This past year was a tipping point in the history of publishers with digital subscriptions fast becoming the accepted focus for revenue growth – ahead of other streams such as ad sales, e-commerce, events etc.
That was one of the key findings in the Reuters Institute ‘Journalism, media, and technology trends and predictions 2021’ report, which said subscriptions were supercharged by the Covid-19 pandemic and are set to be one of the most important focus areas for publishers this year.
For the first time, the report showed that a majority of media leaders considered subscriptions to be their most important revenue stream. The report also showed that 76% of media leaders rated driving digital subscriptions as ‘important’ or ‘very important’.
This predicted growth in the importance of subscriptions to the bottom line comes as no surprise to those with a deep understanding of the way the content creation and news industry is evolving. Years of shifting attitudes and reader and consumer behaviour has redefined how paywalls are viewed and made the case for paid-for news.
What added value does the subscription economy bring for publishers?
Making the case for digital subscriptions is easy when you look at the results achieved by publications like the New York Times (NYT).
In its fourth-quarter earnings report for 2020, The NYT said that digital subscription revenue, which had long been its fastest-growing revenue stream, was also now its largest.
- Digital advertising revenue was $90.1 million, or 64.7 percent of total company advertising revenues.
- Across the year, the NYT’s digital news product gained 1.7 million subscribers, a 48 percent increase on 2019.
- More than five million Times subscriptions are for the news product alone.
- Other digital offerings, such as cooking and games apps, gained more than 600,000 subscriptions in 2020, a 66 percent rise.
- There were around 833,000 subscriptions for the print newspaper.
What the NYT figures tell us about the value of digital subscriptions
Paid for digital subscriptions bring in significant revenue in their own right, but it’s not just the subscription payments themselves that add value.
As we can see from the NYT figures, it is attracting increasing numbers to games and apps.
There is a huge amount of value in the insight provided by subscriber data around what content is most read and engaged with generally and for individual subscribers.
This data provides opportunities for publishers to diversify and offer other products that really engage their customers, like apps and games. Many publishers have also moved into events, Red being just one example1.
Publishers can also use this data to focus efforts into creating more popular content as well as ensuring subscribers are exposed to content they are personally interested in. This helps to reduce subscriber churn and allows targeted choices and informed decisions about what content is monetised.
Savvy publishers know how to maximise the value of paywalls and datawalls.
Data walls that allow insight into customers can offer as much value as paywalls. There’s also the opportunity to target digital advertising, vastly increasing its value.
How to grow digital subscribers
It is possible to learn from the successful tried-and-tested techniques publishers have already used to grow digital subscribers.
- Analysing what content drives subscriptions.
- Offering a set number of articles free and then requiring subscription or payment via a paywall –testing and assessing what works best for conversions with specific audiences.
- Considering offering corporate subscriptions to allow firms to give access to all their employees.
- Web design that teases non-subscribers with content they could access if they sign up. The French publisher Le Monde reported increases of 46% in subscriber conversions with a redesign of this nature.
- Offering added value for subscribers, such as access to archive content, preview material or special offers and discounts with corporate partnerships, such as retailers or travel firms.
- Being aware of and responding to regional or national differences that may impact on how willing people are to subscribe.
Localised issues that may impact on digital subscription growthThe importance of the need for personalisation and localisation in the approach to growing digital subscribers can be seen by looking at figures that demonstrate national appetite for paying for news.
The Reuters Institute 2020 Digital News Report showed that a much greater percentage of people in Norway (42%) had paid for news in the past year than the UK (7%).
It could be concluded from the figures that it is likely that different strategies may be needed to lure readers in the UK into a paid digital subscription.
The number of people who said ‘yes’ when asked by the Reuters Institute: “Have you paid for online news in the past year,” was2:
- Norway 42%
- USA 20%
- Australia 14%
- Spain 12%
- Germany 10%
- France 10%
- Japan 8%
- UK 7%
Publishers need to use and build their understanding of their own audiences to identify the barriers and incentives to subscribing for their readers.
How to increase the value of your digital subscriptions
Publishing and media industry insiders recognise that in many cases their websites and subscription systems still fall short of what consumers and readers expect, creating a barrier to growth.
One publisher, quoted in the Reuters Institute trends for 2021 report, said: “Publishing in general has a lot of basic catching up to do on ease of use, customer service, etc.
“The benchmark is Amazon and Netflix. It’s no use having AI recommendations if people can’t easily log in, pause subscriptions, or change billing details.”
Subscribers want fast, frictionless experiences. That requires a platform that allows customised customer journeys to subscription and beyond.
Maximising the value of those subscribers comes from capturing first-party data and being able to effectively apply insights from it.
To be of most value, platforms should allow non-technical commercial teams to access them directly and apply their audience and industry experience to refine and optimise the customer journey.
Digital subscriptions are vital and growing. For publishers in general, they offer predictable, recurring revenue that takes away their reliance on falling advertising budgets and print circulations. But for publishers at the cutting edge of technology and customer experience, they offer so much more value through 1st-party data insights, the ability to make informed content and conversion decisions, and the opportunity to move existing subscribers on to higher value offerings such as gaming, apps and events.
The NYT leads the way at the intersection of media and technology, blazing a trail that the rest of the industry is finally catching up to. There is a huge opportunity for the wider industry to unlock the value of digital subscriptions by implementing different types of paywall strategies, offering corporate packages, and creating localised content. With news subscription penetration still low in many countries like the UK (7%) and Germany (10%), the subscription economy is still nascent within publishing, but with industry leaders in agreement that subscriptions are the way forward for their bottom lines, it won't be for long.Discover the 4 steps needed to create successful digital subscription journeys here.