Five on Friday: Micropayments, Profitability and Email Metrics

Featuring Media Post, Associations Now and Journalism.co.uk

Five on Friday: Micropayments

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We are almost at the end of the first quarter, and it has been a big one in the world of subscriptions with launches, acquisitions and takeover bids. In this week’s edition of Five on Friday, we’ll cover related subscription and membership topics, including micropayments as an alternative to subscriptions, profitability tips for 2019, the growing popularity of streaming video versus cable subscriptions, whether associations should offer subscription packages, and the email metrics your subscription company should be watching.

 

 

Micropayments Offer Publishers an Alternative to Subscriptions 

 Profitability and Email Metrics

Source: Bigstock Photo

Micropayments haven’t quite taken off for online publishers yet, but some like the Winnipeg Free Press are using it with success. In a recent article on Journalism.co.uk, Christian Jensen and Jacob Granger discuss how micropayments offer online publishers an alternative to subscriptions. This is an opportunity for online news outlets and readers to both get what they want – news outlets want their stories read, to gather data about their readers, and to make reading their news a regular habit.

Readers, on the other hand, want access to certain articles but may not yet be ready to make the commitment of a subscription. A micropayment offers a compromise. Readers can pay for the news they access, one article at a time, and the publisher gets the opportunity to win over that customer.

We like the model Winnipeg Free Press offers – metered paywall, so semi-regular readers get X articles free; micropayments for the occasional reader ($0.27 per article in Canadian dollars); and subscriptions for the frequent reader ($3.92 to $7.93 per week in Canadian dollars). This mix strikes a nice balance between the different types of readers.

As Jensen and Granger explain, the key is to remove barriers and that includes paywalls. Through micropayments, you can capture a reader’s payment and registration information (name, email address, postal code, phone number) and, hopefully, get permission to contact them. With the right technology, publishers can use that data to provide tailored packages for those micropayment customers to try to convert them into subscribers. Read more in “Micropayments Can Help Online Publishers Increase Revenue Without Asking for Subscription” on Journalism.co.uk. 

How to Be More Profitable This Year: Upselling and Inventory Management

Five on Friday: Micropayments

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Every business, even unicorns and bootstrap start-ups, want to be profitable as soon as possible, and once they hit that threshold, they want to stay there. But how do you make it happen? James Foxall offered five tips to increase profitability in 2019 for Commercial Integrator. We’ll skip over the obvious one – recurring revenue – and touch on two others for you to ponder.

Upselling: This may seem like an obvious opportunity for growth, but not everyone takes advantage of it. Part of that can be a function of workflow – for example, if the initial sales team exits the picture while the customer service team takes over to maintain the business, but no one is responsible for additional sales. A smart business will look at all the opportunities for an upsell.

Let’s look at a very simple example. McDonald’s – Have you ever gone and ordered your favorite sandwich or meal, and they asked if you’d like a large drink or want to add dessert or fries? It happens almost every time. It is annoying, sure, but think how many large drinks, additional sides or desserts they sell with a simple question.

Many subscriptions offer opportunities for upsells as well – buy one magazine, get one free (get ’em hooked and renew at a higher rate next year); start out with a Hulu limited commercials plan and upgrade to an ad-free plan or Hulu Live; or start out with the freemium version of a streaming music service, fall in love with it and upgrade to the premium product.

Managing inventory well: This applies to subscription box companies in particularly, especially those who sell perishable items like meal kit services. They need their deliveries “just in time” and for just the right amount. Any overages are wasted and any shortfalls could disappoint – and potentially – lose customers because their meal selections for the week are sold out or not available. Using technology and experienced staff for purchasing, you can reduce waste and have exactly what you need when you need it.

For more ideas, read Foxall’s March 12 article, “Follow These 5 Tips for Increasing Profitability in 2019,” for Commercial Integrator.

Streaming Subscribers Surpass Cable Subscribers for the First Time Ever

 Profitability and Email Metrics

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According to the Motion Picture Association of America (MPAA)’s 2018 Theme Report, subscriptions to streaming video services grew 27 percent between 2017 and 2018 to 613.3 million globally. For the same period, cable subscriptions were 556 million. This is the first time streaming subscriptions have surpassed cable subscriptions.

Looking at U.S. numbers, more than 70 percent of U.S. homes use a streaming service to watch TV and movies, while 80 percent watch using traditional pay-TV methods. The reason the number of streaming subscriptions surpassed cable subscriptions is because so many homes subscribe to multiple services. I fall into the category. I subscribe to Netflix and Amazon Prime Video and used to subscribe to Hulu.

Here are some other interesting statistics from that report:

  • In home entertainment, global consumer spending grew 16 percent to $55.7 billion; U.S. spending alone grew 12 percent.
  • Cable television is the highest revenue platform (still) globally, earning $118 billion in revenue in 2018, an increase of $6.2 billion over the previous year.
  • Total subscription revenue for 2018 was $13.3 billion, a 28 percent increase over 2017.

Read the full report on MPAA.org.

If the Mets Can Offer Subscriptions, Should Associations Consider Them for Conferences?

Five on Friday: Micropayments

Source: Bigstock Photo

Food, wine, entertainment, books, music, and now even baseball are available via subscription and, for many businesses, subscriptions and memberships are a great fit. Baseball is a new edition, explains Associations now. The New York Mets are offering a ticket subscription package for $39 a month for tickets to stand to watch the games. Want to take a seat? That will cost you an upgrade, but it is doable.

In a March 21 article, Samantha Whitehorne asks if this is a business model associations might consider for conferences. She asks the tough, and subjective, question, “Should associations use the subscription model for face-to-face events?” The answer, as you might expect, is it depends. Before making that decision, consider the following factors:

  • Is your association’s meeting attendance dropping?
  • Are you trying to reach a new group of attendees, perhaps a new generation?
  • Would a conference subscription package boost attendance?
  • Would association members be willing to pay for such a subscription?
  • How would you price it?
  • What is your breakeven point per attendee and per conference?

Whitehorne, editorial director for Associations Now, suggests that associations test the model for local events. For example, for a set price each month, association members get access to weekly networking events or a weekly educational series. If the model works at a local level, perhaps it is something you can try at the regional or national level. Learn more about this interesting idea in “Should Associations Offer Conference Subscription Packages?” on AssociationsNow.com.

2 Email Metrics You Should Be Tracking

 Profitability and Email Metrics

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You’ve crafted the perfect email, crafted a catchy headline and added a GIF that you thought was hilarious. Your email metrics tell a different story. They help guide us in our efforts to know what works and, more importantly, what doesn’t. In a March 19 blog post on Revue by Dan Oshinsky, the director for newsletters at The New Yorker, he shared the six email metrics he believes are the most important.

Here are two that we pay attention to:

List growth, or lack thereof: From month-to-month, how many new subscribers do you get? Is this growing each month, or has it leveled off or dropped in recent months? Knowing the ‘what’ is terribly important but knowing the ‘why’ is even important.

Engagement rate: For each industry, there are standard and “best practice” percentages to target. Oshinsky suggests looking at the percentage of readers who open 50 percent of your emails. Other benchmarks are calculated by looking at the open rate and click-through rate. For your business, you have to define what your ideal engagement rate is, and once you do, be sure to track that each month to see if you are improving, staying steady or losing readers.

For more great email metrics information, read Oshinsky’s original blog post, “Six Email Metrics That Matter (That Aren’t Open Rate).” For information on other email metrics, such as click-through rates, spam complaints, email forwarding, ROI and more, visit CampaignMonitor.com.

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