“Journalism will continue to be hollowed out by structural shifts that have already led to significant falls in advertising revenue. Publishers are looking to subscriptions to make up the difference,” begins the Reuters Institute’s Journalism, Media and Technology Trends 2019 report. “Subscription and membership is the key priority for the news industry going forward.”
“News organisations are increasingly looking to subscription and membership or other forms of reader contribution to pay the bills in a so-called ‘pivot to paid’,” echoes Reuters’ Digital News Report 2019.
While the Trends report said that over 50% of news publishers intended to make subscriptions their main revenue focus for the year ahead, as we approach the end of 2019, it appears things may not have exactly gone according to plan.
According to a survey by Digiday Research earlier this month, publishers are running into a number of obstacles in their subscription efforts, with the biggest challenge—faced by 63% of publishers—being the task of converting audiences to paid subscribers.
Moving from open access to paid content is undoubtedly the biggest challenge publishers face when launching a new paid-for product. Convincing readers they need to pay for something that was previously free is made even harder when so much regular news is commodified.Lucinda Southern, Digiday Research
Publishers who have tackled the challenges are doing well, though. FIPP’s 2019 Global Digital Subscription Snapshot Report gives an overview of publishers who have been successful in growing their digital subscriptions into a significant revenue stream. It reveals how they are doubling down on paywall content and technology as they focus on digital subscriptions as their key revenue driver.
“In this report we not only illustrate continued stellar digital subscription growth rates, but reveal a dogged determination and growing confidence in making reader revenue models work,” the FIPP report states. “There is a healthy demand for high quality, original content, and consumers are willing to pay for it.”
Nevertheless, it appears that “a dogged determination” is not quite what many publishers are demonstrating right now, as further data from the Digiday Research indicates.
Almost 4 out of 10 publisher executives said that their company’s resource commitment to subscription initiatives is in the single-digit percentages, and an overwhelming 75% say they spend less than a fourth of resources on subscription efforts.
This, in spite of the fact that, as the study highlights, “Subscriptions are a fairly solid and sustainable business, in comparison to the digital ad market at least, and it’s one of the main drivers for publishers building out this revenue stream.”
“The newsroom must own the subscription process,” says Shelley Seale, Editor of INMA. In a report, she shares why Norwegian and Swedish media markets are reportedly the most advanced in the world in embracing data and digital subscriptions, and also some insights into what’s holding others back:
“It is a consistent cultural struggle to keep people focused,” says Earl Wilkinson, CEO of INMA. “There are still companies out there internationally where newsrooms want nothing to do with data or digital subscriptions.”
According to Shorenstein Center and Lenfest Institute’s Digital Pay-Meter Playbook, a news organization’s stop rate often distinguishes high-performing publishers. Stop rate is the percentage of all digital users who are “stopped” by a subscription prompt, a paywall, or a meter limit. Publishers with over 6% stop rates have “thriving” digital subscription businesses.
But a majority of the publishers are stopping a limited percentage of their readers. The Playbook states, “among the more than 500 news organizations analyzed, the fiftieth percentile of publishers stops only 1.8% of their readership with a paywall or meter.”
The report suggests that publishers “invest in capabilities to engage in constant testing and experimentation in digital — to build engagement among digital audiences and ultimately convert engaged readers into paying subscribers.”
Yes, there are challenges. But for many publishers who put in the time and resources, subscriptions work. Unfortunately, it appears a large percentage are only paying lip service to subscriptions, while still clinging to outdated business models.
“We have met the enemy and he is us,” goes the pun on a very familiar quote. The data indicates that for many publishers struggling with their subscription efforts, it may be time for some introspection. And eventually, a bit more resource allocation on the digital front.