Philly Inquirer’s Subscriptions More than Double; What’s the Deal?
By: Christiana Sciaudone
The nearly 200 year-old Philadelphia Inquirer saw a 136% increase in subscriptions in three years. The secret sauce includes a couple of ingredients, and prime among them has been dynamic walls.
The essential philosophy of dynamic walls, which are powered by AI, is that no single reader is the same, and therefore should not be presented with the same offering. Some publishers, for example, will offer two free stories per month to every reader, and then require them to pony up for a subscription. A dynamic wall, on the other hand, will take into account any number of factors about the person landing on a determined page to determine whether or not to present them with a paywall off the bat or give them the story for free, possibly with more ads than a subscriber might see.
“It’s a combination of your propensity to subscribe vis-à-vis the piece of content that you’re 8reading right now,” Darya Ushakova, chief marketing officer at the Inquirer, told AMO. “It all depends on what signals you’re sending to the system and what the system picks up on and what it thinks is the best outcome is for our revenue mix, which is obviously a mix of consumer revenue and advertising revenue.”
Between the discerning paywall and the implementation of a single and permanent subscription offer—$0.99 for six months, rather than sales of $1.94 for four months or 8 weeks for $0.99 that they had previously been running randomly throughout the year—subcriptions have grown to nearly 118,000 now compared to 50,000 in 2021.
It’s remarkable for a legacy newspaper to generate that kind of growth at a time when media is floundering for traffic as platforms change algorithms and can no longer be depended upon for readership. Yet another feat at the Inquirer has been that the majority of readership is direct, whether people go right to the homepage or land there from a newsletter or alert, instead of coming in via Google or Facebook.
It has been no picnic, however, getting to these ever-improving results. The six-month integration process of the AI program with the existing paywall software was not an easy lift and the human and machine trial and error—like both AI and editors and reporters trying to figure out what and why a particular story might be premium—has been an ongoing conundrum. Still, Ushakova said the AI program, known as Sophi and purveyed by Mather Economics, “is just like paying for itself over and over and over.”
Dynamic Paywalls?
The idea behind dynamic paywalls is that not all of those who reach your website and read a certain piece of content are equal. The reasons they landed on your pages can vary immensely, so why should they all be treated in the same way?
Say someone clicks on a CNN story about golden visas, which allow people to immigrate to other countries. This person has never visited the site before and the likelihood of their return is minimal. If presented with an immediate demand for a paid subscription to access the piece, the reader will probably go elsewhere for the news. However, if they are recognized for what they are, it would make more sense to give them access to the story, replete with advertising, and at least make some kind of money off of them instead of nothing. And there’s always the chance they’ll come back and can later be tackled as a potential subscriber.
On the other hand, if you have a reader who has been to CNN multiple times over the previous week, they are clearly finding value in the content and would be a likely subscriber, it makes sense to present them with a paywall pretty quickly.
“I truly believe that dynamic models in terms of reader revenue are the future, the only kind of way to survive, because it’s a way of putting the reader first, and it also allows the publisher to adapt the model to their own specific audience, as well as their strategy,” Madeleine White, Pool vice president of marketing at Poool, an audience conversion and management platform, told AMO.
Dynamic paywalls allow publishers to adapt based on whether they prioritize advertising revenue versus subscriptions, and against the data it collects about its readers, from where they come from to where they live. If it’s their first time on the website, they can be awarded a free story or whatever messaging the publisher prefers, White said.
Focus On the Top 5% of Readers
The reality today is that volume is no longer the most important drivers of revenue with platforms not providing the same number of visitors as algorithms and their priorities change. Publishers have been thinking in terms of ads reaching huge numbers of people, rather than capturing money from a very small number of readers.
That actually makes business more straightforward for publishers, Tim Griggs, founder and chief executive officer of consultancy Blue Engine, told AMO.
“The more narrow we can get in our intended audience, frankly, the easier all of it is,” Griggs said. “It’s easier from a product perspective. It’s obviously easier to write for or produce for. It’s certainly easier from a marketing perspective if you’re really targeted.”
The AI used by the Inquirer is Sophi, which Mather Economics purchased last year.
“What we’re trying to accomplish is we’re trying to mitigate, to minimize the friction in a user’s experience, like, if somebody’s just not likely to subscribe because they either don’t live in the market,” Matt Lindsay at Mather Economics told AMO. Publishers figure, “let’s just monetize them on the advertising side.”
Publishers will continue to foster that relationship and give them a paywall if and when they’re ready.
“Probably 5% of your digital audience reads more than two articles in a month. If you focus on that 5%, that’s really where you need to be because those are the people that are going to subscribe,” Lindsay said. “Don’t necessarily worry too much about the volume of the audience that you have. You really need to engage with that core audience.”
The dynamic paywall can serve a lot of different purposes, including trying to maximize the total revenue yield from a site between advertising and audience, Lindsay said.
“When the ad demand is low, let’s have more paywall sales attempts; when we have lots of advertising demand, let’s give away more content for free and get the page views and monetize the audience that way. And so there’s kind of a balance there,” Lindsay said.
The end goal is to build a more sustainable revenue mix, Patrick Crane from BlueConic, told AMO.
“You have to make sure that what you’re doing, from a paywall standpoint, makes sense for the content you’re producing,” Crane said. For some websites, they’ll never be able to charge for their content because the content’s not worth paying for. They can still make money from ads and/or operate a registration wall.
Media companies need to understand their readers in order to serve them better. Measuring success will no longer come from traffic but from average revenue per user, or ARPU, and AI can help publishers determine what the potential revenue is for a specific user. Should they get another free view or is it time for a paywall? What is the action that is most likely to generate the largest amount of revenue?
A 35% Conversion on Stories
Prior to the AI program, the Inquirer’s newsroom had already begun moving from a standard metered wall of two stories per month per reader to manually deciding which stories would be available only to subscribers. That generated an initial bump in subscribers. In 2022, they hardwalled archived content, adding between 150 and 300 subscriptions a week based on that alone.
“It’s very material, and it hasn’t petered out,” Ushakova said. When they fully implemented the algorithm program to automatically identify and lock stories according to thousands of rules, they saw a “35% lift on direct article conversions,” which she called “very, very significant.”
The newsroom maintains a great degree of control on stories and can reverse an algorithm decision. The system can reverse its own initial calls on locking or not locking stories depending on how it is performing in real time. It does “what it thinks is the best outcome is for our revenue mix, which is obviously a mix of consumer revenue and advertising revenue,” Ushakova said.
Anywhere between 50% and 70% of subscribers come from the dynamic paywall, and the Inquirer expects solid growth for 2025 and beyond, Ushakova said.
“We are on the path to sustainability, knock on wood, from an EBITDA perspective and revenue, consumer revenue perspective, and we’re hoping that we’re going to be able to pull it off,” Ushakova said.
As Blue Engine’s Griggs put it: “The demand curve for a lot of news organizations or media organizations is totally untapped.”
