Discover why monthly subscribers may offer greater flexibility, pricing power, and growth potential. Refine your strategy by understanding the nuances of acquisition, retention, and revenue trends to maximize subscriber value.
- Ease of acquisition (i.e. acquisition take rates)
- Pricing power and flexibility
- Subscriber retention
- Subscription revenue / volume growth
According to data across these areas, monthly subscribers may be the most valuable subscribers a publisher can have.
1. Ease of acquisition
A key challenge for publishers is choosing the right subscription term. Consumers favor monthly plans, with new monthly subscriptions outpacing annual ones 5:1.
71% of new digital subscriptions are monthly, compared to 14% annual. Monthly subscriptions tend to increase with higher pricing.
> Customer-centric pricing strategies: Realizing the true value of your audience
2. Pricing power & flexibility
For smaller media companies, raising prices is key to sustainability. Monthly subscriptions offer greater flexibility and drive higher ARPU, with $12.64 per month compared to $7.36 for annual subscribers, contributing more to long-term revenue.
Case study: The Boston Globe's Monthly Subscription Success
In 2023, The Boston Globe reached 245,000 digital-only subscribers, showcasing the power of a well-executed monthly subscription model.
Their strategy: an extended introductory offer—$1 for six months. Later transitioned to around $30 per month.
The outcome: monthly conversions consistently outperformed annual plans, maximizing revenue through high conversion rates and strong long-term value, according to Ryan McVeigh, Senior Director of Consumer Revenue.
Key learnings: The Globe credited their success to rigorous testing and a strong focus on engaging subscribers and showcasing value during the introductory period.
3. Subscriber retention
Mather benchmarks show that annual subscribers have better retention in the first year compared to monthly subscribers. However, by year two, the retention gap narrows to just 5%, indicating that the initial advantage of annual plans levels out over time.
> Understanding subscriber loyalty and churn risk: inside Hearst US' innovative scoring system
4. Subscription revenue / Volume growth
Monthly subscribers drive 1.7 times higher ARPU than annual subscribers.
While annual subscribers are relatively less price-sensitive, they require significant discounts, contribute less to ARPU, and are fewer in number, limiting potential revenue gains from focusing solely on annual plans.
Recommendations
- Optimize you subscription mix for growth
We'd recommend a mix of 50% monthly subscribers at the full rate, 25% on introductory offers, and 25% on annual terms to maximize revenue and subscriber growth.
- Leverage the powerful LTV framework
We recommend using lifetime value (LTV) as the guiding metric for crafting go-to-market offers. By focusing on LTV, publishers can optimize pricing, acquisition, and retention strategies to balance revenue growth and subscriber retention. This data-driven approach ensures a long-term, sustainable model, maximizing both audience engagement and profitability.
- Test test test!
Continuous testing is essential for optimizing introductory offers. A/B testing enables publishers to experiment with various pricing levers and terms to identify the most effective strategies for their market.
