So, Matt Lindsay, what do you do?
I’m president of Mather Economics. We do a lot of work with media companies on customer analytics, things like predictive analytics about pricing, about the propensity to subscribe, about the lifetime value of a customer, and customer segmentation.
And how did you get into the business with media?
I was a consultant at Arthur Andersen and did a project with Knight Ridder in early 2000s about their business. And when Arthur Andersen foundered, I decided to become an independent consultant. I did a few consulting projects outside the (media) industry when Knight Ridder asked me to do a project with them. The problem they wanted to solve was that their subscription levels—this was the very early 2000s—were starting to show disruptions. In the course of that project I learned a lot abut subscriptions—and found it fascinating.
Fascinating? How so?
To an economist, the economics of subscriptions are interesting. In most industries, the customer relationship is a single event—but the subscription relationship is an ongoing relationship. It raises issues of, how do I quantify a subscription? We’re giving an incentive to subscribe, and then we’re trying to get (customers) to pay (more).
What was your insight into that relationship?
That newspapers had a lot of data—but weren’t using it fully. They were using it only to sell to advertisers. But once you get into the data, not surprisingly, you could find who is likely to subscribe.
Well, take me. I’m a subscriber to the print New York Times and Chicago Tribune. How do you identify me?
Essentially, we have two types of data we can bring to bear. There’s the experience that publisher has with you as a customer: When did you start subscribing? How do you get (the paper)? Do you pay a monthly bill or by EZ Pay? The second type of data is the data they can append to you. Now, that’s not usually household data. But what we’ve really found is Zip code-plus 4 or census data that that is sufficient to differentiate high demographics and low. We’re not trying to figure out anything about (individuals).
As a result of all the data analytics Mather does, do you have recommendations on digital products that will work?
Absolutely. With digital access, we can know what you’re interested in. In the print platform, it was pretty much a bundle of content. That’s why everyone got the same four sections: news, sports, lifestyle and business. But if you put a paywall on digital, you really have to change the value proposition to make them subscriber. It’s all about the user experience, the number of ads on the page, the mix of content. What we’ve been doing is looking at the audience (a newspaper) has, and what we tend to find is the vast amount of digital revenue comes from a small percentage of that audience. So (we recommend how to) re-prioritize and reallocate to what your core audience wants.
Do you ever worry that this turns the newspaper into an elite product?
I don’t, actually. The magic of the newspaper is that they have that trust of the community. And the way they maintain that trust is doing investigative journalism, and the news (the community) wants. What they really have to do is find those people who are super-engaged with that community, and that’s really the halo effect of the brand. That lends credence to the restaurant reviews, the local news, and all the rest of that good stuff.
So it sounds as if you’re optimistic about the future of newspapers.
It is a tough industry, and as a consultant there are different emotions I have about the industry. Sometimes, I am concerned, but what motivates the people in this industry—and me—is that it’s such an important industry. Sure, I could probably make more money as a consultant for a cable company. But nobody thinks deeply about their cable company the way they care about their newspaper. Newspapers are going through profound change, enormous change. But what I see now is they are starting to move from a defensive to an offensive posture.
So much of the economics of newspapers is still tied to print business. I don’t think anyone has solved the local regional digital proposition. I think there will probably always be some print element of the business—mainly because I feel that’s what differentiates that product in local newspapers. Maybe they will become weekly (in print) but I do feel there will be print products.
Well, we haven’t talked yet about the most important collaboration between Inland and Mather: Publisher Benchmarks, which became a next generation version of Inland’s longtime National Cost & Revenue Study.
The Publisher Benchmarks digital product was developed about three or four years ago. We wanted to help Inland digitize the PBM product and make it easier for publishers to submit their data. Publisher Benchmarks is an industry staple, and we were honored to help Inland update the product. The collaboration with Inland was something we enjoyed, and we still enjoy working with them and the participants in the study. The data captured and reported is unique in the industry, and we often get questions that the data is able to help answer.
We updated the online product a year ago to move it into Tableau, a data visualization tool that was easier to update and maintain than the custom-built tool originally developed.