the ESPN broadcast
platform. As of 2013, WatchESPN is also available through AT&T U-verse and
the National Rural Telecommunications Cooperative.
The channels available on WatchESPN are based on the service provider’s
ESPN package. The app also serves as a platform for the online-only channel,
ESPN 3, which carries feeds of second-tier sporting events. It is available
to non-participating TV-provider customers as long as they subscribe to a
participating high-speed ISP.
Those who don’t subscribe to an ESPN-affiliated video provider are
also gaining more access to ESPN content. Users of Apple TV, Google
Chromecast, Roku and Android mobile devices can access ESPN.com video-
on-demand clips only.
“We’re seeing a lot of use on these devices because users really like the
interface and the way content is served on these apps,” says Amy Phillips,
senior director of communications for the network. ESPN launched its online
service primarily as a way to address rapidly changing content-consumption
habits, reflected partly in sliding pay-TV subscriptions and the growing
popularity of online video.
“There’s no question that the subscription model is building more and
more steam in the television/media industry, from both a financial and critical
point of view,” notes Robbie Caploe, editorial director of Cynopsis Media.“
One only has to look at the lightning success of streaming services from
Netflix and Hulu Plus in recent years to see
that companies are eyeing and loving this
model, which is impervious to the cycles of
the advertising market.”
Adds Phillips, “We’re interested in serving sports
fans wherever and however they want to gain
access to ESPN. In offering a product that you
can stream through an app and access from the
linear TV side, we see this as a huge value add to a
viewer’s overall cable subscription.”
Should enough subscribers concur, the WatchESPN
service could end up helping stem the flow of
subscribers from the network and pay-TV providers.
According to Nielsen, between September 2011 and September 2013, ESPN
shed some 1.5 million subscribers who either cancelled pay-TV or switched
to packages that didn’t carry the network. That’s noteworthy, but still only a
fraction of the 98-million homes that have access to ESPN.
On one level, the WatchESPN initiative could be interpreted as a desire
on the part of ESPN to position itself for a future that could produce a
very different content distribution model, one more heavily geared to
Internet delivery of content. For now, though, the network insists it’s about
broadening viewer access to ESPN content through existing distribution
channels. “We have always believed in the idea of the best available screen,
that fans will watch on the best screen they have available to them,”
Phillips says.
Business Model Gains Traction (continued from page 3)
(continued on next page)
membership mentality among subscribers,
senses a rising hunger for deeper knowledge
and context. “It’s a little bit in contrast to the
Internet, where it’s very ephemeral and you
don’t pay for anything.”
Publishers are looking to data to better
grasp what subscribers want. Strategies
to retool the subscription are producing
a variety of new hybrids. They reflect the
diverse character and nature of publishing
companies and their audiences. But today’s
trendsetting subscription models share some
fundamental characteristics, notably:
Content access flexibility. To be relevant
and marketable, a paid-media subscription
must offer multiple avenues for easy
engagement. Content must be deliverable
and readily consumable across multiple
digital platforms – optimized for the desktop,
the tablet and other mobile devices. And
print is still very much in the mix. Content
must be diverse, from the printed word
through to digital audio and video.
Personalization. Today’s subscription must
account for individual differences and permit
choice. Duration, pricing, components,
accessibility, premiums, levels, and trial
offers must be flexible. With expanding
capabilities to know which subscribers are
heavy users and where they’re going when
they’re on a site, publishers can come up
with closer matches of prospective revenue-
generating offers.
A data-informed structure. To keep
subscribers in the fold and new prospects
in the mix, publishers must act on hard
knowledge. Meredith, for one, has adapted
well, partly because a quest for deep
knowledge has underpinned its build-out
of a stable of titles with broad, overlapping
and continuous appeal to women as their
5. 5 SPONSORED BY:MAGAZINES AND THE NEW SUBSCRIPTION ECONOMY
Increasing a Sub Price From $12.99 to $199, Successfully
Few magazines could convince subscribers paying $12.99 a year to suddenly start paying $30, or for that
matter, $199. But opportunity exists in the subscription economy, if you look at things in the right way.
Which is what O, the Oprah Magazine, did when it launched a value-add subscription initiative that took
rates – and the subscriber experience – to new levels.
It’s O’s fiercely loyal and committed audience of some 2.4 million that led Hearst Magazines in July to
roll out the service, which has three tiers. Those who buy in become members of the new O’s Circle
of Friends and get much more than a magazine. Whether they become members of O Plus, at $39
annually, O Premium at $99, or O Premier at $199, subscribers buy a slate of perks that deliver a more
intimate, fully featured and potentially money-saving experience with the title.
The initiative was conceived as a way to begin to better monetize proven affinity. Management
concluded that there was an untapped opportunity to better connect with a subscriber base that has an
industry leading renewal and tenure rate.
More importantly, says John Loughlin, executive vice president and
general manager of Hearst Magazines, O subscribers are “also willing to pay a premium for a
premium product,” and are likely receptive to “a range of experiences and engagements that go
beyond just the magazine.”
The result was a blend of products, services, entitlements and engagement opportunities
allocated across the three tiers. Basic tier add-ons span full digital edition access, a gift
subscription, advance notice of O special events, an e-newsletter and easy sweepstakes entry.
The middle tier adds in a second gift subscription and a keepsake box of luxury beauty items.
The $199 level tacks on a personalized birthday card from Oprah, a surprise gift from the O list
and product “test and keep” opportunities.
Hearst sees the program attracting 100,000 people over the course of three years. The program is
off to a good start. As of early August, some 1,000 had signed up within the first week to 10 days of
the rollout, and most, surprisingly, were at the premier level.
“We think this will provide a good example of how you take a highly engaged audience and
serve them on a dimension that goes beyond just the magazine, and in a way that’s economically
beneficial,” Loughlin says.
Hearst’s John Loughlin
Adoption Cycles
Adoption of subscription management falls into three categories:
Type A: Industries with products
that are subscription-based and
dependent. Majority of revenue is
subscription-based.
Communication (mobile devices,
phones, cable and satellite
TV, Internet service providers);
media (publishing, newspapers,
music, movies); software (SaaS
applications, some data content).
Adoption level: Deep adoption
and use of subscription
management, but majority of
company revenue still comes from
purchased or licensed products.
Subscription management
is mostly based on internal
developed solutions.
Type B: Type A markets
evolving from purchase/license
models to broader adoption
of subscription products and
services. Minority of revenue is
subscription-based.
Media (publishing, newspapers,
music, movies); software (SaaS
applications, app stores;
application data/content).
Adoption level: Deeper use
of subscription models and
subscription management
applications/services. Minority
of revenue is subscription-
based, but growing strategically.
Incremental revenue generated
through subscription-based
services, and value-adds.
Type C: Industries developing
new revenue streams through
subscription-based services that
augment mainstream, digital
or physical products.
Technology, life sciences,
industrial and line-of-business
products that will expand
the customer experience via
subscription-based purchases and
usage models.
Adoption level: Little/no
current adoption, but strategy
development occurring in
some companies.
Source: Gartner, Building a Strategy for the Subscription Economy, April 2011
6. 6 SPONSORED BY:MAGAZINES AND THE NEW SUBSCRIPTION ECONOMY
Business Model Gains Traction (continued from page 5)
Industry Vertical Example Scenario Example Companies
Retail Online retailers increasingly offer consumable
products to consumers via monthly or quarterly
subscriptions programs.
Wal-Mart, H-Bloom,Trunk Club, Coastal Contacts,
Shavenu, BirchBox
Publishing Newspaper and magazine publishers offer
both the print and digital editions through
subscription-based plans.
The Wall Street Journal, Financial Times, Condé Nast
Media and Content Consumers pay monthly subscription fees to
access premium online content.
Club Penguin, Vimeo, NASCAR, NFL, GigaOM, IGN
Entertainment
Online Video Streaming video services offer access to film
and TV content on a paid subscription basis.
Netflix, Hulu, Vudu, Lovelm, BBC iPlayer
Music Streaming music services offer premium
subscription-based access to streaming music
content.
Pandora, Rhapsody, Spotify, Napster, Grooveshark, Sirius
XM
Transportation Car-sharing services use monthly subscription
plans to provide consumers with access to
vehicles.
Zipcar, Car2Go, OnStar, AAA
Software/SaaS Subscriptions are core to the business model of
most software companies, especially those with
SaaS products.
Evernote, Box, Yammer, Symantec, Adobe, Corel, Intuit,
YouSendIt, Microsoft
Telecom Telecom firms typically bill customers for voice
and other services via post-pay/usage-based
subscriptions.
Skype, Verizon, AT&T, Vonage, Twilio
Gaming Subscription-based gaming has taken off both
on the PC with hits like World of Warcraft and
games on mobile platforms.
OnLive, GameTanium, GameTap, Electronic Arts, World
of Warcraft
Online Dating Most of the leading online dating services
charge a monthly subscription to match
potential candidates.
eHarmony, Lavalife, Match.com, Plenty of Fish,
SpeedDate.com
Real Estate Real estate professionals typically pay monthly
subscriptions to list their properties and services
online.
Bigger Pockets, Trulia, Zillow, HomeFinder.com, Zoo
Property
Consumer and
Business Services
Consumers and businesses pay monthly
subscription fees to access government and
commercial data services.
Experian, Square Trade, LocalGov.co.uk
Platform-as-a-Service Platform-as-a-service vendors rent access
to their services via post-pay/usage-based
subscriptions.
salesforce.com, Microsoft, Openstack, Gigaspaces
Subscription Business Models Are Widely Adopted Across A Diverse Set Of Industries
Source: Forrester, Market Overview: Subscription And Recurring Billing Solutions 2012, December 2012
life situations change. “Meredith is a data-rich company,”
says Janet Donnelly, vice president of consumer marketing.
“That’s helped us work to present the right title to the right
customer on the right format.”
Brand orientation. In marketing subscriptions, innovative
publishers are seizing the chance to position them as
privileged, paywall-protected gateways to a fuller and richer
experience of engagement, learning and sharing available
exclusively to members.
Proactivity. Subscriptions are communication pacts
that seek to foster interaction for the duration of the term
and even beyond. By making subscriptions more dynamic,
publishers are better positioned to capture new revenue and
generate priceless user data.
A common thread connects these and other elements
that define the changing media subscription model. Tease
it out and it reveals an orientation to selling a total brand
experience, not just a mere product. It’s an approach uniquely
suited to an industry that, at its core, is about using its assets
to foster a sense of community, shared interests
and engagement.