D2C Summit: Nicholas Thompson on why The Atlantic and a metered paywall is a match made in heaven

Few media executives have a better grasp of what makes an effective paywall than Nicholas Thompson. Having worked on successful subscription strategies as the editor of newyorker.com and Wired, he has now turned his attention to The Atlantic. As the magazine’s recently-appointed CEO, Thompson is building on a fantastic growth trajectory that has seen one of the world’s oldest media brands pulling in 450,000 digital subscribers since putting up a paywall in 2019.

“The Atlantic getting a paywall is like when you see two people and say they should get married – it was just very natural,” he told FIPP CEO James Hewes at the FIPP D2C Summit. “Editor Jeffrey Goldberg’s editorial philosophy has very much been long, high quality stories, edited and fact-checked. He was definitely going in the direction of the kinds of brands that support themselves with paywalls.

“What is happening in American journalism is that you can support yourself through mass publishing, maybe go the direction of a BuzzFeed and try and support yourself by just churning out tonnes of stuff and doing serious reporting as well as goofy lists. But if you are going to go in the direction of all you do is high quality stuff, then you pretty much need a paywall.”

The question, said Thompson, was not why The Atlantic got a paywall but why it took so long.

“I wasn’t at The Atlantic for those conversations but it was a lively, lively debate,” he revealed. “The Atlantic was maybe trapped by all the success that it had with its digital website. It had been much more successful earlier on in creating a very vibrant website with active blogs and daily content, so putting a paywall around it actually had a higher cost.

“So it took longer for The Atlantic to take this necessary step. Thank goodness they did take that step in 2019 because it has been hugely successful and one of the reasons we have a bright financial future, is because of it.”

Good news for advertisers

The Atlantic’s success over the last 18 months shows that having a paywall doesn’t have to negatively affect advertising revenue. According to Thompson it all comes down to the tradeoffs you make.

“If you set your paywall where you can read two articles but you can’t read a third, or at one, there will definitely be a trade-off,” he said. “The New Yorker started at six and our traffic went up because it is such a microscopic number, people hit the paywall.

“Then, if you can’t read a thing like with The Information you have a hard time launching an advertising business, but on the other hand they have a successful paywall business.

Going for a metered model has allowed The Atlantic to have an advertising business too. “The majority of your traffic will be people who, now that Google is driving traffic, come in and read one story in a month. They are going to have to search for something, they are going to click on it, and they are not even going to know that they are on The Atlantic.

“They are not really subscription prospects but they come to your site and are not confronted with a paywall. You run a bunch of ads so you can have a dual revenue stream.”

Once users are on the site, the next step is to get them to read a second article, get them into a newsletter or to sign up for social feeds, read another article and then to subscribe.

“What drives a subscription is pretty much exactly what the journalists want to do,” said Thompson. “The stories that generate the most subscriptions are the longest, deepest, most-read stories so aligning your editorial mission with your business prerogative is a wonderful place to be because it means to make more money you do the thing you want to do.”

In terms of pricing The Atlantic has three tiers – digital only, digital and print and premium which come with extra features.

“Most people get digital plus print and the price has been designed to draw the eye,” said Thompson, pointing out that the paywall has had positive effect on print circulation as well. “We had 350,000 subscribers prior to launching the digital paywall and we added 425,000 with the majority also going to print publications.”

Make good use of all your content

According to Thompson, it’s crucial to encourage people to read articles across a range of topics when trying to win subscribers.

“One of the interesting things I found at The New Yorker, Wired and The Atlantic is that you get subscribers when they read across different verticals not when they read with the same vertical,” he revealed. “If someone only reads your political coverage, they may be able to satisfy their political needs with some other publication that’s free.

“And If they only read your cultural coverage maybe they can satisfy their needs by going to The Cut. But if they read your political and cultural coverage they understand there is something about your aesthetic and how you write about the world. If they do that, they are more likely to subscribe.

“So if they read a science story we maybe want to get them to something outside the science vertical and then they will become more loyal to The Atlantic and subscribe. So we are constantly working to build and evolve those models so we can make the site more natural and constantly evolving.”

One of the reasons we have a bright financial future is because of the paywall.

Nick Thompson

To retain subscribers, Thompson stressed the importance of onboarding and using newsletters effectively.

“Onboarding is the start of the retention process and building a lasting, caring relationship,” he said. “You want the onboarding to be very smooth. You don’t want to ask them for information they feel awkward about and you want the flows to go quickly.

“You want to get them into the newsletters, send them a good welcome note written by the editor-in-chief and then you want to send them occasional newsletters reminding them that they are a subscriber and they should come and read all the good stuff we have on the site.

“We did analysis on the activities that are most likely to make someone subscribe and make them remain a subscriber and acts like clicking on a newsletter link rate very highly.”

While Thompson encouraged delegates to make good use of data when drawing up a subscription strategy, gut feeling should still play a role.

“Sometimes there are some decisions you just have to make on instinct even though data is potentially available because you have to make it more quickly,” he pointed out. “Sometimes with complicated decisions you need as much data as you can get, and sometimes you don’t have the data that’ll help you make exactly the right decision.

“I love data, I have a degree in economics, I competed in maths tournaments throughout my childhood, but I also know there are limitations.”

The Trump bump and Biden sliding

Like many publications, The Atlantic has benefited from being targeted by former US president Donald Trump, with his departure (and the arrival of the more prosaic Joe Biden) having an effect on subscription numbers.

“There is no question there was a Trump bump and now a Biden sliding,” he said. “There were a lot of people subscribing to The Atlantic during the presidential election when Donald Trump was denouncing us and there was a moment of solidarity to defend The Atlantic and defend America’s fourth estate.

“If you look at our reader and subscription numbers, the inauguration happened and they climb and then stabilise and then decline. I think that is true of every publication that covers politics. When Trump was president at least everyone was constantly stressed, reading the news and looking for information. Now that Biden is president nobody thinks about politics.”

Whether Trump is the White House or not, what continues to drive The Atlantic forward is its strong corporate culture – something that’s not changed with the arrival of new business model.

“At The Atlantic we talk about the spirit of generosity – we want people to treat each other kindly, respect ideas and push for their best ideas whether it’s in their journalism or a meeting about ad products,” said Thompson. “You can take the values we want at The Atlantic and they will be suitable for almost any business model.”

Aligning your editorial mission with your business prerogative is a wonderful place to be.

Nick Thompson

While Thompson believes the fact that the subscription business model has become dominant in certain types of American journalism is hugely healthy and creates the right corporate culture, he warned of dangers ahead.

“Two things are terrifying about the subscription model. Firstly, a world in which high quality information is expensive and bad information is free. That’s not a healthy ecosystem,” he said.

“The other thing I worried a lot about during Trump was, what if subscription models worked best if it was people reading the same story over and over again. With some publications you would read the opinion pieces and it was the same opinion every day, which seemed to be working and driving subscriptions.

“I would hope that what worked best with subscriptions is content across different categories and different types of stories. I hope that a few years from now the best way to drive subscriptions will be diverse, interesting cross-categorical storytelling.

“It just so happens that at this moment the highest quality journalism in the US is produced primarily, but not exclusively, by organisations where most of the reporters lean left. That could change. It’s not about politics but a question of high quality versus low quality. If subscriptions and paywalls are really the fundamental way to support high quality journalism you might have a democracy problem. That’s a worrisome outcome.”

Looking towards the future of subscriptions at The Atlantic, Thompson said it was about figuring out the next tier of offerings. “What can we give people that is more valuable than just access to our content? You can imagine a subscription offering that includes access to your podcast or video.

“We also have a whole mass of 30,000 undigitised archival articles dating back to 1857 and I also wonder whether we should do more print stories.”


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