Digital only subscriptions for news and magazine media have doubled from 10M to 20M in a year and a half, according to the latest Global Digital Subscription Snapshot report from FIPP and CeleraOne. The actual figure is likely much higher as the report could not include data from “hundreds of titles with paywalls,” as they were not available.
This achievement is particularly poignant in a year in which an increasing number of respected commentators have focussed their reporting on the potential limitations for the market with terms like subscription fatigue entering the industry lexicon alongside suggestions that the market for news and magazine media digital subscriptions is nearing saturation point.James Hewes, President and CEO, FIPP
“Create products to stimulate demand”
While concerns about subscription fatigue are based on research—the report refers to the 2019 Reuters survey—it may not always present an accurate picture.
The FIPP report states, “Whilst surveys provide a great way to gauge opinion and understand behaviour, they may not always be accurate from a projection point of view.
“Gauging market appetite has always been challenging. While there are natural limitations to any given market, appetite for it is usually a created phenomenon based on perceived value, quality, and utility.”
It refers to Netflix which started its streaming services way back in 2007, and refined its services over the years to reach where it is now. In the news publishing sector, consumers in countries like Norway and Sweden have shown more willingness to pay for news. But even in these countries, publishers “would have started from ground zero, and had to build the market before they could create the appetite for their products.”
“Competing for a share of wallet”
The Reuters’ survey also found that more people preferred paying for entertainment services than for news. When it asked respondents which service they would choose from if they were forced to choose only one subscription service for the next year, news was the least selected option. Other options included, video streaming, music streaming, gaming, sports, dating, data storage and nothing.
The FIPP report suggests, “it is challenging to understand under what conditions consumers would be forced to make such a decision.
“Whilst it is a valid point that news and magazine media are competing for a share of wallet with other media formats, how much consumers will spend will more likely be driven by their disposable income and the value such services provide to the person’s individual needs.”
It adds that the Reuters survey does not consider the disposable income unlocked when consumers give up traditional (and more expensive) services in favor of comparatively cheaper digital subscriptions.
“If a consumer foregoes a cable package that costs $60 a month, will that consumer limit themselves to subscribing only to a single subscription service at $10 a month?”
We believe that the continuing decline in data costs and the displacement of expensive traditional subscriptions by cheaper digital equivalents might prove yet to have a stimulating effect on the number of subscriptions consumers are willing to consider overall across different categories.Global Digital Subscription Snapshot, November 2019
Making themselves relevant to the young generation
The primary challenge for publishers is to make themselves relevant to a generation that grew up glued to screens and with a seemingly endless choice of free content.
Research from Reuters has found that young people are primarily driven by progress and enjoyment in their lives and this translates into what they look for in news. It’s not that they are disinterested in news, but find the format, approach, and tone of news products cumbersome to consume.
The disconnect with mainstream publications could be driven by a lack of a user experience that is tailored to them and their content needs.Global Digital Subscription Snapshot, November 2019
There are several examples of publishers that have adapted themselves to the changing consumer requirements and found success. This includes the Athletic which has shown a 600% growth rate while focusing only on sports based content. The title grew from 100,000 subscribers in June 2018 to 500,000 a year later. In another month, it reached 600,000 subscribers, and is confident of reaching the 1M milestone by the end of the year.
Top 15 Publishers with the highest numbers of digital subscribers:
Traditional news publishers like the The Times and the Guardian have also shown impressive growth. The Times and the Sunday Times’ digital-only subscription base of 304,000 is now larger than its print subscription base, and has helped it return to profitability this year.
“Tap into the zeitgeist of younger audiences”
The Guardian, which was eyeing losses to the tune of £80M in 2015, broke even this year, after prolonged restructuring and following an unconventional membership model with no fixed price point. The publisher appeals to its readers to contribute to support independent journalism.
This year it’s positioning itself as a climate crisis activist for climate has become a top influencer for millennials and Gen Y audiences, and will influence who they vote for in the upcoming elections.
The report suggests, “This shift in positioning, coupled with the release of a new subscription-based app could very well be a calculated move to tap into the zeitgeist of younger audiences.”
“New phase of expansion”
That the potential for subscription in news and magazines is not anywhere near saturation is also demonstrated by big tech companies’ interest in the business.
Big tech companies are experts at spotting market potential, and then stepping in to create products to stimulate demand. Although their efforts come with mixed results, the launch of Apple News+ in the UK during September and the continued expansion of Google Subscription Services suggests that the tech behemoths are smelling potential.Global Digital Subscription Snapshot, November 2019
Emphasizing the continued stellar growth of digital subscriptions and renewed interest in the area by technology companies, Hewes concludes, “if anything, the market is set to be redefined as it heads into a new phase of expansion.”
The full report is available at FIPP: Global Digital Subscription Snapshot