transformation case study peter doucette€¦ · transformation case study a potential path to a...
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Transformation Case StudyA potential path to a sustainable business
model through digital subscriptions
Peter Doucette
Chief Consumer Revenue Officer
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About The Boston Globe
The Boston Globe is a 26-time Pulitzer Prize winning news source featuring premium national and local
content daily. With the largest newsroom in the region, The Boston Globe provides more news, analysis
and information about community events, sports and entertainment than any other local news source.
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Outline
● Historical context
● Current performance
● Future outlook
Discussion areas
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Historical Context • Digital audience trends
• Digital revenue trends
• Total subscriber trends
• Business model evolution
• Subscriber demographics
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6
Boston.com
2011
9mm Monthly visitors
Glo
be.
co
m
Boston.com
Globe.com
2014
Globe.com
Boston.com
Note: bubble size represents monthly unique visitors
2017
15mm Monthly visitors
Digital Audience Trends
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7
3326
20
210 21
0
5
10
15
20
25
30
35
40
45
2011 2014 2017
An
nu
al
Reven
ue (
$M
Ms)
Advertising Consumer
Growth in Digital Revenue Digital subscription
revenue surpassed
advertising in 2017
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8
266
224195
16
5690
100
120
140
160
180
200
220
240
260
280
300
2011 2014 2017 YTD
Su
bscri
ber
Vo
lum
es (
000s)
Print Digital
Growth in Total Subscribers
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9
2012
2013
2014
2015
2016
0
10,000
20,000
30,000
40,000
50,000
60,000
(600)
(400)
(200)
0
200
400
600
800
1,000
1,200
1,400
1,600
*Subscriber count does not include ePaper or group subscriptions
Hard
paywall
Meter
10
Meter
Broken
Meter 5
45 DayMeter 2
Incognito
2017
Pay-model changes have lead to continuous digital sub growth
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Print Subscriber Demographics
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Digital Subscriber Demographics
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Current performance • Pay model rules
• Subscriber value & retention
• 45-day change
• Private browsing
• 2-article meter
• Pricing
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Globe does not allow any paywall exceptions
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Newsletters and email marketing are critical to digital sub growth
On pace to surpass
1.1 billion emails
deployed in 2017
There are 1.5M unique
and active daily
newsletter
subscribers
Site visitors that are
know have a
conversion rate of
10X that of
anonymous visitors
1.1B 1.5M 10X
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Digital subscribers acquired from email have highest engagement
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Email subs engage at 10% higher than those from pay wall
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Subscriber revenue includes e-reader revenue
Ad revenue based on $409k per month (56.5% non-subscriber, 43.5% subscriber, based on PV allocation of Logged In vs Logged Out)
75%
14%
11%
Subscriber Revenue Non-Subscriber Ad Revenue Subscriber Ad Revenue
Digital subscribers generate 86% of revenue for BostonGlobe.com
Subscriber have
surpassed the 50%
mark in monthly
Page Views
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• On an average day, 45% of digital subscribers
visited the site.
• ~18% of digital subscribers did not visit the site
last month.
• If each subscriber moved up one engagement
bucket, we would have ~1,700 additional
subscribers a year from today.
*Based on May 2017 site usage data 18
Most digital subscribers are either highly or very low engaged
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• The correlation between site usage and
retention is a linear, 1:1 relationship.
• Subscribers who use the site on 90 – 100% of
possible days have a one year retention of
87%, 3x that of our least engaged segment.
*Based on May 2016 site usage data 19
Linear relationship between engagement and retention
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Decreases in our weekly stop rate have helped spur digital subscription growth.
20
Digital cancellation rates continue to decline as our base grows
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2017 will be the best year for digital sub growth in our history
We are trending to
grow about 35%
YOY and expect to
finish the year close
to 100K subs
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Non-subscribers have an individualized 45 day window to sample
content
45-day cohort accounts for:
● 8% of non-sub visits
● 25% of paywall visits
● 20% of new paywall subscribers
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Private browsing is no longer a paywall exception
Private browsing stats:
About 6-8% of our
audience browses privately
We convert about 7-10
new digital subs per day
that are in incognito status
No impact on advertising
Support in marketplace
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-
5.0
10.0
15.0
20.0
25.0
Meter 1 Meter 2 Meter 3 Meter 4 Meter 5 Meter 6+
Un
iqu
e V
isit
ros
(MM
s)
Unique Visitors by MeterQuarterly Data
Q4 2014
Q1 2015
Q2 2015
Q3 2015
Q4 2015
Q1 2016
Q2 2016
Q3 2016
Q4 2016
Q1 2017*
24
We chose a 2 article meter because of scale and consistency
of user behavior over time
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Impact of 2017 changes
• Roughly 15% of visitors are challenged with a
paywall each day. That is up from about 4-5% last
year
• Conversion rates have remained relatively
consistent
• We have sold about 40K new digital subscriptions
YTD
• Subscriber cancellation rates continue to decline
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Over 50% of our digital subs are greater than 1 year and are
paying $0.99 per day
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
0 to 3 mos 3 to 6 mos 6 to 9 mos 9 to 12 mos 1 Year Plus
Vo
lum
e o
f su
bscri
bers
Subscriber Tenure
Distribution of digital subs by tenure
$0.57/dayIntro
$0.99/day
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Future Outlook • Vision
• Globe revenue breakdown
• Required digital revenue
• Paths to digital-only
• Integrating digital assets
• Resource alignment
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• We are, first and foremost, a consumer-revenue driven business that serves and grows our paid-customer base with; quality journalism that adheres to our mission, products worth paying for, and technology that allows us to capture and retain those customers.
• We are, secondarily, a business focused on attracting and retaining premium-advertising clients to whom we offer a highly engaged and loyal audience.
• And, finally, we serve as a convener in our community, one always striving to be a relevant and estimable marketplace of ideas, products, services, and bulletins.
28
Vision
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Globe revenue breakdown
$40M
$240M185K print subscribers
90K digital subscribers
revenue
Digital
revenue
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Digital revenue breakdown
$40M$70M
($35M in newsroom costs)
$30M
Cost to run a digital-only
news operationDigital revenue Gap
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2021 ProjectionScenario 1 Scenario 2 Scenario3 Scenario 4
BAU Aggressive HD PricingAggressive move to
digital Digital Only
Digital Subs 200,000 200,000 200,000 200,000 Revenue $70,000,000 $70,000,000 $70,000,000 $70,000,000
Print Subs 143,000 120,000 75,000 -Revenue $70,000,000 $86,000,000 $54,000,000 $-
Total Subs 343,000 320,000 275,000 200,000 Revenue $140,000,000 $156,000,000 $124,000,000 $70,000,000
Strategic paths to get to a digital-only world
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Anonymous Known Subscriber Total
Globe.com 6.8mm 1.1mm 175K 8mm
Boston.com 5.8mm 0.1mm 0.1mm 6mm
Email 0 1.9mm 0.1mm 2mm
Statnews 1.0mm 0 1.1K 1.0mm
Total 13.3mm 3.1mm 0.3mm 16.5mm
From:
To:
200K Digital Subs
Subscriber 0.5mm
Known
7m
Anonymous 15mm
Potential Tactics:
• Hard registration wall on
Globe.com could scale
anonymous to known users
• Stub Globe content on
boston.com to drive referrals
and registrations on Globe.com
Data fact:
• Known visitors convert at 10X
the level of anonymous users
32
Moving from disparate digital assets to an integrated customer journey
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Creating a team structure that is focused on legs of customer journey
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Digital revenue breakdown: Consumer Only
$21M$70M
($35M in newsroom costs)
$49M
Cost to run a digital-only
news operation2017 Gap
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Digital revenue breakdown: Consumer Only
$28M$70M
($35M in newsroom costs)
$42M
Cost to run a digital-only
news operation2018 Gap
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Digital revenue breakdown: Consumer Only
$36M$70M
($35M in newsroom costs)
$34M
Cost to run a digital-only
news operation2019 Gap
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Digital revenue breakdown: Consumer Only
$36M$70M
($35M in newsroom costs)
$34M
Cost to run a digital-only
news operation2019 Gap
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Digital revenue breakdown: Consumer Only
$70M$70M
($35M in newsroom costs)
$0M
Cost to run a digital-only
news operationTBD Gap
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Questions?