Is your subscription the one worth keeping? Publishers work to prove value

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2022 saw publishers working to convince customers they’re worth the money. From content bundles to exclusive newsletters and podcasts, the subscription market is having to evolve. Peter Houston rounds up the year in subscriptions as part of our Media Moments 2022 report.

After a frantic couple of years, when reader revenue seemed to be the only game in town, 2022 ushered in talk of a subscriptions shakeout. As markets from heated seats to tacos introduced monthly payment offers, the threat of market saturation has become real. And with the cost of living crisis kicking in, concerns have been growing that consumers are starting to consider just which subscriptions they really need.

Early in the year, Amanda Mull dared to suggest in the Atlantic that we had reached peak subscription. And as if anticipating her analysis,the number of UK homes that had at least one paid-for streaming service fell by 215,000 in the first quarter, the end of a 10-year growth period among popular subscription services. Underlining the trend, Netflix alone lost 1 million subscribers in the second quarter of the year.

In media, INMA’s Subscription Benchmarking Service,  covering 125 international news brands, reported a spike in subscription cancellations. The past few quarters have seen cancellations go up 34% compared to Q1 of 2021. Recent research from Toolkits and National Research Group showed that almost 30% of consumers polled plan to reduce the number of online subscriptions they hold.

Toolkits’ co-founder Jack Marshall acknowledged the likelihood of a downturn back in May, especially in the face of the ‘belt-tightening’ tightening economic conditions inevitably bring. But he said this wasn’t a sign of any fundamental problems with the subscription model.

“More than anything, publishers just need to be honest with themselves about whether they really have the content and products to support subscription models sustainably in the long term,” he said on the Media Voices podcast.

Focus on value

Even as some publishers are seeing cancellations, some are enjoying continued growth; AOP members reported digital subscriptions growth at almost 15% for the year between June 2021 and June 2022.

A select few have reported record performances, with quality content and trusted brands the designated driver. With more than 9 million subscribers to support her argument, New York Times president and CEO Meredith Kopit Levien said its success was down to publishing the best content possible.

The Economist posted its most profitable year since 2016 on the back of 1.2 million subscribers and total subscription revenues accounting for more than 60% of its revenues. Referencing Russia’s invasion of Ukraine and inflation at its highest rate for a generation, editor-in-chief Zanny Minton Beddoes described the Economist’s content as delivering “timely, mind-stretching analysis to subscribers, helping them to make sense of the world.”

The Times signed up an average of 1,000 new digital subscribers every day over the first two weeks of Russia’s attack. Times head of digital Edward Roussel told Press Gazette: “The trend that we’re seeing is that in moments of crisis, whether it’s the onset of coronavirus or Brexit, you see this shift towards trusted brands.”

The two-year old sports and culture website Defector earns 95% of its revenue from subscriptions. This year, it boosted its subscriber acquisitions by making its Normal Gossip podcast – one of Nick Quah’s best podcasts of the year – paid. Building on the unique positioning of the sports rumours show, Defector saw its biggest one-week subscriber increase in a year.

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Listen: Poool’s Audience Conversion Consultant Anthony Ribeiro joined the Media Voices podcast to explore how publishers with subscription and membership schemes are handling increasing pressure on consumer budgets. Listen below, or search for ‘Media Voices’ wherever you find podcasts.

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Looking ahead

Anthony Ribeiro, audience conversion consultant at membership and subscription suite Poool, said success is often down to the value proposition. Responding to questions about the difficulty news publishers have even managing to get readers to register he said: “There’s a lack of unique value being offered in exchange for registration; there needs to be something they can’t get elsewhere, just like with subscriptions.”

Seeing that subscription revenues alone might not be enough, one time ‘all-ads-are-bad’ content providers, from Netflix to The Athletic, are introducing advertising to bolster their earnings. There is even a growing consensus that, post cookies, subscription publishers will be in a better position to offer advertisers premium spots using the first-party data gathered from subscribers and registered users.

And in a market under pressure, evolution is key to the continued success of the subscription model. The bundle, embraced by the New York Times, is one way that the publishers can increase value to paying audiences and increase subscriber value. With growth no longer primarily in subscriptions to news alone, the NYT is pushing an all-access offer that brings together games and cooking content with audio, exclusive newsletters, product reviews on Wirecutter and sports coverage from the athletic.

While few publishers can afford to stump up $550 million for a brand like the Athletic or even the ‘low seven figures’ paid for Wordle, they can focus on superserving their most engaged audience members. At WAN-IFRA’s World News Media Congress this year, Héctor Aranda, CEO of Argentina’s Clarin, said his company gets 70% of its subscription revenue from less than 2% of its total audience.

The bottom line is that publishers looking to keep growing their reader revenues must get better at targeting their messaging, pricing and content offering to convince cash-strapped audiences that their subscription is the one worth keeping.