Press Gazette held its first Future of Media Technology Conference on Wednesday 21st September in London. It aimed to give media industry decision-makers a one-day masterclass on the strategies, solutions and ideas they need to thrive in the digital era.
The room was packed, showing UK publishers’ appetite for in-person events is as strong as ever.
The opening panel featured News UK Chief Operating Officer David Dinsmore, Forbes Managing Director of Europe Alex Wood, Footballco Chief Executive Officer Juan Delgado and Sophi.io VP Gabe Gonda. They discussed some of the biggest themes impacting news media revenue strategies, including paywalls, micropayments and other lines of revenue such as licensing and merchandise.
Here are some of the key takeaways from the session:
Paywalls plus advertising
Discussions about how reader revenue and advertising sit alongside each other have begun to boil over this year as streaming giants like Netflix and Disney+ have announced ad-supported tiers which they still expect users to pay a monthly subscription fee for. Although many publishers have run ads alongside subscriptions for many years, some of those who took an anti-ad stance early on are having to re-evaluate.
“I don’t think it’s paywalls versus advertising,” said News UK’s David Dinsmore. “I think it’s paywalls and advertising, and both are an outcome of consumer engagement. If we do not engage our customers then we cannot offer any revenue, and the models will never work.”
Dinsmore explained that for News UK, their audience’s propensity to pay varies greatly by their brands, which cover the whole spectrum from The Sun to The Times. “If you are a cash rich, time poor Times reader, you are more likely to subscribe than if you are perhaps on a tight budget at the other end of the market,” he explained. “When we were working out the models for The Times and The Sun, we had to really focus on the one to get that world class.”
When The Times first launched its paywall in 2010, the newsroom was initially reluctant to adopt it. Now of course, it is a much more accepted way to do business and the paywall is regularly held up as an example in the industry of a huge success.
“The trick nowadays is how you get advertisers increasingly interested in that really well-defined, large and growing digital audience,” Dinsmore said, noting that The Times audience is one of the wealthiest in the country. “So it very quickly becomes paywall plus advertising.”
Dinsmore was quick to point out that reader revenue and advertising have historically always been how newspapers were funded. In print, there is a cover price – the equivalent of a digital paywall – and advertising within the paper.
But that doesn’t mean paywalls work for all brands. The Sun famously tried it in 2013, but rolled it back in 2015 in order to compete with rivals like MailOnline. “We tried a paywall. It didn’t work,” he admitted. “But we now have an advertising machine that is firing on all cylinders.”
“Now the question is, how do we get those Sun superfans – of which there are millions – how do we get more revenue from them? We have examples of that with Sun Bingo and other areas. We’re looking to extend going forward and there are great opportunities there over the next few years.”
Dynamic paywalls to optimise
The Globe and Mail in some ways has a similar profile to The Times, but it has approached the revenue balance challenge in a different way. “Only 10 years ago, we were 70-30 advertising-first,” said Gabe Gonda, one of the Globe’s executive leadership team and VP of Sophi.io; the Globe’s machine learning startup. “Today, we’re 65-35 users paying.”
For the Globe, their success in centering reader revenue has been down to building their own analytics, paywall and automation tools. “When you have different kinds of audiences with different kinds of propensity to pay, the tools we built… are there to actually help do that segmented optimisation,” Gonda explained.
“There are people who are time-poor and have a very high propensity to get their credit card and pay whatever it is a month for quality journalism. And there are others who aren’t. The beauty of a dynamic paywall is that it optimises for both segments.”
Gonda described the Globe as both a subscription-first and digital-first business. “Under the hood, it’s very balanced between print and digital, and digital is pretty balanced between user payments and advertising,” he said. “It’s only that way because we were so determined to shift that mix by investing in the technology.”
His big takeaway was that paywalls are not a one-size-fits-all solution. Even today, the Globe is continuously looking across all lines of revenue for opportunities.
Communities at scale
Like The Sun, Forbes has advertising at the core of its business for the long term. The publisher goes against the grain of many other business publications which have chosen to double down on subscriptions, and instead has chosen to remain broad to serve its 140 million monthly readers.
However it has been experimenting in recent years with reader revenue. Two years ago, Forbes set a strategy of communities at scale, tapping into clusters of expertise within their audience such as the CMO network, and the Under 30 community.
“Premium advertising is at the core of it,” Forbes’ Europe MD Alex Wood explained. “But we also have that metered paywall approach as well. Within our newsroom we have focused on our editorial team creating premium journalism.”
There’s something else that sets Forbes apart, according to Wood. “Lots of [publishers] are looking at subscriptions for data,” he explained. “We have our first-party data strategy which we started two years ago. For us, it’s not just about subscriptions. Our events business, both virtual and in-person, is huge for us.
“We’re collecting data through all the different touchpoints; whether it’s a newsletter, whether it’s an event. Putting all of that together, we’re able to put forward a really broad offering.”
Double down on membership
The final publisher on the panel was Footballco, the world’s largest football content and media business. They reach over 120 million unique users a month across all their brands globally, but the spread makes reader revenue complicated.
“Even though the UK, US, Canada or Japan have a higher propensity to pay for content, you’ve got to focus on what they actually would pay,” Football CEO Juan Delgado outlined. “We publish mostly football content and football news, and that is pretty widely available. And so, similar to The Sun, we have drawn the conclusion that it’s very unlikely for people to pay for that.”
Instead, Football bought a premium magazine called Mundial, which explores the intersection between football and culture. It has a high RPU, and publishes four editions a year. “It has a few tens of thousands of subscriptions,” Delgado said. “We’re focusing on reaching that very specific audience that is willing to pay for premium, glossy, quality content – probably bundled with some other membership qualities.
“That’s the way we think about monetising that audience and trying to find that sub-segment of people that ultimately pay for content.”