Aggressive Pricing: The Key to Maximizing Reader Revenue

When I started out as a media reporter a decade ago, publishers sent press releases touting their lofty rate bases, and subscriptions to Pulitzer-winning magazines could often be found for a few dollars a year. 

Times change. While shifts from print to digital — or from chasing ad dollars to chasing subscription dollars — are some of the most visible signs, they’ve been accompanied by a broader shift in audience strategy. A growing number of publishers seem to recognize that they can build profitable businesses by focusing on the quality of their readers as much as the quantity.

But it’s much easier to embrace the idea of reader revenue than it is to build a profitable subscription business. Success depends on continually reinvesting in both content and audience. To do that, publishers often need to come as close to maximizing their reader revenue as possible.

“The emerging agreement is that if you are going to do subscriptions, you have to be prepared to be aggressive in pricing,” said David Clinch, a veteran media executive, consultant, and VP of partnerships at Mather Economics. “It can’t be a side thing that you try. You have to take it seriously. Acquisition is easy; retention is hard.”

Although subscription pricing is complicated, Clinch said that publishers who pay close attention to their pricing strategy, persistently experiment with rate increases, and study their audience’s behavior can succeed in slowly pushing up their average revenue per subscriber.

“The overwhelming data shows that once people subscribe and they see the value in what you provide, they will stay, and there is price elasticity,” he said.

To find out more about how publishers can apply an aggressive approach to pricing, I spoke to Preston Holland, who oversaw a shift in strategy at enthusiast title Flying Magazine after its acquisition by digital media entrepreneur Craig Fuller in 2021.

In circulation since 1927, the magazine was losing money on most new subscriptions it sold, Holland said, having underpriced subscriptions for years to maintain high subscriber numbers. On average, subscribers were paying less than $10 for a year of monthly print issues and digital access.

“We started testing the upper limit of the subscription price to see when there is a rejection,” he said. “And we just started pushing. Will somebody pay five bucks more? How about five bucks more than that? We don’t advertise our subscription price anywhere so that we can continue to run those price tests.”

In the early going, Holland said the strategy was as simple as A/B testing in WordPress. When readers clicked a “subscribe” button, some would be brought to a page offering a $29 annual subscription, and some would see $39.

Clinch said there are multiple ways to experiment with different prices. “You can A/B test against segments of your audience, against segments of your content. You can test different prices without having to pull the trigger on your entire audience with one sticker-shock price. There are now ways to be much more flexible.”

Two years later, Holland says Flying’s average subscriber is now paying $40 per year. Getting to that point wasn’t easy, and it took a willingness to let go of a large percentage of subscribers.

“We were brutally truthful with our salespeople that the rate base was going to come down,” Holland said, adding that advertisers were also skeptical. But the data suggested that most of those cheaper subscribers weren’t the types of consumers that Flying’s advertisers cared about reaching anyway. 

Going to market with what Holland called a “quality audience” helped open new opportunities on the advertising side, too, he said, even with a lower rate base.

“What our advertisers saw is that their response rates were way up. We’re able to say that we drive value for you as the advertiser because we really care about who our audience is.”

Preston said that after years of losses on the subscription side, Flying broke even in the first year of its more aggressive pricing strategy. And the margins have improved since, allowing the publisher to get more sophisticated in its pricing strategy, including offering readers different rates based on their behavior on the site and levels of engagement with the content.

“Our retention numbers are up because we delivered a quality product,” he said. “We’re not going to gouge them, but we are going to charge what we’re worth.”

Greg Dool is a freelance writer, editor, and consultant specializing in business journalism, audience strategy, and branded content. He was previously a staff editor at The Real Deal and Folio: Magazine and a contributor to Digiday and Digital Content Next, among others.