In our press release of the week, the UK’s Association of Online Publishers (AOP) have released the latest findings from their Q3 2023 DPRI report — conducted by AOP and Deloitte — and based on a survey of 13 UK digital publishers comprising nine B2C publishers and four B2B publishers.
The latest Digital Publishers’ Revenue Index (DPRI) from the Association of Online Publishers (AOP) and Deloitte reveals 58% of respondents reported growth year-on-year (YoY), though overall digital revenue for Q3 2023 was down by -0.5% from Q3 2022, for a total of £153 million.
After growth of just 0.3% in Q2 2023, digital publisher revenues in Q3 remain flat, indicative of the wider contraction in advertising spend. Notable drops occurred across display formats (-4.2%), video (-14.3%), and sponsorships (-25.9%). These losses were largely compensated by the ongoing growth in subscription revenues (11.7%), a category that has been performing well for more than a year.
Digital audio returned the most significant growth, up by 500% in Q3 2023 versus Q3 2022 though at a total of £3 million, it remains a relatively minor revenue stream. However, based on the increase from the £1.9 million generated by digital audio in Q2 2023, this category is one to watch. The “miscellaneous” category — which includes data monetisation — was also a growth hotspot at 117.1%, up to a total of £8.9 million.
Consistent with trends reported in previous quarters, multi-platform revenues are growing (10.5%) while mobile and desktop-specific revenues contract (-30% and -16.7%). Comparing multi-platform to platform-specific revenues reveals the drop in display revenue was driven entirely by the latter. Display revenues actually grew in the multi-platform category by 3.9%, while mobile and desktop saw falls of -4.7% and -18.1% respectively — the fall in video revenues, however, was consistent across all three. The outlier in video fortunes was the B2B category which, despite overall revenues falling by 5%, saw video revenues increase by 50%.
When asked about future business priorities for the next 12 months, members returned remarkably similar responses as Q3 2022, with new products and services cited as a priority by all respondents (100%), increased cashflow by 75% of respondents, non-advertising revenue by 66%, cost reductions by 50%, and acquisitions by 33%. Only advertising revenue growth diverted as a priority, dropping from 75% of respondents in Q2 2023 to 50% in Q3 2023.
Andy Cowen, Lead Partner for telecommunications, media and entertainment at Deloitte, said: “Despite a more subdued quarter for digital publishers, with a slight drop in growth year-on-year, there are still positive signs across sectors of the industry. Particularly encouraging are the green shoots of growth across digital audio which, although still a smaller revenue stream, has grown 500% year-on-year. This is a sign of ongoing diversification of revenue across the publishing industry and demonstrates consumer appetite for content across various platforms.”
Richard Reeves, Managing Director at AOP, commented: “Subscription revenues now account for almost a third of total publisher revenues, and by current trends, it could hit this milestone within a couple of quarters. Decoupling revenues from the ups and downs of advertising spend can provide a greater degree of financial security, though this cannot be a solution for all properties.
“Though overall revenues are flat, an increasing proportion of respondents reported year-on-year growth, at 58% in Q3, up from 50% in Q2 and 36% in Q1. This shows us there are extreme gaps in fortunes between individual publishers, and I urge a spirit of collaboration so that we can learn what is working for some and apply their success to the rest.”
