Newspapers finally reducing churn


Even though total circulation has fallen significantly over the same period, research by the Newspaper Association of America (NAA) finds that its members have gotten better at reducing subscriber churn over the past eight years.

According to NAA, the percentage of subscribers who cancel subscriptions dropped to 31.8% in 2008, compared with 54.5% in 2000. That reduction in the churn rate came despite a rise in home delivery and single-copy pricing.

“Newspaper companies have made substantial progress with a range of new initiatives as they move aggressively to adapt their business models for success across multiple platforms. As the fall in subscriber churn indicates, publishers have focused their efforts on retaining subscribers in key market segments that translate into maximum advertiser value,” said NAA President and CEO John Sturm.

In addition to reducing churn, NAA said other elements of the newspaper business model reflected in the research include:

– Consumers highly value the newspaper print product: Newspaper publishers have been able to boost subscription and single copy pricing, a positive development for advertisers who recognize the value of engaged readers who are willing to pay more for print newspapers. According to the data, 32% of newspapers priced their daily edition at 75 cents at the end of 2008, compared with just 2% in 2006. The seven-day, home-delivery weekday rate has also increased, rising to $3.66 on average (vs. $3.37 in 2006). 

– More newspapers are outsourcing home delivery: According to the survey results, 15% of newspapers outsource their home delivery and 40% deliver other publications. In the 100,000-circulation category, nine out of 10 newspapers deliver more than just their own publications and count income from that arrangement as a revenue source.

-Newspapers are using discounts to direct subscribers to higher retention payment plans: In 2008, 92% of newspapers offered a discount for participating in a recurring payment plan. In 2008, 38% of new subscriptions were sold on a recurring payment plan while only 28% were sold with no initial payment required. Subscribers who pay by credit or debit cards are more likely to be active subscribers after one year.