8 out of 10 publishers are focusing on subscription strategies
79% of publishers are focusing on subscription or membership strategies as their most important revenue priorities this year, according to Reuters Institute’s Journalism, Media, and Technology Trends and Predictions 2022.
However, 47% of the respondents expressed concern that the continued prioritization of direct reader revenue may push journalism towards super-serving the more affluent and educated readers.
Publishers’ confidence in reader revenues comes from the fact that their overall revenues have increased YoY despite the ongoing pandemic. 59% of the 246 CEOs, editors and digital leaders from 52 countries surveyed for the report said that their revenue had gone up compared to 8% who said it declined.
Journalism is no longer being taken for granted. The industry is explaining itself better and money is flowing proportionately to economic growth.David Walmsley, Editor-in-Chief, Globe and Mail, Canada
The successful publishers range from biggies like The New York Times (8.4M subscriptions) to smaller digital-born ones like Dennik N in Slovakia, El Diario in Spain, Malaysiakini in Malaysia, Zetland in Denmark, and the Daily Maverick in South Africa. Overall, the majority of publishers (73%) are optimistic about the year ahead.
Tackling subscription fatigue and inability to pay
Apart from the likes of the BBC and the Guardian with their commitment to open journalism, this concern is being countered by publishers with different strategies, for example, The Daily Maverick offers a ‘pay what you can afford’ membership scheme. El Diario gives its readers the option of free membership if they cannot afford to pay.
Additionally, there is concern around subscription fatigue as well. The report expects publishers to come up with cut-price offers and differential pricing to retain new subscribers gained during the pandemic. Others are looking to develop new premium products to encourage tie-ins, as well as bundle paid podcasts and audiobooks. The New York Times has been able to generate significant revenue from its crosswords and cooking apps. Recently, the publisher placed its product review site, Wirecutter, behind a paywall. It has also started offering some of its previously free newsletters only to subscribers.
Many publishers, like BuzzFeed and Vox, are pursuing a mix of revenue models, for example, advertising, e-commerce, and subscriptions.
More power to creators
The rise of the creator economy driven by the likes of Substack has led traditional publishers to respond with measures that help them attract and retain star talent. While some journalists have made significant revenues by going independent with platforms like Substack, most have found it challenging to generate income that is at par with their traditional jobs.
Some publishers are now looking at creating offers that give writers the independence and opportunity to increase their earnings combined with the security and perks of a regular job. “This year we may see more companies that try to mix the infrastructure of a traditional news organization with the freedom and financial rewards they can find on their own,” explains Nic Newman, the report’s author.
The Atlantic, for example, announced the launch of subscriber-only newsletters in November. The writers included Charlie Warzel, the author of the Galaxy Brain on Substack which moved to The Atlantic.
Some publishers are also using newsletters exclusively to drive growth. Axios plans to expand its newsletter-led model to 25 US cities by mid-2022 offering local news reporting. The publisher aims to eventually reach every community in America.
“Building digital connections and relationships will be more important than ever”
Going beyond acquiring star writers, the report predicts more M&A activity. Digital native brands will pursue scale via M&A to compete with a “resurgent legacy media for general readers and with platforms for advertising dollars.” Legacy media, on the other hand, “will be looking for digital brands that can add value to their subscription bundles and bring different types of audience.”
BuzzFeed acquired the digital lifestyle publisher Complex, in June 2021, following its late 2020 acquisition of HuffPost. Similarly, Vox bought New York Magazine and its websites in 2019 and has just acquired Group Nine. Axel Springer purchased Politico last year for around $1B and the New York Times is reportedly interested in acquiring sports publisher, the Athletic which has more than 1M subscribers.
“This year’s report and survey show many publishers more determined than ever to refocus their businesses on digital,” comments Newman. He points to the behavior changes induced by the pandemic—people are spending significantly more time online—that can have long-term consequences.
“Even when the crisis finally ends, we’ll all be spending more time online and less time together physically,” he concludes. “In that context, building digital connections and relationships will be more important than ever.”
2022 will be a year of careful consolidation for a news industry that has been both disrupted and galvanized by the drawn-out COVID-19 crisis. Both journalists and audiences have, to some degree, been ‘burnt out’ by the relentless intensity of the news agenda, alongside increasingly polarised debates about politics, identity, and culture.
This could be the year when journalism takes a breath, focuses on the basics, and comes back stronger.Journalism, Media, and Technology Trends and Predictions 2022, Reuters Institute
The full report can be downloaded from Reuters Institute:
Journalism, Media, and Technology Trends and Predictions 2022