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The market for digital subscriptions is currently valued at $650B, according to a new report, 2022 Subscription Trends, from Lineup, a subscription management solutions provider. It’s expected to reach $1.5T by 2025—more than double its size today—a strong indication that the rise of the subscription economy is not a passing fad.
At least one subscription service is now used by 205M Americans, up 13% from 182M in the first quarter of 2020. Last year, subscription commerce sales climbed 41%, and experts estimate their value at $28B.
Subscribed
The report identifies the top 7 subscription trends for publishers:
- Post-pandemic, subscriptions will have staying power
- Subscriptions will continue to grow beyond the media model
- Content creators will drive subscription offerings
- Subscriber commitment issues will persist
- Substack growth will challenge publishers
- Personalization will remain paramount
- Green consumerism will drive the death of low-value print
“Provide your audience, above and beyond the traditional media options”
The subscription economy has been growing since before the pandemic. The increasing number of options available to users created concerns about subscription fatigue. However, the pandemic showed that subscriptions have staying power as demonstrated by many publishers who continue to register growth post-pandemic highs.
Gannett reported a 46% year-over-year (YoY) increase in digital subscriptions in November 2021 to reach 1.5M subscribers. Hearst grew its digital subscriptions by 50% over 2021.
The pandemic has disrupted the market and subscription offerings have come back into the spotlight as revenue generators.
2022 Subscription Trends
While subscriptions present an attractive revenue opportunity for publishers, they are facing increasing competition from other media companies as well as industries like fashion, hospitality, travel, and more. Consumers can subscribe to services and products ranging from food and alcohol delivery to clothing, pet products, and more. Even a fast-food brand like Taco Bell has jumped on the subscription train. It offers Taco Lover’s Pass which allows subscribers to redeem one taco a day for 30 consecutive days.
As available options continue to increase, so does demand for flexibility. The media companies that understand their audiences’ needs and craft highly personalized packages will come out ahead of those that take a one-size-fits-all approach to their subscription strategy.
2022 Subscription Trends
“To stay relevant among new and different subscriptions, publishers must take a “subscription and…” approach to their offerings,” the authors suggest. “This means considering what you can provide your audience, above and beyond the traditional media options.”
They refer to The New York Times which acquired the popular online puzzle game Wordle earlier this year. “It’s likely that the media giant will eventually include Wordle in a subscription package and other publishers will create similar offerings.”
“Leverage the trust they’ve built with their audiences”
The increasing popularity of content creators on platforms like TikTok, Instagram, YouTube, and the like has opened up another subscription opportunity for publishers. TikTok announced in January that it was testing its audience’s appetite for paid subscriptions.
Instagram launched a new feature called Instagram Subscriptions in January 2022. It was released to a small test group in America. The feature allows creators to give their followers paid access to exclusive content like Instagram Stories and Instagram Live videos. Price points range from $0.99 per month to $99.99 per month. YouTube also allows content creators to offer exclusive content to paying subscribers.
Similarly, the success of the Substack model has put the spotlight on the influence of individual journalists and specialized/niche content. Launched in 2017, the platform crossed 250M paid subscribers by 2021—its top 10 writers now bring in a total of $7M in annual revenue.
The report suggests publishers consider partnering with these “influencer” journalists and “leverage the trust they’ve built with their audiences. This can help media companies strengthen their own subscription business models by adding value for consumers.”
What does this evolving trend mean for publishers? You’re likely to see increased competition in the subscription space, reinforcing the need for high-quality content.
2022 Subscription Trends
“Key to overcoming subscriber commitment issues”
Increased competition also increases the likelihood of churning. “Considering the oversaturated state of the subscription market, it’s no surprise that customer churn in some industries has reached 30%,” the authors note. “The key to overcoming subscriber commitment issues lies in media companies’ ability to tailor their offerings to each individual customer, and to ensure their packages resonate with subscribers’ specific—and varied— interests to mitigate churn.”
For example, daily visitors can be encouraged to subscribe with a metered paywall. Offering subscription products based around topics like sports “could be a smart way to increase revenue” from readers who only visit specific sections of the website, says Anna Caselli, Director, Client Strategy, Piano.
So how can publishers harness the power of personalization to continue growing their businesses? “First, you must establish a robust (and clean) set of first-party consumer data,” the authors suggest. “Second, you need to invest in technology that allows you to use that data to create hyper-personalized editorial content and subscription offerings.”
Canada’s Globe and Mail newspaper is doing it successfully with its AI-driven paywall called Sophi. The suite of tools automates and optimizes a wide range of publishing decisions including home page curation, social media content promotion, and calculating users’ potential value from both an advertising and subscription perspective.
Sophi has helped the newspaper double its digital subscriber base to 170,000 and boost conversion rates by 50%.
However, “focusing too heavily on subscriber acquisition can also be dangerous,” the report states. “Publishers can no longer afford to focus on only one part of the journey from initial engagement via registration to revenue realization.”
“The new reality of the subscription landscape is exacerbated by the fact that consumers have more choice than ever before, so they’re less loyal to brands today than they were in the past. This means you need to invest in nurturing your subscribers regularly to reinforce the value of the choice they’re making to do business with you.”
2022 Subscription Trends
The full report can be downloaded here:
2022 Subscription Trends: Top 7 Trends for Publishers to Watch
