Subscriptions are everywhere. Monthly payments to Netflix, Spotify and Amazon Prime have become staples over the last decade, keeping our entertainment needs in-check through endless amounts of content. But what’s next for the subscription-based economy? Our answer: news (and a lot of it.)
The New and Improved News
News media, after years of reliance on advertising and one-off sales, is beginning to make waves in the subscription economy. The consensus that people are unwilling to pay for news is slowly changing. Previously readers would refuse to pay for news when they can get it elsewhere for free. But over the last 20 years the competition for eyeballs has led to an unprecedented rise in ‘clickbait’ titles and fake news. This gives trustworthy news publications the opportunity to charge for an increasingly hard to find product: high-quality, reliable content.
It’s no surprise then that the most trusted sources are growing their subscriptions fastest, such as the Economist and the Financial Times. Conversely we’ve seen Buzzfeed, one of the least trusted sources, stall its IPO indefinitely after missing revenue forecasts by over 20%. In this decade more than ever, reliability is rare - and consumers are willing to pay to find it.
The Times they are a-changing
Literally – and fast. The New York Times, with declining print newspaper circulation, has a leader of subscription-based news. The 3rd largest paper in the US rose their total number of subscribing members to over 4.5 million in 2019, with digital revenue expected to hit $800 million by the end of this year. They hope to hit 10 million digital subscribers by 2025, and their forward-thinking approach has been well-received by Wall Street – the NYT stock reached a 15-year high in 2019.
Another media giant, Condé Nast, who attract over 350 million consumers online, are following suit. They announced in January last year that they would be moving all of their titles behind dynamic paywalls. And it’s not just the top brands pushing this agenda: Reuters estimate that half of all publishers identify ‘subscription’ as their primary revenue focus for 2020.
Unsurprisingly, small media start-ups are seeing an opportunity too, jumping straight into subscription models. Most successful of these so far is sports-focused news site The Athletic, which raised $70 million in funding and runs solely through subscription revenue. By offering localised sports news and analysis from ex-print journalists, The Athletic has managed to gain serious traction in only a few years. What’s more, the first-party data acquired through the subscription process allows writers at The Athletic to know exactly which articles are drawing in the new customers. Once again, the desire for relevant quality content is clear, and highly monetizable.
What to Expect From 2020
By all accounts subscriptions to digital news sites will continue to rise over the next few years. Slowdowns in digital advertising revenue, and a thirst for trustworthy content, mean both the media companies and their customers are pushing for this model. Google and Facebook take roughly 75% of digital ad revenue and are responsible for 95% of its growth. Any news site refusing to make the switch to subscription will be left fighting an uphill battle - against the digital giants - for scarce viewership.
For those embracing subscriptions already, the tech is out there to help. Dynamic paywalls and customer journey orchestration systems are beginning to give media firms more control over their readers’ experiences. Personalisation will also be at the forefront of companies’ offering. From paywall to article, subscribers will interact more efficiently with their news sites. Writers will be able to focus less on readership and more on engagement, leading to more valuable and trustworthy articles.
It’s likely that partnerships will become even more popular as well. The Washington Post and Hulu already offer a combined digital access bundle for $99 a year, and the New York Times and Spotify for $203. With further momentum in the subscription economy as a whole, for example with the launch of Disney+, news websites will continue to look to other entertainment sectors to create higher value, and more attractive, joint offerings.
The Final Word
Headlines used to shout about the death of print newspapers – as customers moved online – and now even the demise of online news. But the news isn’t dead, it’s just different. Readers want to cut through the noise and focus on relevant, reliable and trusted content. A personal and streamlined experience with quality digital sources has become a commodity well worth the monthly subscription. Media companies are able to interact with their readers like never before, and 2020 is set to be the year we all benefit from that.
If you are looking for market-leading dynamic paywall technology to optimize subscriptions on your platform, get in touch!