Why Publishers are Rethinking Digital Subscriptions

Why Publishers are Rethinking Digital Subscriptions

“Digital subscriptions will not save the newspaper business model,” argued Tim Burrowes, founder and content director at media and marketing site, Mumbrella.¹

Or so it was thought in 2014.

In fact, digital subscriptions have proven to be one of the more successful monetization strategies, benefiting publisher in more ways than one.

In February of this year, The New York Times, for example, announced an additional 276,000 digital subscriptions in the final quarter of 2016 alone, pushing its total number of digital subscriptions to 1.6 million.²

From a monetization standpoint, revenue from those digital-only subscriptions rose 17 percent year-over-year for The Times, to $233 million – up significantly from the $193 million mark from 2015.³

Regarding the significant increase of digital-only subscribers, the Times Chief Executive Mark Thompson remains confident that the growth will continue.

“We continue to experience significant headwinds in print advertising, but the robustness of our consumer business, which we expect will continue, provides a strong counterbalance to these market challenges, we will remain focused on our legacy cost base while continuing to invest in digital growth and innovation.”⁴

Similarly, The Economist has utilized its social platforms to acquire digital subscribers. The result was a nearly 14-percent boom from 303,500 subscribers to 345,500 this past year.⁵

By focusing on pushing its digital subscription packages, the publication grew profits to more than £60m ($63 million) last year, overcoming an 18 percent fall in print ad revenues.⁶

In addition to offering a sustainable revenue stream, subscriptions also allow publishers to better understand their most loyal readers.

For The Telegraph, the ability to connect with subscribers directly is very appealing. “The driving factor for this is to increase engagement with readers,” said The Telegraph’s chief customer officer Robert Bridge. “We still need the reach, but this is about direct connections.”⁷

Web publications like Talking Points Memo (TPM) and PandoDaily have also began focusing less on scale, and more on tailoring content to meet the interests of subscribers.

“Our whole thinking is based on the premise that scale is greatly overrated, which is not a totally unique thought these days, says TPM’s founder, editor, and publisher, Josh Marshall. “…We’re finding ways to build revenue streams that are based on what’s unique about our core audience and brand and letting other publications that are focused on scale and social media propagation do their own thing.”⁸

Similarly, Paul Carr, editorial director at PandoDaily asserts, “It’s your most loyal, most core, most eager readers who are the keenest to pay for things, so you really have to go out of your way to give them something really valuable.”⁹

While it’s clear consumers are willing to pay modestly for news, there’s a subscription model targeted toward a different strain of customer – premium subscription.

For example, in 2016, Wired Media Group (consisting of Wired, Ars Technica and Backchannel) announced a subscription program for executives looking to keep an edge on technology news.¹⁰

For $4,000 a month, Emerging Technology Council members can gain access to both in-person and virtual premium events, among other perks.¹¹

“If you’re brand that’s a leading influencer, you can see an opportunity to deeply engage with the tip of the pyramid,” said Kim Kelleher, CRO of the Wired Media Group.¹²

Along with Wired Media Group, Business Insider Intelligence charges $2,495 for all-access memberships, while Politico Pro, the news site’s premium package, costs $3,295 for individual subscriptions and upwards of $8,000 for corporate subscriptions.¹³

“It’s not just throwing a paywall in front of things people can get for free,” said Kevin Turpin, the president of National Journal, “You create a service relationship.”¹⁴

Indeed, subscription services are more than a reliable monetization method – they build a relationship between reader and publisher, bringing the two much closer together.

1. Burrowes, Tim. “The data is finally in. Newspapers aren’t going to get enough digital subscribers.” Mumbrella. N.p., 16 Aug. 2014. Web. 15 Mar. 2017.
2. Ember, Sydney. “New York Times Co.’s Decline in Print Advertising Tempered by Digital Gains.” The New York Times. The New York Times, 02 Feb. 2017. Web. 13 Mar. 2017.
3. “The New York Times Company Reports 2015 Fourth-Quarter and Full-Year Results.” The New York Times Company – The New York Times Company Reports 2015 Fourth-Quarter and Full-Year Results. N.p., n.d. Web. 13 Mar. 2017.
4. “Boost in Online Subscriptions May Be Salvation for New York Times.” Boost in Online Subscriptions May Be Salvation for New York Times. N.p., n.d. Web. 13 Mar. 2017.
5. Southern, February 14 2017 by Lucinda. “How The Economist turns social visitors into subscribers.” Digiday. N.p., 14 Feb. 2017. Web. 13 Mar. 2017.
6. Sweney, Mark. “Economist profits up to £61m as paid subscriptions offset 18% print ad fall.” The Guardian. Guardian News and Media, 07 July 2016. Web. 13 Mar. 2017.
7. Davies, November 3 2016 by Jessica. “The Telegraph is tightening its paywall.” Digiday. N.p., 07 Feb. 2017. Web. 13 Mar. 2017.
8. “With 11,000 subscribers, Talking Points Memo says its paid product has helped stabilize its business.” Nieman Lab. N.p., n.d. Web. 14 Mar. 2017.
9. Bilton, March 31 2014by Ricardo. “The latest publisher subscription model: memberships.” Digiday. N.p., 30 Mar. 2014. Web. 14 Mar. 2017.
10. Willens, December 6 2016 by Max. “A return to focus: Publishers are going high with subscription prices.” Digiday. N.p., 27 Jan. 2017. Web. 13 Mar. 2017.
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