When News24 put up a paywall last year it marked the first bold step in the revenue diversification journey of South Africa’s largest news website. The flagship site of media giant Media24 had immediate success, landing 15,000 subscribers in the first month.
Two of the driving forces behind the impressive numbers are TinaShe Makwande, Subscriptions Business Expert, and Gareth Lloyd, Head of Research and Analytics at News24, who, at the D2C Summit, talked about the painstaking way the paywall was put together.
“It has always been about building a sustainable media business,” said Makwande. “For Media24 it’s very important that we are seen championing democracy within the country and to do that we know we need to deliver a news product that is valuable to our readers and has the best quality journalism that we can find.
“That is what led us to conversations about a paywall and how we build a sustainable business that ensures we continue the legacy that we started and we can continue fostering democracy inside the country.
“The conversation was taking place across all levels of business. Our board asked us about subscriptions and our top management was talking about subscriptions. A lot of the research that we conducted was done at an operational level and fed upwards. The conversation was quite seamless and friction free.”
Choosing the right paywall
According to Makwande, News24 decided on a fremium subscription model because it allowed the company to continue its advertising business without harming the subscription business, and vice versa.
“We have been able to retain our advertising revenue throughout the process,” he said. “We measured the risk of how much content we could reasonably lock and offer it to our paying subscribers. That research allowed us to make decisions that were very well informed by data that we had – historical data and how we projected our growth would take place.
“Our advertisers are as happy if not happier now than they were two years ago before we launched. We still perform very well when it comes to our ad campaigns and we have no issues arising from the subscription business. It is working really well in unison. It’s the perfect model.
“We do know from other paywalls that every two and a half years there is a change so we are not averse to that. We know there is quite a nice move to dynamic paywalls, which is as user-centric as a fremim model and something we will be considering in the near future.”
Putting in the proper research
Before putting up a paywall, News24 did their homework. “It took about two years of research that went into a final value proposition and go-to market offer,” said Lloyd. “It was a huge opportunity for the data team to really become imbedded in the company by giving the business key data from which we can make these decisions.”
The research started with a couple of main projects – consumer surveys that reached out to as many users as possible, recruiting them from the sites and email databases to fill in surveys. News24 did this in different phases. The first one was a top-level speculation with very broad questions about people’s perceptions towards paying for digital advertising.
Lloyd and his team then went through a number of consumer surveys along with secondary research that really focused on News24’s most loyal users.
“We came up with the super-user research programme,” he said. “What that was doing was shifting to analytics to look at our entire user base and try and figure out who our super-users were. The previous research was telling us these are the users that had the highest propensity to subscribe – who they were, what they were looking for.
“And then we went into real detail into what the value proposition should look like and that refinement was the last step where all of that stuff was informing what we effectively should start shaping. That’s when we started throwing around things like: Which of these features would you like, or find more appealing? – very basic stuff. That was followed by some very advanced conjoint models right at the end when we threw in some pricepoints.”
News24 decided to go for one single offering at one pricepoint after what Lloyd describes as “a really long debate”.
“Our balancing act was to find the single price points that would appeal to the high propensity users and those who had a lower propensity but still consideration to purchase,” he expained. “The research paved the way for the initial offer which was affectively the value proposition that had the highest utility scores across all of the features and all of the content pillars.
“Further down the line we will look at what the higher tier offers are that are available which could potentially be launched later on. What we found with the distribution and the data is that there is a definite opportunity for higher tier offers with additional types of features or perhaps even memberships-style style offerings. We found a willingness to pay at higher price points.”
What the readers want
What all the consumer research clearly showed was that the most important thing to users weren’t fancy features or game-changing tech innovations, but the world-class content News24 was famous for.
“What we found when we did the super-user research was that the super-users over-indexing on certain content. From a consumption point of view it was investigative journalism, which included opinions, investigative journalism and company deep dives,” said Lloyd.
“It really gave us an indication as to what we should start really putting our editorial efforts towards and, post-launch, it’s become something that’s up-weighted in our value propositions. And now we are up-weighting more because it is such a heavy acquisition driver and it retains our current base really well.”
Investing in news journalism
The results of the paywall research have prompted News24 to invest even more in journalism, in particular investigative reporting.
“We knew we had to invest in highly experienced talent within investigations and we grew the team,” said Makwande. “All our journalists and editors have subscribers in mind and they put it at the centre of their work. Without that very rich content and the journalism that we are so very proud of we wouldn’t have the solid value proposition we have today.”
Adding to the subscriber experience is a text-to-speech tool kit that allows readers to listen to content on the go. “We weren’t happy with a generic robotic voice that you can buy off the shelf because it wouldn’t really pronounce our names, locations and company names accurately,” added Makwande.
“So we invested in a voiceover artist and partnered with a local tech company that customised a very local voice that allows us to use a South African voice to offer South African news we are offering to South African readers.”
News24 also brought back the comments section, which it axed several years ago, as part of the subscription offer.
“We removed the comments from our site because it wasn’t doing what we stood for and it didn’t align with our principles,” Makwande pointed out. “When we launched the subscription business we realised that we could bring in capacity because there are now smarter ways to moderate comments.
“We can moderate comments and allow our readers to start engaging again by using AI that predetermines whether content meets our policies and guidelines around commenting. If it doesn’t, it highlights it for the moderators who then either remove it or see what the nuance is and if it needs to be accepted.”
News 24 works as hard to keep subscribers as it does to get them in the first place.
“The churn journey starts doesn’t start when the user cancels, it starts when there is a slowdown in engagement,” said Makwande. “When we see the decrease in the engagement score (e-score) we them find ways to re-engage with users.
“One of the ways we know someone is about to churn is when they reach out to our call centre and issue some sort of complaint that speaks to their experience as a reader.
“This is of real benefit because it gives us really clear indications of what you are unhappy about and gives us a chance to correct ourselves, solve their problem and try and prevent them from taking that last step.”