Welcome back to the Baekdal Plus newsletter. Today, we are going to talk about two things. First, I have written an in-depth article about the "welcome experience", and secondly, let's talk about "pricing".
There are a lot of things that publishers can optimize, but one of the things that is really important in the early stage of a subscription is the welcome experience.
The welcome experience is what you do as a publisher to help people use your publication in a more valuable and engaging way. There are a lot of nuances to this, and it extends far beyond just a welcome email to new subscribers. It's something you need to think about from the very early beginnings before people even decide to become subscribers. It's something you use to help people to get a good start, and it's a guide that helps people see and understand the value of the extra things that you do.
In my latest Plus report, I talk about this in much more detail, so take a look at: How publishers can get better at the "welcome experience".
The price of a newspaper is not how much you ask people to pay, but how much you return to them.
I have talked about this before, but one of the questions I often get from publishers is what is the right price for a newspaper? Should you price a newspaper the same as Netflix, now that people have gotten used to that pricing level? Or... what?
The answer I usually give is this: The price isn't the problem most have. Instead, the real problem is what people pay for.
What I mean is this:
Whenever you pay for something, however much money you pay must provide equal or increased value in return.
For instance, if you buy solar panels for your house, it must (over time) either match your current expenses or, preferably, make the electricity you use cheaper.
This has many names. Some call it your return on investment, but in this case I will call it the 'return value'.
Mind you, the return value doesn't have to be money. It can be other things. If you buy a ticket for Legoland or Disney World, the return value is an enjoyable experience. But even so, it functions the same way. There must be a perception of value to the individual.
So what about the news? Well, look at the front page of any newspaper and then ask: What is the return value of each article?
Take these headlines. To each individual reader, if someone has paid £125 per year, what is the return value of this?
In this example, I took a screenshot from the Guardian, which is (as you know) very successful. And, as media people we are convinced that our journalism is amazing, but in the UK, only 8% of the public thinks paying for news is valuable to them. In other words, 92% do not think this provides a high enough return value.
This is the problem with news in general. It's not that it costs £125/year. It's that people don't think they get £125 or more back from it. The news isn't helping them make smarter decisions, or giving them a good enough time to be worth spending so much.
Of course, this is always a very subjective thing. We can always point to a story where, as journalists, we did an amazing job helping the public in a very specific way. In fact, just this morning, one of the largest newspapers in my country posted an article providing some really critical information that people need right now about the upcoming election.
This is great, but if I'm saying we often do a good job, then what is the problem?
Well, one problem I often come across is about consistency.
Let me give you an analogy. Imagine if every day on your way to work, you stop by a local coffee shop to get a nice cup of coffee for your morning commute.
The first day, the coffee was great. The next day, it tasted a bit weird but, okay, whatever. The next day it's great again. The day after that, it's basically warm water. Then it's bad the next day, good the next, mediocre the next, and so it continues day after day.
My question to you then is this: Would you accept this? Would you accept going to this place every day, paying the same amount of money, and every time the quality is all over the place? How long would it take before you spoke up and demanded something better?
This is the problem we often see with news. When we think about the value of news, it's defined by how relevant, useful, and interesting to you it is. But go to any newspaper and just look through the front page.
One story might be really good, exceptionally relevant to you, very well researched and fact-checked, and has all the information you need. It's wonderful.
But, then, right next to it, is another story. This one seems to be published without any care at all. It has a click-bait headline, it's about something that has no relevance at all, and even if it did, there is nothing the reader can do about it anyway, and it's 350 words of the newspaper reporting what someone said without fact-checking it ... so you are left wondering whether you can even trust any of it.
As a media analyst, I see this hundreds of times every single day. And, we can even measure it. Over the past many years, I have had a number of publishers do audience studies where they asked (among other things): "Is the news we bring made for people like you?"
Obviously the result varies from one publisher to another, but most publishers have really low numbers for this. Sometimes even down to a single digit percentage.
Just think about that for a second. In fact, think about the coffee shop again.
Imagine if your local coffee shop did a study where they asked their customers:
... and then imagine that the result was that only about 10% of their customers answered 'yes'.
Imagine how disastrous that would be, and then think about the price. If only 10% of their customers felt that their coffee was special, what price would they be able to set?
The answer is obvious. They would not be able to charge a premium fee. Instead, people would probably only be willing to pay the same as in a discount supermarket. The exception would be if you were a really big brand, like Starbucks, then maybe you could get away with it (but probably not even then).
It's exactly the same for newspapers, except we just never think about it. But if only 10% of your audience consider your focus, your relevance, usefulness, quality and consistency to be designed for them, news is never going to feel that valuable, and you will always struggle to get people to pay.
So, here is what I want you to do:
Do this study for your publication. Ask people about how valuable, useful, relevant, and consistent they feel you are. And ask them whether they feel that the news you bring is made for them and the community that they are in?
The result of this study then defines what price level you can set.
Quick note about Netflix: I'm considering writing something about Netflix's latest troubles for my next newsletter. But overall, I'm not seeing anything interesting here. I wrote a quick Twitter thread the other day about why that is.
Over the years, I have written many articles about how we can create value for our subscribers. Take a look at:
Also, remember that while this newsletter is free for anyone to read, it's paid for by my subscribers to Baekdal Plus. So if you want to support this type of analysis and advice, subscribe to Baekdal Plus, which will also give you access to all my Plus reports (more than 300), and all the new ones (about 25 reports per year).
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"Thomas Baekdal is one of Scandinavia's most sought-after experts in the digitization of media companies. He has made himself known for his analysis of how digitization has changed the way we consume media."
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