NewsBeat

8 NewsBeat August 2019 Medill study identifying 'Paradigm Shift' in how local news serves readers A s online advertising lags, many local news organizations are shifting their strategy to focus on reader-based revenue models, especially digital subscriptions, as a path to financial sustainability and greater community service. That pivot is redefining the goals for many news outlets. Rather than chasing viral "clicks" to boost ad revenue, they are trying to establish their value to subscribers. New strategies require new insights into local digital audiences. That's why a major new Northwestern University analysis of reader and subscriber data from three big-city news websites asks a more nuanced and essential question: What behaviors make readers willing to pay? The researchers' answer: News organizations must get their readers into a regular habit to keep them as digital subscribers. The study showed that frequency of consuming local news is the single biggest predictor of retaining subscribers—more than the number of stories read or the time spent reading them. "This research illustrates a sea change in the relationship between local news organizations and their readers," said Tim Franklin, a senior associate dean at Northwestern's Medill School of Journalism, Media, Integrated Marketing Communications. "As the industry moves to a business model more focused on digital subscriptions, local news organizations need to create a value proposition for readers that leads them to become frequent, daily consumers of their news and information. "Our data analysis shows that in this new era for local news, metrics like page views and time spent on articles – two commonly cited benchmarks – are not nearly as important as the number of readers who are frequent users. With that knowledge, the question then becomes: What are the tools and types of news and information that local outlets can generate to grow a daily reader habit?" said Franklin, former president of The Poynter Institute and a former top editor at the Indianapolis Star, Orlando Sentinel and Baltimore Sun. Franklin heads the Medill Local News Initiative, a project that includes this new study and other research to help local journalism overcome the industry's current crisis. Medill partnered with three news organizations—the Chicago Tribune, Indianapolis Star and San Francisco Chronicle—that provided 13 terabytes of anonymous reader and subscriber data. Medill's Spiegle Research Center conducted the analysis, which was presented to the three "learning lab" news organizations at a Northwestern conference in December. The news outlets will continue to work with Northwestern this year, and Medill's Knight Lab will use the research findings to help create new digital tools and products to bolster local news. In the new Medill study, researchers measured what they call "stickiness" (how likely a subscriber is to remain a paying customer) and "churn" (subscribers opting out). While the study's main finding was that a regular reader habit is essential for stickiness, it also identified consumption of unique local content as a key factor in retaining subscribers. Establishing expertise on subjects of deep interest to readers is a clear roadmap to generating reader revenue, according to the research. Spiegel's data analysis also contains a puzzling surprise: Subscribers who read many stories per visit and read them thoroughly were no more likely to keep their subscriptions than those who skimmed. In some cases, high rates of story reading and time spent per story were associated with greater churn – people dropping their subscriptions. The reasons for this possible paradox are not clear, and more research is required. Along with Northwestern's specific findings, the very nature of the research approach is significant. By concentrating on subscriptions instead of page views, the study reflects a major strategic transformation, said Tom Rosenstiel, Executive Director of the American Press Institute. "What you're talking about here in this research is really a paradigm shift," Rosenstiel said. "… 'My customer is the consumer, and that's where I get my revenue,' as opposed to 'my customer is the advertiser and I'm leveraging my readers to these advertisers.' It's a big shift, a huge kind of shift in mission." Franklin is optimistic that such a shift will not only be the smartest path to financial stability but will also encourage quality, service- oriented journalism. "I actually think this is a healthier business model for local news organizations Building Habit—Not Page Views—Matters Most For Keeping Subscribers, Data Analysis Finds By MARK JACOB "What you're talking about here in this research is really a paradigm shift. … 'My customer is the consumer, and that's where I get my revenue,' as opposed to 'my customer is the advertiser and I'm leveraging my readers to these advertisers.' It's a big shift, a huge kind of shift in mission." — Tom Rosenstiel, Executive Director of the American Press Institute Subscribers who read many stories per visit and read them thoroughly were no more likely to keep their subscriptions than those who skimmed. NYPA fall publishers'conference:

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