RZ Ep.41: Lokesh Tiwari - Newsmax's Rapid Transition to Paid Streaming: Lessons in Scaling and Retention

For episode 41 of Retention Zone, I sat down with Lokesh Tiwari, Chief Information Officer at Newsmax, to discuss the company's recent transition from a free to a paid streaming model. With over 15 years at Newsmax, Tiwari offered valuable insights into the challenges and strategies involved in this significant shift.

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Newsmax's Growth and Transition

Newsmax, founded in 1998, has grown into a major player in the conservative news space. Tiwari highlighted the company's impressive reach:

"Nielsen ratings rank Newsmax as the fourth highest rated cable news channel in the United States. We have over 21 million viewers that watch the channel regularly, over 17 million social media followers, over 12 million app downloads so far."

The decision to transition to a paid model came as Newsmax established itself as a "news powerhouse." This move allowed the company to reinvest in content quality through affiliate fees. However, to maintain accessibility, Newsmax launched Newsmax+, a subscription service, alongside Newsmax2, a free channel with different programming.

Rapid Launch and Scaling

One of the most remarkable aspects of Newsmax's transition was the speed of implementation. Tiwari and his team launched Newsmax+ in just three weeks, a feat made possible by careful vendor selection and a dedicated team effort. Within the first month, they attracted 150,000 paying subscribers.

This rapid scaling brought its own challenges, particularly given Newsmax's demographic:

"Our demographic, which is heavily 55+ in age group. So sometimes technology can be a challenge, so we have to make sure that they understand how to use service even if they received the service and purchased it."

To address these challenges, Newsmax expanded its customer service and created a comprehensive help center.

Retention Strategies

Tiwari emphasized the importance of providing value beyond just content:

"Content is one thing where we are bringing them the opinion and the news, the special coverages, documentaries, events that are really important for our viewers. But then you have to make sure that the viewer is also aware of the value they are getting out of the service."

Newsmax uses its extensive email and push notification subscriber base to keep users informed about breaking news and the value of their subscription. However, Tiwari stressed the importance of balance:

"You have to make sure that you don't overplay it where you are just putting it as a money-making marketing platform. The value always has to be the user first and the business second."

User Experience and Data Analytics

While content remains crucial, Tiwari highlighted the critical role of user experience in retention:

"Apart from content, you have to make sure the ease of usage is very, very important. You cannot overrun user with content, and then the people are like, I don't know what to watch. I'll just move away from it. So there has to be a balance."

Newsmax also leverages data analytics to inform its retention strategies, analyzing why users cancel and using this information to improve their service.

Future Plans

Looking ahead, Newsmax aims to become a comprehensive news hub, expanding beyond politics to include health and finance content. The company also has plans for international expansion, potentially including content in different languages.

Key Takeaways

1. Transitioning from free to paid requires careful planning and execution, even under tight timelines.
2. Rapid scaling necessitates robust customer support and user education, especially for older demographics.
3. Retention strategies should focus on continuously demonstrating value to subscribers.
4. User experience is as crucial as content in maintaining subscriber engagement.
5. Data analytics play a vital role in understanding and addressing subscriber needs.
6. Diversifying content while maintaining core focus can help mitigate potential subscriber fatigue.

Newsmax's journey offers valuable insights for any content provider considering a transition to a paid model. Their focus on understanding their audience, providing value, and maintaining a balance between content and user experience has been key to their success in the competitive streaming landscape.

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Retention Zone is hosted and produced by Carlo De Marchis (A guy with a scarf)