Paid Subscriptions: Arizent’s Plan To Double ARR in Three Years

Like so many other publishers, Arizent’s titles saw a precipitous drop in traffic over the past year, down 18%.

They were profitable with an annual recurring revenue of $25 million, but the top of funnel outlook was looking sour. So owner Observer Capital challenged management at Arizent to double the size of its paid subscription business over the next three years, a plan that goes into action next month. So how to grow?

“If we look back at the one tried and true business model, the most profitable, the most consistent business for us, has been subscriptions—paid subscriptions,” Arizent Chief Executive Officer Jeff Mancini told AMO. Specifically, “enterprise subscription has the highest growth of anything in the business… There’s a large market opportunity out there, and the only way to really penetrate that market opportunity is to go firm by firm and capture them all.”

Arizent is present in seven verticals, including banking, accounting and digital insurance.

Its three-part strategy to tap into paid enterprise subscriptions includes:

• Transform from a traditional media company into a market intelligence business.
• Build up the enterprise sales channel.
• Speed up the revenue flywheel across the business.

Here’s what that looks like in practice.

Part one: Transform from a traditional media company into a market intelligence business

Arizent is niching down into the niche of a niche, and it’s not going to just give readers content anymore.

“Our customers need a trusted analysis of the market: what that means for their teams, to make money, save money, avoid risk, grow their careers. That’s the stuff they really pay for,” Mancini said.

Arizent thinks it has found an undiscovered segment that it alone can cater to (for now).

Said Mancini:

“There’s industry information, and then there’s role based information. And I think that niche of the niche is where we find the stickiest value, the most community, even when you whether you’re talking about subscriptions or events, if you’re in a room where people are not only the same industry as you, but they’re also in the same role as you, it becomes the sort of tribal experience.”

The Wall Street Journal has role based verticals like CMO Journal and CFO Journal, but they’re not industry-specific. Arizent is targeting specific professional roles within financial services industries at first before moving onto its other segments. Specifically, they’re concentrating on payments and regulation and compliance for American Banker, and buy-side professionals like hedge funds, investors and law firms for Bond Buyer.

The journalism will continue and specialized analysts will be hired to create targeted content, research and data analysis. Those intelligence products should provide deep, actionable insights for professionals in specific positions within financial institutions.

The decision to build came out of customer advisory groups who said they didn’t want to be told what was happening everyday, but how that matters for the team and what they need to do about it.

“They want a point of view that’s data driven, that they can hang their hat on,” Mancini said. “They don’t want to search on ChatGPT for ‘What do I need to do for my strategy?’ They want a trusted source of information that’s coming from proprietary data and research that we do, and then putting out opinions from these analysts and guidance for the teams.”

Part two: Building up the enterprise sales channel

While a single credit card subscriber is nice to have, it doesn’t compare to enterprise subscribers.

An enterprise subscription is more often associated with software as a service kinds of businesses rather than media. They tend to be longer-term and cover a large group of employees, if not the entire company, with a price based on size or revenue and tailored to each company.

It also has a higher retention rate—between 90% and 95% depending on the brand versus the usual 78 to 80% for a single subscription credit card business—and it has seen double digit growth for Arizent.

“You’re permeating a larger portion of those companies, it’s harder and harder to leave. How do we get to everybody in every role and every team?” Mancini said.

Part three: Speeding up the revenue flywheel across the business

Aligning products—subscriptions, live events and marketing services—around roles rather than overarching industry coverage should create a series of flywheels across the business: three on ramps for lead generation, Mancini said.

“All we’ve done is say, I don’t know that anybody’s taken an industry down to the level of role and served it in that deep of a capacity. It’s a level below,” Mancini said. That means they are targeting niche teams—upwards of 50 employees—inside of large institutions.

“It’s a Trojan horse into every one of those institutions,” Mancini said. By going to a specific department that has an operating budget and offering them a critical tool versus going to the team responsible for subscriptions across the company—typically procurement—who are also the ones most likely to force budget cuts—the product becomes stickier.

They’re setting aside search and social as top of funnel sources and focusing on partnerships, paid media, first-party data and events to get not a million page views but the 50 executives that need to read and use their services.

“We need to proactively go and meet the people, but we’ve got to say, look, we’ve got a product specifically designed for your team. So that means we’re talking about TAM, we’re talking about CAC, LTV, those metrics that subscription product companies talk about, not pageviews, which is really a metric for media.”

There are 10,000 banks and credit unions in the U.S. and Mancini thinks Arizent can charge  anywhere from $25,000 to $100,000 each for enterprise subscriptions—with a built-in 10% annual increase. Of just the open institutes in the core banking sector, Arizent has a market opportunity of approximately $700 million in annual run rate.”

Arizent, which has about 200 employees and is hiring, has already begun transitioning to a more enterprise subscription model and has seen initial results of paid open subscriber base up by 40% at large banks.

“They’re people who are fully engaged in the content so that benefit outweighs the other model [selling by seat], but it’s also just a better growth model,” Mancini said.

What are the risks they could face?

Declining traffic from social platforms and AI search overviews could happen faster than Arizent can fully implement its new strategy.

Arizent might be overestimating the value of role-based content and how many people on a team it would be relevant to.

They might also have a hard time finding and hiring the right specialized analysts who can create role-specific, high-value content.

Doubling revenue in three years to ARR of $50 million is asking a lot in a scenario full of uncertainty with fears of recession abounding amid trade wars.

Potential disruption from competitors creating low-cost, AI-generated content or newsletter aggregation services could undermine their premium subscription model.

Even if it does reach the whole company, how can Arizent be sure that employees are really engaging?