Economissed

and are sports fans willing to pay more?

I had thought about opening up this week’s newsletter with a reference to the football, but it’s just too painful. Thankfully there was a world of subscription stories to get lost in. This week we take a look at:
- the real competitive landscape - the battle for attention
- can you get people to pay more once they’re already a subscriber
- my experience in cancelling The Economist
- and much more

Economissed

Until last week, I had always admired The Economist - the sharp writing, the witty headlines, the creative acquisition marketing campaigns. In a previous edition of this newsletter I’ve covered The Economist’s approach to onboarding which I thought was excellent. So it may come as a surprise that last week I cancelled my subscription. I signed up earlier in the year to a trial offer subscription (I used to be a subscriber a few years ago). This renewed last week, at full price for another six months. I only noticed as the charge came through on my credit card.

I hadn’t wanted to renew, although the content is great I realised I was only reading one or two articles per week. Copies were piling up without being read and I was barely accessing the app. At £5 per week, it felt expensive. I missed the renewal date, although I didn’t get a reminder - my fault.

My expectation when I went to The Economist website to cancel was that it would be easy. There was a cancel subscription link, but when I clicked on it I had two options either to call or cancel via chat. At that moment I didn’t have time for a call or to engage with a chat.

The next day I bit the bullet and went for the chat option to cancel. I started the chat and found out I was number 7 in the queue. I waited, trying to get on with other work in the meantime. Slowly I moved up the queue. Just as I was reaching the number 1 slot, I had to take a call, I abandoned the chat. Later I tried another chat session, I started at number 6 in the queue. 25 mins later I got to chat to someone (I don’t think it was a bot).

By this point I was pretty annoyed, not only had I bought something I didn’t really want. I was now wasting more time having to cancel. The chat tried to retain me as a subscriber and actually made a generous offer of extending the subscription until December, effectively making it half price. At this point I “cut off my nose to spite my face” by refusing the offer. I wasn’t thinking logically because I was so angry at the experience and disappointed it was coming from a brand I respect.

Since the cancellation The Economist has followed up with an exit survey. A nice move, unfortunately it was generic so unlikely to provide any meaningful information.

I also received the email below:

I actually flagged this to follow up as I thought they were making the same offer they had in the chat and I could respond more rationally, this time. But on a closer read I’m now confused. They acknowledge I’ve cancelled my subscription, but then say I can extend my trial(?) and pay half the price they just charged me for an additional three months. I’m happy to concede that I may be misinterpreting this. What really strikes me is that the email isn’t consistent with the brand - where is the wit and inventiveness? More importantly it feels generic - with all the data The Economist must have on my engagement, this could be a highly tailored email.

My experience in cancelling The Economist is similar to my New York Times cancellation - maybe this is a legacy media issue, which is no excuse. The cancellations process is important and consumers know it doesn’t need to be difficult.

Everyone is competing for user attention

Instagram is trying to be TikTok with its Reels product, TikTok is extending the length of its videos to be more like YouTube. Every platform is trying to gain more of the users’ attention. Attention equals advertising revenue or recurring revenue through subscription.

Last year Netflix listed TikTok as a competitor for the first time (it passed 3 billion downloads this week), recognising that the business they are really in is that of gaining and holding the user’s attention - not film or TV. In this article from Alex Sherman on CNBC he succinctly captures the developing competitive landscape, a few points to note:

  • As more “television” is delivered over the internet on any device, lines between traditional media companies and digital platforms are blurring

  • One key differentiation is the nature of the content - Twitch, TikTok, YouTube and Instagram have been built on user generated content vs commissioned content. The former is no less engaging and although normally shorter no less professional

  • The binary labels of TV or social media are mis-leading - legacy media companies and the likes of Instagram are sources of entertainment for users

  • This blurring of industry lines will have an impact on consolidation and competitive concerns - does it matter if two large studios merge if movies make up only a fraction of viewing time

The battle for users’ attention is only going to become more intense. Although the form eg words, audio or video can vary, to be successful companies will have to work hard at first gaining the customer attention and then delivering an experience that keeps them coming back.

Are sports fans willing to pay more?

According to research by Antenna, a measurement and analytics company, ESPN+ users who also purchased a PPV event were significantly less likely to churn (see charts below).

What might this behaviour mean?

  • The users who also go on to purchase a PPV event are actually super users or in this case super fans who are going to be far less likely to cancel anyway?

  • There is room to increase base pricing for the subscription?

  • Tactically it makes sense to have a low base price and then identify super users and introduce products just for them to generate additional revenue.

You can read more here and Antenna have said they will continue to monitor for this type of behaviour.

SaaS sites - design trends

Software as a service (SaaS) companies mostly operate a subscription model - we’ve looked before at their approach to pricing tiers. In this piece 100 SaaS sites are reviewed to see how they approach design. The findings are worth considering for any subscription business:

  • There is an emerging standard design in SaaS sites - this might seem to negate the benefit of branding, but provides users with signals which build trust and security

  • 54% of the sites use video on the homepage - maybe a growing trend and useful in explaining a service

  • There is always (90%) a primary call to action above the fold with 37% of these on the right hand side - the dominant call to action is for a free demo

  • 94% of these sites have a light background - interesting that Disney+ and Netflix are both dark sites

  • 70% of the sites use custom illustrations - is there something going on here in terms of simplification to help the user?

There is a lot more covered in the article, read more.

Quick links

Email is a vital communication channel for any subscription business - Just Good Copy is a growing resource of some of the best emails out there across the whole customer lifecycle from welcome emails to a cancelled subscription.

USA Today is joining the subscription party - but is it too late? 90 million visitors a month is a decent top of funnel to work with and the possibility of bundling with Gannett’s local properties is interesting. The key might be doing what they originally did in print - differentiating the way they presented the news.

“Black Widow” generated a post-pandemic high $80 million at the domestic box office, but more importantly it also delivered $60 million from sales through Disney+ Premier Access. Letting customers choose how they want to watch looks like a smart move.

Bokksu a Japanese snack subscription box is featured by Exploding Topics. In 2016 they had just 40 subscribers, today they have 20,000 generating $4.8 million in revenue. McKinsey estimates that the subscription box market is worth $15 billion - but at the moment it’s crowded and fragmented. Beauty subscription boxes are generating a lot of traffic with over 216 million visits a year.

Statista have some interesting data on US subscription box expenditure (I can’t see the source as I don’t have a subscription) spending on Food and meal kits leads the way at $74 per month, looks like there is plenty of opportunity for growth in “personal care and beauty” where the monthly spend is $34 per month - see the chart below.