Already trending upwards for many publishers, reader revenue growth has been spurred on by lockdown audiences desperate for news and with lots of time on their hands. Peter Houston rounds up the year in reader revenue as part of our Media Moments 2020 report.
The pivot to reader revenue began way before 2020’s pandemic, but coronavirus lockdowns have proved to be a significant boost to subscriber-based business models. And the collapse of almost every other publishing income stream – newsstand, advertising, events – has guaranteed the reader’s place in future business planning and publisher hearts.
Digital subscriptions are the headline act, with more than one news brand posting record gains in this otherwise awful year. But the surprise guest on 2020 balance sheets will be print subscriptions (for those that still sell ink on paper). In May, Buzzfeed was reporting:
‘Subscriptions to glossy magazines are up, sales of publications focusing on puzzles or content for children are soaring, and websites capitalising on hundreds of millions of amateur cooks, bakers and gardeners stuck at home are seeing record traffic.’
The challenge for 2021 will be retention. How will publishers keep hold of subscribers brought in by a crazy-fast news cycle, the challenges of home schooling and the claustrophobic boredom of being made to stay home?
What happened in 2020?
The media-industry coverage from this year has been focused heavily on ‘trend acceleration’. It’s no different in reader revenue, and publishers that had already gone big on digital subscriptions reaped the rewards in 2020.
As the rapidly developing global health crisis unfolded, people were desperate for information that they could trust. And, confined to their own homes with time to kill, many turned to established media brands.
All the usual news suspects, from the New York Times to The Guardian, The London Times, The Financial and The Telegraph posted significant reader revenue gains this year.
Interestingly, most of the leading publishers brought their coronavirus coverage in front of their paywalls. Slightly counterintuitive you might think, and some argued that it was the wrong thing to do. But the move, as well as being socially responsible, paid off in additional subscriptions for those with must-read coverage – The Atlantic gained record traffic and 36,000 new paying customers in just four weeks.
“It’s the content that drives subscriptions,” Marc Isler, CRO for Swiss media group Tamedia, told FIPP for its quarterly Global Digital Subscriptions Snapshot (Q3 2020). Tamedia reported 37.5% growth in subscriptions with Isler citing deep-dive Coronavirus content as a key driver.
In the UK, digital publishers’ subscription revenues were up by almost 20% in the first three months of 2020, according to a study by the AOP and Deloitte. This is despite some publishers offering heavy discounts to take advantage of record traffic numbers and record numbers of visitors hitting paywall thresholds.
“It seems obvious in retrospect that parents were looking for something to keep their children occupied and engaged. So The Week Junior became, for all those kids who were suddenly not at school anymore…something a lot of parents felt that children would enjoy.”Anna Bassi, Editor in Chief, The Week Junior
However, the big plot twist in the 2020 subscriptions blockbuster is that print has done way better than anyone could have expected.
In the first couple of months of the crisis, Conde Nast reported that subscriptions to publications like the New Yorker, Vanity Fair and Architectural Digest had hit record levels. New US subscribers in March and April were twice what they were for the same period in 2019. And the company recorded print subscription growth globally, across Europe and from China to Russia. New subscription orders for Conde Nast’s UK titles were up an incredible 420% year-on-year.
Magnetic, a marketing agency for consumer magazine media, reported a slew of success stories mid lockdown. The Week Junior from Dennis posted 7,250 new subs in April; Hearst’s new subscriber acquisitions doubled year-on-year; and TI Media and Immediate Media both reported subscription increases of between 200% and 300%. In one week, at the end of April, Bauer saw the number of new subscriptions purchased online up over 160% compared with the same period in 2019.
Previous market research has shown that 66% of people claim their passions help them through difficult times to explain the rise in magazine subs. That certainly ties in with the reported interest in specialist hobby content during lockdowns and may be a sign that future subscription marketing efforts will hit the passion play hard.
Beyond standard digital or print subscriptions that swap content for cash, publishers took the opportunity, in ‘unprecedented times’, to ask their audiences to contribute in other ways.
Virtual events (webinars for the most part) were almost exclusively free-to-air prior to 2020. But cash-strapped publishers began charging this year and many have met with some success. Ticket prices are lower than in the real-world, but costs are lower too and reach is greater. There is also the added benefit that attendance vs registration for paid events is higher and that plays well with sponsors.
Ecommerce has also given publishers the opportunity to monetize their audience base. From Cosmo’s wine launch to Buzzfeed’s new sex toy, media brands have partnered with producers to put their name on products that they can recommend to readers.
For smaller publishers, newspapers and magazines, hit hard by COVID, the generosity of their readers has been a lifeline. Some sold branded merchandise, some asked for donations.
Where are we now?
Coming to the end of 2020, reader revenue has been firmly re-established as a major revenue line by publishers that once eschewed subscriptions for ad revenue sold off the back of free, controlled circulation.
Equally, quality content is back. No publisher would ever admit that they put content second, but now there is evidence that publishing organisations are actually investing in content again to support their subscription development efforts.
Media leaders from the FT’s John Ridding to The Telegraph’s Nick Hugh have placed the secret of their subscription success at the feet of their journalism. None has put it more simply and possibly with more authority than Mark Thomson at the New York Times:
“The single biggest thing we did… was to invest in our newsroom and invest in our journalism. And I still think the reason we have had more luck than many other news organisations is because we’ve invested in journalism; rather than firing journalists”.
If we’ve learned one thing from 2020 it has to be that people search for quality content in times of trouble and when they find it, they’ll pay.
“Readers simply have more time now. They can’t go out on weekends or in the evenings, so instead they opt for ‘high-quality magazines.’”Wolfgang Blau, former Chief Operating Officer and President, International, Condé Nast
What will happen next year?
The quest to discover exactly what media mix readers will pay for will continue apace. Major players will fight to secure their share of the subscription revenue pie. Having just achieved 7 million subscribers, The (not failing) New York Times will push on toward its 10 million subscriber target. Others will chase smaller, but no less ambitious goals.
The challenge for all will be to retain the new names acquired this year off the back of unusually high levels of anxiety, downtime and discounting. Developing reader routines will be central to the efforts of many; making ‘reading your content’ a habit.
To this end, many publishers will look to newsletters and podcasts to keep reader engagement high. Alternative paid-content plays like one-to-one messaging services between journalists and readers will be more common in 2021, although just how much money publishers can expect to make from either is a matter of debate. Others are examining subscriptions versus membership, deciding if the introduction of a strong community element will keep people paying.
On the downside the hoped for disappearance of anxiety inducing elements like Trump, Brexit and COVID 19, may remove some of the public’s motivation to pay for trusted news. And if subscription fatigue kicks in, subscriptions signed in the midst of the pandemic could be the first to go.
But realistically, even if Trump actually takes himself off to play golf and we get an effective vaccine, there’s more than enough uncertainty and misinformation in these turbulent times to keep discerning audiences paying for quality content.
This article is an extract from our Media Moments 2020 report. To see the case studies for this chapter and to read the full report, download it here.