In December, The New York Times featured Susan Miller’s Astrology Zone app in a story about how popular apps are trying to find a revenue stream through paid subscriptions. In this Case Study, we interviewed Miller to get the actual data and stats, which included a 1.3% conversion rate. Read on to discover the pros and cons of the mobile app subscription industry, from awesome member engagement tactics like push notifications to a lack of control when it comes to renewal marketing. Plus, discover the one time social media has a better ROI than email marketing!
Company Profile
Founded: 1995 online; 2003 on mobile;
mobile subscriptions started in 2013
No. of Publications: 1
Employees: 30 independent contractors, most part-time
Business Model: Hybrid (subscriptions, advertising, one-off sales, events)
Paying Subscribers: Undisclosed
Location: New York, NY
Websites: http://www.astrologyzone.com/
http://es.susanmiller.com
Target Market
With a B2C product, Susan Miller’s Astrology Zone website and app have quite a broad appeal. Miller says her audience is “extremely educated” with 43% having a college education and another 48% having graduate school education. 50% of her audience is in the US, the rest abroad (in fact, her app is most popular in Macedonia, according to AppAnnie.com).
Miller says the gender split in her audience is fairly even. Interestingly, men in their 20s, 30s and 40s are more amenable to reading horoscopes than men in their 50s and 60s who have been “socialized out of it.” She rather insightfully commented, “This generation of men are the most educated, but they can’t get a job, so they’re open to hearing about someone else’s ideas for them.”
Content
Astrology Zone provides daily and monthly horoscopes for all 12 zodiac signs. The content is free in its entirety on the website (although there seems to be a remnant paid service for daily emails that is no longer actively marketed), but mobile users only get a one to two sentence preview before being asked to buy a subscription for full access.
Miller says she keeps the website free so that the people who need it but can’t afford it can still access her predictions. (Editor’s Note: This is an unusual tactic. Usually we recommend website-app divisions like The Week practices, where the free content is categorically different that paid content. But, in the highly competitive B2C environment, a paid site may not work well, Instead, paying for the convenience of daily updates on a mobile device may make more sense.)
Miller says she writes for both a professional and non-professional audience, referencing some of the planetary positions but not diving deep into the calculations she uses to make predictions.
She says the site is pay-worthy because “I’m a real astrologer.” However, Miller also has a huge following, cultivated via social media and her contributions to major women’s magazines globally (see Marketing Tactics for more).
The content is text-only and updated daily. The average horoscope is 1,000 words, making Miller a prolific writer. The app is only available via iOS devices at this time, though Miller states that most read her app through an iPhone, not the iPad.
Revenues
Miller states that she pulls in 6 figures a year from Astrology Zone. Revenue streams from Astrology Zone include subscriptions, advertising (both online and on mobile), one-off sales and events.
Miller says that her revenue breakdown is fairly evenly distributed, although we suspect that with a 1.3% conversion rate of free downloads to paid subscriptions, that the app is listed as one of the top grossing apps in the iTunes store primarily because of advertising revenue. (Note: The industry benchmark for free-to-paid conversion is between 1% and 3%, making Astrology Zone’s conversion rate unsurprising.)
The app has several subscription plans:
- $1.99 for one week
- $4.99 monthly subscription
- $12.99 for three months (quarterly)
- $49.99 annual subscription
Data via AppAnnie suggests that the monthly ($4.99) subscription plan is the most popular, followed by the quarterly then weekly plan. The annual plan seems to be the least popular.
Advertising revenues are garnered both through Astrology Zone’s site and mobile app (see below for a mobile ad screenshot). The ads are rather patchwork from different companies (see screenshot below). Miller says she would like to get one sponsor, like Ralph Lauren, to buy up all the advertising and create a more sophisticated experience for users (a bit like the PBS model of underwriting).
One-off product sales include calendars and on-demand printed books that offer personalized horoscopes for people by their year, month, day, time and city of birth. In fact, Miller’s calendar and books are featured products on America Direct Book’s website.
Lastly, Miller in invited to speak at a variety of events, often in ritzy locations like the Fontainebleau or Valentino’s headquarters. In January she gave an all-day talk at the 3 West Club in New York; tickets were $99 a piece. She will also give talks on cruise ships.
Miller also debuted a Spanish site in December of 2013. Since Astrology Zone does not translate well, the site is located at http://es.susanmiller.com. It is too soon to estimate revenues from this venture.
Marketing Tactics
Because Miller has been writing for name-brand publications for years, she had a visible profile to capitalize on to market her website and mobile app. However, that visibility is bolstered by some solid marketing tactics.
Publicity and PR
Miller has 18 years of writing for women’s magazines like Elle Hong Kong, Vogue Japan, Claudia Brazil, Mini Russia, Marie Claire China, Tempo, Amica and other publications around the world.
She seems to be pitching herself, but has an assistant that helps with organization and follow-ups. She also has a dedicated PR professional handling her media inquiries.
Live and Virtual Appearances
As we mentioned, Miller has an impressive events business with her as a featured speaker. She also appears on virtual events, such as a monthly chat on The Washington Post’s site and her horoscopes are featured on the Neiman Marcus blog.
Social Media vs. Email Marketing
Social media has been a boon for Astrology Zone, which has more than 174,000 Twitter followers. Miller says she tweets about 30-40 times a day, answering people’s specific questions, and getting multiple re-tweets (see Vendors & Technology for how Astrology Zone tracks its social media influence). Miller also has a presence on Facebook with more than 93,000 friends.
Astrology Zone’s popularity on social media seems to stem from the personal connection Miller makes with her audience and her incredible energy and non-stop use of the platforms. “I try to give people compelling content, and work hard at giving them what they need.”
In addition, social media fills a gap caused by Astrology Zone’s problems with email marketing. Even though the site has a list with 150,000 email addresses, it has basically stopped sending any emails because it was only getting a 5% deliverability rate. While this could be due to many factors, Miller surmises (and we agree) that it was because emails with “astrology” in the subject line or body text almost always gets delivered to spam, especially when sent to that big a list.
Conversion Tactics
Astrology Zone’s mobile app has a 1.3% conversion rate from free downloads to paying subscribers since launching subscriptions in December 2013. By far, the best lessons to take from the Case Study are Astrology Zone’s conversion tactics on mobile.
First the app allows for free daily horoscopes for all 12 signs, but the previews are only one to two sentences long. So every day, audiences are offered an opportunity to pay for more access.
In addition, the app sends daily push notifications every morning at 7am. These notifications ding with the same sound as a text message, which are impossible to ignore if a user wants to use their phone, thereby creating a highly likely scenario for engagement.
The app also has other conversion points, such as its Cosmic Tools and Life and Love sections.
The design of the app is handled almost entirely by Phunware. Miller says she wants to get rid of the big button in exchange for something more “subtle.” However, we advise against this — the button size is appropriate for optimizing conversions. We would recommend, however, a more eye-catching color than grey and more compelling copy, such as “Subscribe & Keep Reading!”
Retention Tactics
Because paid subscriptions were only launched in December of 2013, there’s no accurate data on account lifetimes.
In addition, renewals are handled by Apple, so there’s little Astrology Zone can do in way of retention messaging or timing of renewal reminders. Note: This is often the biggest impediment to reducing churn when pursing subscriptions via mobile apps.
However, the daily push notification is a HUGE retention tactic as it increases engagement, a strong predictor of renewal rates. We recommend anyone looking to create mobile app subscriptions launch with a push notification.
About Susan Miller
As a child, Susan Miller suffered from a rare disease that left her hospitalized for long periods of time; she spent almost 11 months in the hospital when she was 14. Her mother was an astrologer who only read for family members, and agreed to teach Miller astrology.
Later, Miller attended NYU and got a degree in business. After, she was approached by a friend to start a column for Time Warner. She then worked for AOL before launching Astrology Zone in 1995.
Her biggest lesson learned seems to be the price and pay-off of working with Apple: “When they were putting together their policies, they never thought about people like me or anyone who refreshes content daily. They never thought about subscriptions. Until subscriptions were allowed, you didn’t have hope to make a profit.” However, she says she stuck with it because “I had market share and my readers loved it and I knew there was going to be a future here.” She borrowed $80,000 six years ago to fund her mobile venture, and only just paid it back.
Her best advice to other publishers is to look for unobvious cross-promotion opportunities. For example, she’s pursuing opportunities to promote herself among NFL audiences. “I want to infiltrate places people have never heard of me and have them trip over me by accident.”
Vendors & Technology
Hosting — Dreamhost
http://www.dreamhost.com/
Mobile App Creation & Analytics — Phunware
http://www.phunware.com/
Analytics — Google Analytics
http://www.google.com/analytics/
Social Media Analytics — Crowdbooster
http://crowdbooster.com/
Insider Analysis
First, we think it’s great that Astrology Zone has embraced new digital media in such an engaging way. There’s no debating the popular appeal of the app, and it’s wise to pursue a freemium model. Furthermore, we think the push notifications and large “Subscribe” buttons on the app are great conversion and engagement tactics. And we’re also excited to discover an example where social media marketing is getting a better ROI than email marketing. Lastly, we love the idea of getting a corporate underwriter to buy up all available advertising on the mobile app.
Other publishers looking to launch mobile app subscriptions should take note that Astrology Zone’s success (e.g., being the “highest grossing lifestyle app on iTunes”), is largely because of its popular appeal, which makes a 1.3% conversion rate enough to generate revenue. Niche publications with less broad appeal will have a harder time covering operating expenses through mobile subscriptions unless they have higher price points.
As always, Apple’s 30% commission and tight control of retention marketing and credit card renewal is a serious detriment to subscription marketers looking to grow a robust and steady recurring revenue stream. We suggest Astrology Zone consider selling their app through their site so that they can eliminate Apple’s 30% cut and gain more control of email marketing and credit card renewal. However, this would also require resolving the site’s email deliverability problem; we suspect a more high-end email service provider, such as Lyris, could tackle that problem effectively, possibly through list segmentation and double opt-in mechanisms. Lastly, we encourage Astrology Zone to consider some data-based marketing tactics, such as A/B testing a different subscribe button (data shows that the bigger, the better) or seeking ways to convert more free users.
