Are publishers relying too heavily on subscription discounting?
The Reuters Institute’s annual Digital News Report typically prompts some sobering headlines for publishers, and this year was no exception. One was that 53% of consumers are willing to pay for news, which was seemingly interpreted by the report’s authors as bad news for publishers. Another was that 41% of consumers said they pay less than “full price” for their subscriptions.
“Heavy discounting persists” and “the tendency to offer discounts has resulted in a significant proportion of subscribers not paying full price,” the report said, which prompted headlines like “Remarkably few digital news subscribers pay full price.”
But is it really “remarkable” that 41% of news consumers are on discounted rates? What constitutes “heavy” discounting and what’s an acceptable level for a growing market? What does “full price” actually mean, and how do consumers know if they’re paying it or not?
There’s little meaningful data at this point to suggest that discounting for news publishers’ news subscription products is any more prevalent (or concerning) than it is in other industries. In the streaming video market, for example, 40% of subscribers paid less than full price in 2023, according to research firm Antenna. Research even found that just 16% of U.S. college students paid “sticker” price for college tuition in the 2019-20 school year.
The reality is most digital products and services are sold frequently at discounted rates, and “full” or “sticker” prices are often carefully selected with discounting in mind. That’s particularly true for subscription-based products, and SaaS companies and streaming media services have relied on the tactic for decades.
Forty-one percent might appear high to the untrained eye. But as we’ve explored previously, introductory discounts are here to stay for one key reason: they help grow subscriber bases and revenue. The majority of consumers themselves (73%) say they’re more likely to subscribe to digital publications that offer them introductory discounts and free trials, recent Toolkits research found.
Pricing and marketing tactics will continue to shift and evolve as publishers’ subscription businesses mature. Still, it’s safe to assume publishers will continue to follow the data and prioritize the approaches they believe are in the best interests of their businesses.
It’s no secret that publishers continue to face significant challenges – particularly regarding demand for their products and their ability to monetize their audiences sustainably. Is it possible they’re relying too heavily on discounting to drive subscriptions? Absolutely. But there’s currently little meaningful data to suggest what an “acceptable” level of discounting for digital news products is, or that publishers are surpassing it.
