Yesterday, the New York Times highlighted the success of the New Yorker app, one of my favorite magazines. 20,000 subscribers pay $59 per year for a digital subscription, a $1.2M business. One in five users buys a subscription an astounding 20% conversion-to-paid user rate.
The Times remarked, “It is surprising that Condé Nast’s biggest success has been The New Yorker and not, say, a magazine that has a more technologically stimulating app and a younger, more Web-oriented readership like Wired.”
After I read that statement, I wondered if it was broadly true – that younger users aren’t the best market for content subscriptions. So, I gathered some publicly disclosed data from various newspapers and magazines to better understand the market and graphed the results.
The Financial Times is a digital blockbuster. It generates nearly $100M in annual revenue. The FT was first to market with a paywall for web content, early to market with an iPad app, and first to market with a best-in-class HTML5 app. While being early in the market is great, it’s not the secret to success.
The NYTimes, WSJ, Times of London and the Guardian all have built fast-growing, meaningful digital subscription businesses by targeting an older demographic.
New Yorker readers are the hardcore gamers of the magazine world. They spend 78 minutes per week reading just this magazine. The 1.1M subscribers renew annually at 85%, best-in-class for the industry. The median income of a New Yorker reader is $161,877 – 77% greater than the median income across all news magazine subscribers, according to MediaMark Research. This subscriber demographic owns 49% of iPads.
Younger, hipper, Wired-reading users play freemium games on mobile phones. About 4% of them pay for single use time-savings and achievements in a game. On the other hand, the older, wealthier demographic is a much richer market for premium content subscriptions. They’re accustomed to paying for quality writing. So it’s no surprise at all that the stodgy New Yorker trounces Wired. In the end, success is understanding your user base.