READER REVENUE WHERE IS THE INUSTRY HEADING NEACE MAY 2019 NEACE 1215 Hightower Trail, A-100 Atlanta, GA 30350 www.mathereconomics.com

Evolution of paywall sophistication One size fits all Varied by geo or section Dynamic based on business rules Personalized based on propensity

WHAT IS THE RISK/REWARD OF A PAYWALL

Forecast tradeoffs of each scenario STATIC METER CONTENT PREMIUM INTELLIGENT BALANCED Inc. Monthly Page Views at Risk 1,171,534 3,499,579 1,122,239 Paywall Hits 50,084 1,116,050 48,228 Conversion Rate 0.37% 0.04% 0.36% Inc. 12-Months Total Conversions 3,468 7,582 3,486 Total Sub Revenue $378,064 $829,161 $378,654 Ad Revenue at Risk -$145,703 -$343,380 -$139,572 Net Revenue $232,361 $485,781 $239,082 Opportunity Cost from Ad Lite -$5,492 -$12,046 -$5,501 Dollar Tradeoff $2.59 $2.41 $2.71 Net Revenue per Sub $66.99 $64.07 $68.57

DIFFERENCES IN AUDIENCES REQUIRES PERSONALIZATION Avg. Per User per Month FLYBYS STABLE USERS ENTHUSIASTS FANATICS ALL USERS 6.9M 595K 340K 167K PAGEVIEWS 1.4 7.0 14.4 100.7 ARTICLE PAGEVIEWS 0.9 2.6 4.4 27.2 VISITS 1.1 5.0 26.2 TIME PER VISIT 02:17 06:57 07:40 06:41 SCROLL DEPTH 28% 50% 52% 62% AD REVENUE $0.01 $0.05 $0.12 $1.08 UNIQUE DAYS 2.1 3.6 9.5 % KNOWN USERS 0% 2% 5% 38% CONVERSION RATE 0.00% 0.22% 0.28% 0.73%

Propensity MODELS REFINE USER SEGMENTS 6

ACTUAL CONVERSION VOLUMES BY SEGMENT

Customer lifecycle ALIGNS WITH SEGMENT FIRST TIME USER REPEAT MEDIUM PROPENSITY ENGAGED HIGH PROPENSITY NEW SUBSCRIBER RETAINED SUBSCRIBER engage, register, newsletter acquire via paywall or email churn prevention, re-engagement, pricing

INTELLIGENT PAYWALL™ TOUCHPOINTS FIRST TIME USER On-site Welcome Messaging On-site Soft Calls to Action Newsletters REPEAT MEDIUM PROPENSITY Soft Calls to Action Registration for + Page Views Subscription Offer ENGAGED HIGH PROPENSITY On-site Aggressive Calls to Action Limit Access to Content Off-site Email Offers (known users) NEW SUBSCRIBER Welcome / Onboarding Emails Brand / Product Promotion Education Prior to First Renewal RETAINED SUBSCRIBER Timing-Based Brand / Value Promotion Behavior-Based Brand / Value Promotion Preference-Based Brand / Value Promotion Lapsed Subscriber Messaging

INTELLIGENT PAYWALL™ TOUCHPOINTS FIRST TIME USER On-site Welcome Messaging On-site Soft Calls to Action Newsletters REPEAT MEDIUM PROPENSITY Soft Calls to Action Registration for + Page Views Subscription Offer ENGAGED HIGH PROPENSITY On-site Aggressive Calls to Action Limit Access to Content Off-site Email Offers (known users) NEW SUBSCRIBER Welcome / Onboarding Emails Brand / Product Promotion Education Prior to First Renewal RETAINED SUBSCRIBER Timing-Based Brand / Value Promotion Behavior-Based Brand / Value Promotion Preference-Based Brand / Value Promotion Lapsed Subscriber Messaging

INTELLIGENT PAYWALL™ TOUCHPOINTS FIRST TIME USER On-site Welcome Messaging On-site Soft Calls to Action Newsletters REPEAT MEDIUM PROPENSITY Soft Calls to Action Registration for + Page Views Subscription Offer ENGAGED HIGH PROPENSITY On-site Aggressive Calls to Action Limit Access to Content Off-site Email Offers (known users) NEW SUBSCRIBER Welcome / Onboarding Emails Brand / Product Promotion Education Prior to First Renewal RETAINED SUBSCRIBER Timing-Based Brand / Value Promotion Behavior-Based Brand / Value Promotion Preference-Based Brand / Value Promotion Lapsed Subscriber Messaging

INTELLIGENT PAYWALL™ TOUCHPOINTS FIRST TIME USER On-site Welcome Messaging On-site Soft Calls to Action Newsletters REPEAT MEDIUM PROPENSITY Soft Calls to Action Registration for + Page Views Subscription Offer ENGAGED HIGH PROPENSITY On-site Aggressive Calls to Action Limit Access to Content Off-site Email Offers (known users) NEW SUBSCRIBER Welcome / Onboarding Emails Brand / Product Promotion Education Prior to First Renewal RETAINED SUBSCRIBER Timing-Based Brand / Value Promotion Behavior-Based Brand / Value Promotion Preference-Based Brand / Value Promotion Lapsed Subscriber Messaging

INTELLIGENT PAYWALL™ TOUCHPOINTS FIRST TIME USER On-site Welcome Messaging On-site Soft Calls to Action Newsletters REPEAT MEDIUM PROPENSITY Soft Calls to Action Registration for + Page Views Subscription Offer ENGAGED HIGH PROPENSITY On-site Aggressive Calls to Action Limit Access to Content Off-site Email Offers (known users) NEW SUBSCRIBER Welcome / Onboarding Emails Brand / Product Promotion Education Prior to First Renewal RETAINED SUBSCRIBER Timing-Based Brand / Value Promotion Behavior-Based Brand / Value Promotion Preference-Based Brand / Value Promotion Lapsed Subscriber Messaging

A/B TESTING IMPLEMENTED HIGH PROPENSITY MEDIUM PROPENSITY LOW PROPENSITY 5. 6. Soft Email 7. 9. 10. 11. Hard Wall 8. Soft Email 2. Soft Email 4. Soft Email 3. 1. Content Suggestion A B A B 1. Welcome Whisper 1. Welcome Whisper 1. Welcome Whisper 1. Welcome Whisper 2. Soft Newsletter CTA 2. 2. Content Suggestion 2. EDU 3. Hard Wall 3. Soft Newsletter CTA 3. 3. 4. 4. Soft Newsletter CTA 4. Soft Newsletter CTA 5. 5. Hard Wall 5. 6. Hard Wall 6. Content Suggestion 7. 8. Content Suggestion 9. 10. Soft Newsletter CTA 11. Hard Wall

TESTING IN PROGRESS B B A A 11,028 4,022 3,647 2,237 2,242 18,600 HIGH PROPENSITY CART ABANDONMENT A B A B TOTAL Cookies 11,028 4,022 3,647 2,237 2,242 Modals 18,600 5,865 5,354 3,712 3,669 Conversions 23 10 3 Conversion Rate 0.19% 0.25% 0.27% 0.13% 0.0% Visits per Cookie 2 Time per Visit 02:16 02:27 02:36 01:54 01:57 Ad Revenue $826 $280 $257 $152 $139

MARGINAL EFFECTS OF ENGAGEMENT Content categories and authors (last 28 days) Visits (per week) Days since last visit Page views and time onsite (per day/page)

PAYWALL HITS BEFORE CONVERSION Over 80% of conversions occur by the 10th paywall hit. 6.8 On average, users hit the paywall almost seven times prior to converting

SUBSCRIBER ACQUISITION MUST BE HOLISTIC The subscribe button and email channels are equally important The print product should be promoted proudly alongside digital

PRICING IMPACT BY ENGAGEMENT

WHAT CONTENT LEADS TO CONVERSION Category Page Views PV with Path to Conversion Paywall Hits Conversions Unique URLs PTC / PV PTC / URL Crime 3,398,462 11,784 288,725 205 12,272 0.35% 1.0 News 846,627 2,129 61,205 120 3,757 0.25% 0.6 Politics 1,121,271 6,020 71,777 111 5,328 0.54% 1.1 Columnists 886,525 3,787 50,746 3,502 0.43% Baseball 1,060,046 3,614 83,589 74 2,061 0.34% 1.8 Entertainment 1,051,370 2,987 47,259 71 6,183 0.28% 0.5 Football 971,367 4,815 103,240 70 1,922 0.50% 2.5 Opinion 281,260 2,209 24,797 62 2,500 0.79% 0.9 Community 430,391 2,127 33,426 61 454 0.49% 4.7 Sports 756,506 1,769 47,787 60 3,864 0.23%

DATA REQUIREMENTS FOR SUCCESS Customer-level engagement detail (anonymous and known) article page views, visits, time per visit, ad revenue, content preference Conversion rate by channel, product, audience segment, point in checkout funnel Subscriber data linked to key points above (offline data) retention, cost per acquisition, engagement, price, tenure

USER EXPERIENCE BEST PRACTICES Site design, page weight, quality ad units Reduce friction in checkout process Newspapers should think of themselves as an ecommerce company with long term customer relationships Use external platforms deliberately and on your terms

WHAT IS NEXT? Digital revenue yield management – Managing customer lifetime value through personalized relationships = Mass Personalization; How do we monetize? Recursive prediction, testing and improvement of touchpoints – A/B testing, Validating predictions with observations; Machine learning/AI, Econometrics Product innovation – Content bundling and packaging to attract and retain subscribers. Article lifetime value. Subscription fatigue? Do not know yet

A HOLISTIC APPROACH WORKS BEST Advertising $$ Subscription $$ Renewal $$ Retention $$ Print $$ Digital $$ Acquisition Retention

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