Deciding how much to charge customers to subscribe to a news product can be difficult. Charge too much and and there aren’t have enough takers; but charge too little, and there isn’t enough revenue.

Bild/Axel Springer in Germany has done extensive testing to see what works and discovered that, like many other aspects of a subscription service, pricing structure can evolve and change.

In 2013, Bild had a separate offer page on its site with three different offers, according to Daniel Mussinghoff, director of premium for Bild.

“What we learned throughout the years was to keep it a lot simpler,” he said. To simplify, they completely ditched the option to add something else to the cart for €2.99.

“We decided to include this expert benefit in the basic main product without charging more for it,” Mussinghoff said. “It was helping reduce churn and driving engagement for those customers.”

Testing offers

Bild took it a step further and eliminated two products that targeted a small niche of customers. When it did A/B tests on the offer page, Bild found it wasn’t worth the potential revenue uplift gained by those higher price points; the company actually made more on conversions with fewer products. It then created an offer page where just one product was presented to the customer, and soon after that, made another cut.

“We took it one step further last year and got rid of the offer page itself and the checkout process and placed the offer right on the article,” Mussinghoff said. “We get most of our new subscribers through daily articles on our Web site, through headlines that sell. The less we distract them, of course, the faster they go through the checkout and back to the article they want to read.”

Bild still sells bundles and yearly subscriptions and upsells customers once they are on board. Mussinghoff suggested trying to see how a group of subscribers who pay €4.99 react to a price increase to €7.99. 

“You can see if those churn rates are within a margin that is acceptable to you,” Mussinghoff said.

He also recommended trying different groups and different methods of communicating with those groups to explain the price increase. But he said to be careful with how this is done since studies suggest readers get more upset by long-form explainers about why their subscription prices are increasing. Mussinghoff said to test before going this route.

When Bild decided to increase pricing from €4.99 to €7.99, it saw an increase in churn at first. But Mussinghoff said it was worthwhile in the long run, as a significant portion of subscribers moved from €4.99 to €7.99 and it was able to increase revenue over time.

Creating consistency

Media companies must realise how difficult it can be to make sure pricing is consistent, Mussinghoff said. This can be especially challenging on the technical side. 

“We want to make sure only potential customers are seeing this price offer,” Mussinghoff said. “If you are an existing customer, of course, you’re targeted differently and won’t see this offer.”

Bild makes sure existing customers don’t see any promotions and instead uses the ad space in other ways.

“We try to drive engagement by promoting newsletters and video content, promoting exclusive content, and promoting upselling opportunities,” Mussinghoff said.

Bild also ran “willingness to pay” tests to see if there was a big difference in subscribers willing to pay €3.99 a month versus €9.99. Bild saw the same amount of new subscribers at both price points, Mussinghoff said.

“So you can see if you have great content, the willingness to pay might be higher for this content, and you can charge a lot more and still get the same amount of users. So you increase your revenue,” Mussinghoff said.

This can go both ways. News publishers can also drop prices to get highly engaged users to subscribe, Mussinghoff said. Bild has looked at free 30-day trials for people engaging on social media and offered some content not in a paywall on other sites.

When Bild changed its “trial to basic pricing” structure from €.99 for the first month and then a basic price of €3.99 to €3.99 for the first year and then a basic price of €7.99, revenue and retention got worse before it got better. However, after 12 months it saw better retention, even at the higher price point.

“Simple takeaway: more subscribers within your subscriber base, more revenues overall, so that was something we were very happy with after this new intro pricing we introduced.”

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