Welcome to the golden age of media
The media landscape has transformed beyond all recognition. Now, some of the largest companies in the world – such as Apple and Twitter – are relying less on advertisers as their primary source of revenue and instead, leaning on customers, with paid memberships and subscriptions taking precedence.
These new models have given the industry a new modus operandi. Using subscriptions means that media companies now have access to a regular and reliable source of income, which can be used to expand their core offering. This is especially true for publishing businesses. For example, Campaign recently announced that adopting a subscription-based business model and developing a new range of digital and data products has enabled the expansion of its editorial team. Meanwhile, Business Insider, which has more than doubled its subscriber base since the beginning of last year, has just entered into its first brand-focused partnership with American Express, opening up a whole new pool of potential customers.
There is no doubt that we are living in a golden age of media. But with the future still so uncertain, how can publishing businesses ensure long-term revenue predictability and growth through subscription models?
A golden, ad-free age in publishing
Subscription models aren’t an entirely new concept for those in media and publishing. In fact, they’re far from it. The industry has long made a success out of establishing and developing direct customer relationships, and being one of the first sectors to adopt the subscription business model, publishers have always understood the value of providing engaging experiences to their readers.
This meant that many businesses operating in the space were already ahead of the curve when the pandemic struck last year. With restaurants, pubs, theatres and shopping centres closing their doors, consumers around the world found themselves with a lot more time to spare. The need to stay at home and follow government guidelines meant that, for many, online outlets and TV streaming services became the number one source of news and entertainment. As a result, subscription rates boomed at a never-before-seen rate. In fact, Zuora’s recent End of Ownership Report discovered that 77% of U.K. adults are signed up to subscription services today. This is up from the 58% that had subscriptions 5 years ago.
In light of this, some media companies are realising that they no longer need advertising or paywalls to be successful. Today, rather than selling ad space, many streaming services and news organisations are asking us to support content creators through subscriptions. Take The Guardian as an example. The global media leader decided not to erect a blanket paywall for its online content. Instead, in an effort to deepen its relationship with readers and attract new sources of revenue, it introduced an innovative membership programme based on subscriptions. Members enjoy exclusive content including discussions, debates and interviews as well as customer-centric features such as holiday requests, suspensions and easy upgrades.
From acquisition to retention
For all media and publishing businesses operating on a subscription-based model, the real challenge is pivoting from subscriber acquisition to subscriber retention in order to ensure long-term profitability and growth. It’s important to remember that, with these models, the lion’s share of revenue is found through perceived value realised after the initial payment, and this means opportunities for customer engagement need to be maintained throughout the relationship.
Firstly, publishers using subscription services need to ensure customers are set up to engage with the brand on their own terms. This could be through offering multiple channels, self-service, or any way that ensures they feel in control of their experiences with the brand and to the level they’re comfortable with. Flexibility and convenience are key. For example, even having the option to suspend or leave a service is important from a customer viewpoint. Businesses that offer this typically grow faster than their peers, according to research from the Subscribed Institute.
Customisation is also important. This is because it makes the service seem more personal. For example, media businesses can use subscription data to recommend articles to individual readers based on recently consumed content. This enables them to add true value and build a better relationship with their customers, encouraging longer commitment and lessening churn.
Successful publishers are the ones that understand the evolving needs of their readers. Delivering a personalised, seamless, and flexible content experience is the only way to compete in the new golden age of publishing. By ditching the ads and committing to a subscription-based future, publishers will be able to rise above their competitors, unlock new sources of revenue and achieve true audience engagement.
General Manager EMEA, Zuora
Zuora is an enterprise software company that creates and provides software for businesses to launch and manage their subscription-based services. Zuora’s applications are designed to automate recurring billing, collections, quoting, revenue recognition, and subscription metrics.