Securing Revenue Streams
The New York Times, The Washington Post, Wall Street Journal, LA Times and The Boston Globe. These are just some of the big-name news organizations who are cashing in on the revival of the subscription model for online publishers. After many complained that their advertising revenue dollars were decreasing, due mainly to the duopoly of Facebook and Google who suck them up like a high-powered Dyson, they wanted to secure other streams of revenue. And good for them.
It took them a little time to figure out which model worked for them; freemium, hardwall or metered. They tested different variations of attribution – which users converted to paying subscribers from which source and what did they read beforehand. Eventually, with the use of data to inform conversion strategies, their subscriber base started to grow.
As of Q1 2018, The Washington Post has over 1 million subscribers, The New York Times has 2.3 million and The Wall Street Journal stands at around 1.7 million. Among 98 U.S. news publications with more than 50,000 in circulations, around 79% of them use some form of digital subscription model, according to The American Press Institute.
Apart from the larger nationals, local news publications have also experienced some success with subscription models. So much so that Warren Buffet’s BH Media Group purchased 70 newspapers, and he is a firm believer that a local, tightly-knit community are more than willing to pay for subscriptions to keep up to date with news in their locality.
While this is fantastic news (no pun intended) for the continuation of free press and high-quality journalism, this probably isn’t a viable option for the thousands of publishers spread across the online ecosystem.
Not Freely Available
In order to convince someone to part with money for a service, you need the person to feel like what they are paying for is high-quality content that isn’t freely available in other places, or at least that they are deriving some true value from the content that enhances a part of their life or personal interests in someway. The New York Times’ niche content like crosswords and recipes are of particular interest to their subscriber base.
Speaking to the Digiday + podcast, Dotdash CEO Neil Vogel explained why they won’t add a paywall to their content:
It Will End In Tears
When explaining why subscription hungry publishers need to be careful of believing they can just pivot to a paywall, former Times and NPR exec Vivian Schiller warned that, “I’m afraid for most news publishers, it’s going to end in tears.”
Let’s put aside the fact that 79% of readers surveyed by Reuters Institute said it was “somewhat or very unlikely” that they would pay for online news, now or anytime soon, the difficulties publications like The New York Times went through in order to hone in on a subscription model that actually converted, worked and didn’t produce massive amounts of churn, was “a hell of a lot of investment in data and audience segmentation,” according to Schiller.
In short, it was really hard and it took them three long and drawn out attempts to succeed. The Times even invested in hiring former e-commerce executives in order to help them convert more readers to subscribers. Then there’s the problem with keeping them engaged – it’s more than most publications can handle.
There Are Other Options
If you’re in the news business, and you’re a trusted brand to your reader base, subscriptions are a viable revenue source, but definitely not the only one.
Even publishers who are pursuing certain types of subscriptions, the freemium model in particular, can still capitalize on ad revenue as a primary revenue source. Publications like Bild in Germany, and The Telegraph in the UK offer most of their content for free, with only around 20% being behind a paywall. Optimizing that traffic and measuring your ad and user performance more effectively could potentially drive as much revenue, or maybe more, as the subscriptions.
When it comes to the digital advertising industry, the days of chasing direct deals for a spread in a national daily are becoming obsolete, but with the advancement of programmatic ads, there is still plenty of options for publishers not looking to pursue subscription revenue at all.
The only change is the way in which some types of digital advertising are being distributed is becoming more complex, and there is a need for publishers to make use of technology in order to understand where exactly their advertising dollars are actually coming from.
In order to generate the most revenue, or at least optimize their current revenue, publishers need to look at a multitude of revenue streams in real time in order to understand the true visitor value of their readers. This is hard to do, but with the right technology to unify and analyze the data, it’s the way to move forward without subscriptions.
Interested In Hearing More? Take A Look At This Short Video To Understand How PubPlus Can You Help You Understand Your True Visitor Value: