This is an excerpt from our free-to-download report, 50 Ways To Make Media Pay
Faced with considerable uncertainty in terms of shifting advertising budgets, the move to reader revenue has been a major media trend of the past few years.
This pivot pre-dates the COVID era. Nevertheless, if nothing else, the coronavirus crisis has emphasised the importance of this strategic play, not least because of the speed with which many advertising verticals dried up in the early days of the pandemic.
Subsequently, at the start of 2021, Nic Newman, in his annual “journalism, media, and technology trends” report for the Reuters Institute for the Study of Journalism (RISJ), predicted that this would “be a year of economic reshaping with publishers leaning into subscription and e-commerce – two future-facing business models that have been supercharged by the pandemic.”
Newman’s view is reinforced by a RISJ survey of 234 media leaders across 43 countries which identified driving subscriptions as the most important area for growing digital revenue at their company.
Subscriptions, of course, are not a panacea for publishers. Moreover, the subscription economy is becoming increasingly busy. As the Washington Post has commented, “everything’s becoming a subscription, and the pandemic is partly to blame.”
The financial services firm UBS projects the “subscription economy” will grow to a $1.5 trillion market by 2025, up from $650 in 2020. With an average annual growth rate of 18%, “this would make it one of the fastest growing industries globally.”
Looking at the habits and preferences of U.S. customers, Deloitte’s latest “Digital Media Trends” report notes issues of persistent churn, subscription fatigue and that “people are showing strong interest in ad-supported options that subsidize or remove subscription costs.” Although their focus is primarily on streaming video, there are wider implications from these trends that all publishers and content creators need to be cognizant of.
The plethora of subscription providers that publishers are competing with includes everyone from other media companies through to meal providers, live (but from home) fitness classes, as well as companies offering regularly replenished toothbrushes and shaving products.
This competition means that subscriptions cannot constitute the be-all and end-all for publishers. They need to be part of a broad basket of revenue streams. Media businesses, of course, know this. As Nic Newman notes, “Publishers say that, on average, four different revenue streams will be important or very important this year.”
Within that, however, subscriptions will be a very important part of the mix for most organisations. And, as we shall, there are a number of different ways in which they may manifest themselves.
Here are some of the most common approaches:
1. Medium specific subscriptions
Many publications continue to offer medium-specific subscriptions, including print only, as well as combined packages.
In some instances, publishers will seek to “upsell” print subscribers, by noting the value of their online content. On other occasions, the price differential between print vs. print + digital, can be minimal. This reflects the value advertisers (and publishers) can often still attribute to print.
Such tactics are perhaps most prevalent at upscale newspapers where many newspaper weekend subscribers (e.g. to the more lucrative Saturday or Sunday edition) will often have full digital access thrown in for free.
For consumers, getting a weekend newspaper as a bonus for having a digital subscription, probably feels like a bargain. For publishers, this keeps print subscription numbers high, and higher print circulation figures – especially in weekend editions – can really help with your advertising sales (and rates). As a result of this financial dynamic, there’s an ongoing need for dual-medium publications “to respect print, and grow digital.”
2. Discounts for specific groups
“Give me a child until he is 7 and I will show you the man,” proclaimed Aristotle, espousing a maxim often attributed to the Jesuits.
One iteration of this adage within the publishing industry can be seen in the form of student subscriptions, products that seek to get audiences into the habit of consuming (and liking) your content, so they continue to subscribe (but at a higher $ rate) after their studies are finished. Bloomberg, The Ken (India) and (Business) Insider are just some companies offering this. Because they can be heavily discounted some proof of student enrollment may be required.
Looking at other groups, Insider also offers an educator discount (i.e. for teachers), as do a number of other publishers. Meanwhile, the Telegraph provides an introductory discount (£29.99 for your first year, auto-renewing at £197) for public health (NHS) workers in the U.K.; and several U.S. outlets offer discounts for members of the military. MIT alumni can get free access to MIT Technology Review.
3. Trials and Sign-Up offers
Non-subscribers are often targeted with special offers to take out subscriptions, especially around major holidays.
At the same time, some publishers also provide access to shorter “trial” periods. The Financial Times offers new customers a four week digital trial for just $1. After that, subscriptions jump to $68 a month, although other (cheaper) packages are also available.
To incentivise users to subscribe, and to emphasize what a good deal they are getting, TIME even has an on-screen countdown. Its implication is that the offer will disappear if you don’t sign-up before the counter hits zero (in reality, the offer price appears to still be available).
4. Group and Corporate subscriptions
Buying in bulk, rather than individually, typically works out cheaper on a cost per user basis. Outlets such as The New York Times, The Wall Street Journal and MIT Technology Review are just some providers offering this service.
Pricing models vary, but one advantage, particularly for companies with a global footprint, may be the ability to access different editions of a publication.
Subs are also typically paid annually, with onboarding materials and access to a dedicated customer service team.
5. Subscriptions via Third Party sites
Aside from engaging with prospective (paying) audiences on their own platforms, publishers are also experimenting with other sites as a means to attract consumers.
The Seattle Times has used Groupon, an online eCommerce site, for some time. A raft of other titles, including Architectural Digest Magazine, Better Homes & Gardens and The Olympian (a newspaper from Olympia, the state capital of Washington), can also be found on the site, with subscriptions often being heavily discounted (many 50-90% off).
6. Subscriber-only content
One way that a number of publishers are increasingly encouraging – or rewarding – subscribers, is by providing content that’s only available to them.
This can take a myriad of forms.
The Washington Post offers subscriber-only audio content, as well as unlimited free downloads of top-rated e-books from Pulitzer prize-winning journalists, while subscribers in the DC Metro area can save on tickets and entertainment events in the capital.
Apple News+ puts much of its (third party produced) content behind a paywall that can only be accessed by subscribers. The U.S. version of this digital newsstand (which is available in Australia, Canada, the U.K. and USA) features more than 300 publications and costs $9.99 a month.
Esquire offers a separate ($25 p.a.) subscription focused on the work of politics writer Charles P. Pierce. Its wider subscription packages also include access to a members-only newsletter, access to every story in their 85+ year archive and discounts with retailers.
7. Ad-free subscriptions
Many of the new breed of on-demand TV services (like Disney+ and Apple TV Plus) offer a similar ad-free experience. Others like Hulu, NBC’s Peacock and Paramount+ offer different price points for packages with – and without – adverts. Spotify does something similar for music and podcasts.
Media outlets focused on other mediums are increasingly following suit.
One of the advertised benefits of The Telegraph’s “Digital Plus” package ($26 per month vs. $12.99 for their standard digital package) is “faster loading articles with fewer adverts.”
Slate Plus members have long been able to access bonus – and ad-free – podcasts.
The Athletic promises breaking sports news and in-depth analysis all ad-free. In July 2021, the company increased its annual subscription to $71.99 per year (up from $59.99), with pay-monthly plans costing $7.99. Founded in 2016, the site hit the one million subscriber mark in late-2020, despite a pandemic and its impact on live sport.
8. Bundling with other providers
Spotify’s $4.99 a month student package, includes ad-free music and access to Hulu (ad-supported) plan as well as the SHOWTIME TV Streaming Service.
These types of partnerships are also becoming more prominent with other publishers too.
In September 2020, The Washington Post and Financial Times announced a special offer giving new readers of either publication 90 days access to the other outlet as part of their subscription package.
Last summer, T-Mobile and Sprint customers were also able to access a free year-long subscription to MLB.TV (including the MLB App’s premium features, worth $59.99), and a free annual subscription to The Athletic, through their “T-Mobile Tuesdays” programme.
9. Cross-publisher subscriptions
A different take on bundling was announced last year by the Google News Initiative and the Local Media Consortium (LMC). “The Matchup” is a subscription designed to allow users to access content – specifically sport – from partner websites.
Put simply, a single subscription to your hometown news site allows you to access other sports-related content via partner sites without you having to take out a separate subscription to read it. The assumption behind the initiative is that fans will often want to read what the paper of a team they’re playing (or have just played) has said, but they’re not going to do that on a regular basis.
The collaboration will allow access to content for subscribers, via a collaborative site, with all monies going back to the local publishers. “This means fans can feed their jones for sports while feeling good about supporting critical local public service journalism,” Google said.
10. Paid newsletters – subscription for the Substack generation
The renewed interest in newsletters, and the ability to monetise them, is an archetypal example of “what’s old is new again.”
There is considerable interest in the future of this medium, led by its poster child, Substack.
It’s a platform that has attracted a number of high profile writers and journalists, all of whom can charge subscriptions (if they want to) for access to their content. Writers determine which posts are offered free, or to paying subscribers, and they can also set the price point. They keep 90% of the revenue.
Reflecting on the success of the platform, and its implications, earlier this year, Anna Wiener wrote in The New Yorker:
“On Substack, the most successful newsletters are almost always written by people who have already cultivated an audience at traditional publications or built up a following elsewhere … Substack is a natural fit for the influencer, the pundit, the personality, and the political contrarian. It’s debatable whether this represents ‘a better future for news.’ But it’s great business for Substack.”
11. “Pay As You Go” subscriptions
Micropayment systems enable readers to consume your content one story at a time.
Blendle, in the Netherlands, and the self-proclaimed “iTunes for news,” was perhaps the best-known proponent of this model. Partnering with all of the leading Dutch publishers, audiences only paid for what they read. After announcing a pivot to subscriptions in 2019,
Blendle was acquired by Cafeyn, a European information streaming service, in 2020.
Axate is another company that allows for “casual payments” enabling consumers to access content across sites in their network. Users upload some money to their Axate ‘wallet’, which can be used to purchase individual articles (or other media) from partners such as The Yorkshire Post, Boxing News and Popbitch.
At a publisher level, The Winnipeg Free Press, in Canada, launched a micropayments option in 2015. “The paper has never looked at micropayments as a lucrative source of income,” Nieman Lab reported, but as a means to drive users towards subscription packages.
Just as well, argued the U.K. journalist James Ball back in 2020, commenting that the economics don’t stack up. “We’ve been waiting twenty-five years for micropayments,” he wrote. “And it looks, at this moment, like they may never arrive.”
Nonetheless, discussion about micropayments is a topic that won’t go away and one that publishers, therefore, need to be aware of.
12. Reducing churn
A final subscription tactic worth highlighting is the investment that publishers make in reducing churn. Acquiring subscribers is expensive, so it’s in a publisher’s interest to keep as many paying consumers as they can.
Tien Tzuo, CEO and Founder of Zuora, and author of Subscribed: Why the Subscription Model Will Be Your Company’s Future – and What to Do About It, agrees, arguing, “If the Subscription Economy is about anything, it’s about a fundamental return to relationships.”
As a result, we are seeing publishers investing in onboarding, as well as ongoing retention efforts designed to retain subscribers. Such efforts require cross-organisational buy-in, alongside retention-specific resources. “The Economist has 16 people focused on retention,” Digiday noted as far back as late-2017.
The need to address retention is particularly acute given the COVID-bump some publishers saw. As Sara Jerde reminds us in a piece for AdWeek: “digital and print media companies wondering how best to keep new subscribers who signed up during the pandemic will need to prove to readers that their publication is invaluable after the crisis.”
Elsewhere, publishers may be contending with challenges around converting subscribers from trial/special offer periods, as well as consumers who are feeling a financial pinch, or who just want to try something new.
Addressing this may mean deploying a range of tools, including: dynamic pricing, bundling and other techniques – such as targeting subscribers to improve their engagement and frequency of consumption, which might be through other products, like newsletter and podcasts – as well as emphasising original content.
Alongside this, outlets like The Seattle Times have focused on areas such as grace period, credit card management and targeted customer communication, as part of a wider effort to keep subscribers on board.
“Businesses that focus on the audience first and advertising second will be better equipped to handle the consequences of the pandemic,” argues Curtis Huber, Senior Director of Circulation and Audience Revenue at the Seattle Times.
That’s a maxim that publishers should continue to heed long after the pandemic has ended.
Originally published in What’s New in Publishing in December 2021. While some of the data points have evolved, the analysis and conclusion remain highly relevant.