Why consumers cancel subscriptions to digital publications
- 53% of digital publication subscribers canceled at least one subscription in the first half of 2022.
- 23% of people who have canceled subscriptions said they have done so because they weren’t using them enough.
- 22% canceled because the cost increased, and 21% because they didn’t feel they were receiving good value for money.
Lack of use, price increases and poor value for money top the list of reasons consumers cancel subscriptions to digital publications, according to research by Toolkits and National Research Group.
Based on a study of 2,509 U.S. consumers, 53 percent of digital publication subscribers said they canceled at least one subscription during the first half of 2022. Twenty-three percent of people who have canceled subscriptions said they did so because they weren’t using them enough, 22 percent because the cost increased, and 21 percent because they didn’t feel they were receiving good value for money.
Against a backdrop of economic uncertainty, 20 percent said they canceled to cut back on personal spending and 17 percent because they found viable free alternatives. A relatively small percentage (15 percent) said they canceled because of the quality of content on offer.
The data also imply that consumers cancel subscriptions to digital publications for different reasons than for streaming services such as Netflix or Spotify.
People who have canceled subscriptions to streaming services tended to do so because of cost, not because they weren’t using the service enough, implying streaming services might be more “sticky” than most publishers’ products.
Previous NRG research found that among consumers who have canceled a TV or movie streaming service subscription in the past, the most common reason was the expense. For music and podcast streaming services, 41 percent canceled for the same reason.
Combating subscriber churn
For publishers, the findings reinforce three effective approaches for minimizing subscriber cancellations and managing “active” subscriber churn. (Note: Reducing “passive” subscriber churn comes with its own set of best practices and considerations.)
Building habit is essential
The most common reason cited by respondents for canceling subscriptions was that they simply weren’t using them enough. For publishers, this highlights the importance of promoting regular engagement among their subscriber bases and illustrates why many publishers see a strong correlation between subscribers’ product usage and their propensity to churn.
For this reason, a growing number of publishers now orient their subscription operations and broader businesses around “North Star” engagement metrics designed to act as simple but powerful barometers for the health of their subscriber bases. For example, many utilize a “recency, frequency, volume” metric which factors in how recently, how often and how much content each subscriber consumes. It can be used to help mitigate churn by identifying “churn-risk” subscribers, but it can also help propel growth by helping publishers understand which subscribers are deriving the most value from their subscription products and why.
In order to promote regular engagement, publishers continue to gravitate towards habit-forming features and content offerings, including regular email newsletters, podcast installments, games and puzzles and more. It’s also imperative that publishers begin thinking about engagement and retention immediately after a new subscriber is converted, and a critical first step in effective subscriber retention and churn mitigation is a robust and carefully considered subscriber onboarding strategy.
Focus on perceived value
Twenty-one percent of respondents said they canceled subscriptions because they didn’t feel they were delivering good value for their money. Delivering value is a prerequisite for any sustainable subscription product, of course, and publishers offering low-value or overpriced products might consider investing more in their offerings and/or adjusting their pricing.
Value perception can be influenced by other adjustments, however. For example, some publishers are finding that less is more when it comes to the features and benefits included in their subscription products, and that more focused offerings often meet audience needs more directly and result in less “waste” in terms of content and features that audiences might pay for but rarely access. Other publishers are “unbundling” their existing subscriber features and positioning them as standalone products in order to appeal to more targeted segments of their audiences.
More focused products can help significantly boost value perception and mitigate churn as a result. Products firmly oriented around solving problems or satisfying specific audience needs perform better than those with complicated or vague value propositions that are a “nice to have” or require audiences to work hard to derive value and/or justify their purchase.
Flexibility on pricing and terms goes a long way
Twenty-two percent of respondents said they canceled subscriptions because the cost increased, and 20 percent said they did so to cut back on their personal spending. Even for publishers with high-value subscription offerings, increased flexibility is a powerful retention driver. Publishers that are willing to adapt to subscribers’ changing needs and constraints find themselves better equipped to drive healthy retention, particularly during difficult economic periods.
Flexibility in a few areas can help reduce churn and provide positive subscriber experiences by ensuring relationships don’t end simply because publishers are unable to meet their customers halfway. These include offering price-sensitive subscribers temporary price reductions, access to shorter subscription terms, downgrade options, and attractive rates for longer commitments.
What’s next: A focus on churn management
Converting new subscribers is proving more challenging as economic conditions force consumers and businesses to spend increasingly judiciously. Against that backdrop, “flat is the new up” as far as some publishers are concerned, and protecting and maintaining existing subscriber bases and revenues is becoming a priority – particularly as revenue from other streams such as advertising and commerce begins to soften.
Churn mitigation is always a priority for any subscription business, but we expect to see publishers stepping up their retention efforts significantly heading into 2023 as economic conditions look increasingly shaky and competition for subscriber dollars becomes increasingly fierce.
Research was conducted by Toolkits and National Research Group, a global research and insights firm that works with the world’s largest content creators and marketers. The study surveyed 2,509 U.S. consumers aged 18-64 and was conducted in August 2022. Participants were selected to be nationally representative (based on most recent US census data) in terms of age, gender, ethnicity, and income.
