News publishers are real winners of technological changes taking place in the publishing industry in the last years. The variety of digital distribution platforms allows them to reach every corner of the world with the content in live mode, as well as monetize successfully, for example, thanks to subscriptions. The strategy based on restricting access to the content allows increasing digital publications revenue and managing the offer of print and digital issues in the most profitable way.
The subscription business model is far from being a new invention. It was used by publishers of books and periodicals in the 17th century. It has been functioning in print for years, bringing publishers profits from selling regular access to the product. With the development of digital platforms, it has also appeared in the online sphere and has been adapted by many businesses and websites successively.
The year of the rise of subscriptions in digital news was 2020. This way of monetization became a top revenue strategy for publishers of all sizes and everything indicates that this trend will be continued.
Let’s take a look at five interesting subscription models that were implemented by well-known publishers. How do they monetize their content?
Why is digital subscriptions’ popularity growing?
Several factors have contributed to the significant increase in digital subscriptions recently:
- The newspaper business model turned upside down when there was a decline in print advertising (and print publishing altogether). At the same time digital publications increased in number. Publishers had to find an effective monetization way in the digital environment.
- The disappointment caused by the ad revenue drop, and the uncertainty associated with addiction to technology giants pushed publishers towards monetization strategies like paid subscriptions. This model eliminates the middleman; publishers get the payment for their job and keep users’ data, thanks to which readers get the content that fits their needs.
- People’s attitudes to paying for content on the internet were changed. We observe the increasing need for access to reliable information and the content we respect, especially in the time of Covid-19. According to the What’s New in Publishing, the subscription growth rate for digital news and media subscriptions went up 3x because of the pandemic.
Digital newspapers subscriptions strategies
The subscription model which is appropriately tailored to the needs of readers is a win-win strategy that allows achieving both sides’ goals. It’s possible when the customers receive value from the subscription. Only then will they be more likely to renew the subscription, and they’ll probably do it at an increased rate. The customers that don’t receive value, will return to the marketplace to look for different products that are better for them.
How do digital publishers benefit from the subscription model?
- They are provided with a consistent revenue stream for the duration of the subscriber’s agreement. It reduces uncertainty and the riskiness of the enterprise because subscribers need to pay in advance. Publishers can focus on optimizing for long-term customer lifetime value rather than on selling one-time single issues for relatively little money.
- The subscription strategy is a chance to maintain a long-term relationship with the readers in contrast to the one-time-purchase model. Readers get attached to using the service and they are more likely to extend it if its quality fulfills their needs.
- The subscription model allows the gathering of substantial amounts of information from the customer (which is irreplaceable while creating mailing lists and newsletters). A deeper analysis ensures the identification of both active and churned customers and offers insight into their real needs.
- Subscribers are the most engaged group of readers. They represent a strong group of potential customers for upselling and cross-selling other products or services.
Why are subscriptions great also for readers?
- The readers can find subscriptions convenient if they are sure that they will bring them value or help save money. In many cases, buying subscriptions also saves time.
- Being a subscriber gives you a possibility to read more content, to gain some “secret knowledge”, which results in a sense of belonging to a community.
- Subscription prices are usually designed to be lower than the price of a single product bought regularly.
- People can be tired of omnipresent advertising. Many publishers encourage readers to buy subscriptions by offering a total lack of advertising.
Subscriptions models in the real world of digital publishing
The New York Times record in digital subscriptions
With more than 6m paying online readers, The New York Times is the digital subscriptions leader. They reached two milestones:
- digital revenue overtook print revenue,
- revenue from digital subscriptions became their largest revenue stream.
These numbers didn’t fall from the sky. They are the result of the company’s digital strategy outlined a few years ago, its consistent implementation, analysis and improvement.
In the beginning, The New York Times implemented an intelligent paywall – visitors could read up to 20 articles a month free of charge before they were met with a paywall. Over time, the number of free articles decreased.
What does The New York Times offer now?
- 3 free articles per month,
- unlimited access to all the journalism they offer: articles, podcasts, videos and more on NYTimes.com and the NYTimes app (€0.75/week).
Their financial success is based on focusing on the customer, investing in high-quality journalism, and continuously developing the subscription offer. Thus, they prove that such an effort pays off.
Their actual goal is to reach 10 million subscribers by 2025.
Vogue’s digital strategy as a print extension
A magazine that needs no introduction. The print issues of Vogue are a fashion bible. However, compared to other well-known magazines, their digital offer is quite poor. In this case, the digital seems to be an addition to the printed giant.
Online content is a catalyst for selling print magazines.
What can we find in Vogue’s digital version?
While the print version typically includes long, detailed interviews with celebrities, in the digital magazine we can find additional online micro-content, such as easy to share Q&A videos.
This digital version is a nod to digital publishing changes and the sign that Vogue has kept up with the trend. However, printing remains at the center and there’s a message behind it: the publishers stay true to themselves and remain loyal to their audience spread all over the world.
What’s interesting, Vogue puts Instagram first in its development strategy. Each month, Vogue’s online content receives 56 million monthly unique digital users worldwide and has, in total, 141 million followers across its social platforms.
BILD’s power of video content in subscriptions growth
BILD is a German print publication that resembles a tabloid in style, and a broadsheet in size. They have a website that allows reading X articles for free. If you want to read more you can buy access to the premium tier of content called BILDplus. It’s appeared in two versions:
- access to all digital content including articles, videos and apps (the best-selling product for which 94 percent of its users pay),
- the e-paper version of the printed newspaper together with the basic digital bundle.
In January 2020, 458,942 readers used the paid digital service which is the best result in Europe and the fifth in the world by subscribers number.
How did they achieve such an impressive result on a European scale?
The secret to their success is… video content. They show in leveraging its power to drive subscriptions.
Some time ago, the BILD team found that eight out of the top ten highest-converting articles are either video documentaries or contain videos of some sort. It was the trigger to put parts of the video behind the paywall.
The company offers one-minute-long videos that are available to everyone on their websites putting its more in-depth video stories behind the BILDplus paywall (in addition to the videos they create, they also use other videos that are licensed from production companies).
“This year, it’s been selecting more videos to put behind its paywall — shorter, popular videos as well as longer documentaries and recurring series — in order to drive more subscribers to Bild Plus.”
Their example shows that video paywalls can be terrific ways for media companies to generate significant revenue. Especially that the video format is becoming more and more essential in the world of content creation.
The Athletic no ads strategy
The Athletic is a rapidly growing sports news website that leverages an ad-free, subscription-only model. As of July 2019, they have obtained over 500,000 subscribers.
The company has been using a paywall model from the very beginning. The founders have never wanted the readers to encounter distracting pop-ups or autoplay videos. The goal was simple – people have to get a non-distracting, pleasurable experience when reading about his or her favorite team.
We can check only a few sentences from a given article for free. As soon as we enter the website, we encounter information about the subscription in two versions:
“No ads, no pop-ups. Just stories with substance from all-star writers.”
The Athletic experiments with advertising but not on the main website. They launched a daily podcast called The LeadNew that is published entirely outside its paywall. It features ads, and its ultimate goal is to attract potential subscribers.
The Independent’s resignation from print
The Independent is a British newspaper that was established in 1986 as a national morning printed paper. They decided to resign from print in 2016 and started focusing only on the digital sphere. This was due to the unprofitability of the title – the newspaper was making losses since 1993.
Going digital changed the situation.
In 2020 they announced a 9 percent jump in their annual turnover and the third consecutive year of profits since its switch to a fully digital publisher.
“We don’t have to compromise doing two things at once, or having to balance conflicting priorities,” said the editor Christian Broughton.
The Independent launched a subscription model for readers, offering them exclusive editorial content, an ad-free live website, an app experience, and “closer interaction” with its journalists. They provide two subscription packages: Independent Premium and The Independent Daily Edition.
The digital strategy implementation was based on identifying who their readers are, what content will sufficiently engage them, and how to increase the likelihood of subscription. Since The Independent let go of its print edition, the newsroom has been able to fully focus on the development of digital issues and the newsletter which is the main driver for their subscriptions increase.
The example of The Independent makes us wonder how many newspapers will follow this path in the future – letting go of the print to spread wings in the digital.
What connects different digital subscription strategies?
The successful digital subscription implementation processes have a lot in common. We will try to list at least a few such factors.
- All the operations are highly concentrated on the subscription strategy, often at the expense of other methods of monetization.
- Publishers have precisely defined goals and are aware of all the hard work that awaits them on the way. Sometimes it’s necessary to employ additional specialists, analysts, or to appoint a new team.
- In developing a subscription method, it’s important to diversify content and/or create new products.
- Deep audience analysis has to be conducted at every step of the process.
- Publishers have to be flexible and ready to implement changes, even if it requires taking a step back.
Finding a successful subscription strategy is always a long-time process.
It usually goes through several stages: knowing the audience, thinking about package and price, choosing the best form of the paywall, hiring experts, and ongoing testing.
According to NiemanLab, we can talk about the success of introducing the subscription when a newspaper reaches major milestones:
- makes more revenue from digital sources than from print,
- makes more revenue from readers than from advertising,
- achieves net revenue growth, with digital dollars rising more quickly than print dollars are falling,
- has more digital subscribers than print subscribers.
Is it profitable to invest in digital subscriptions?
In the times when Google and Facebook control 89% of the US digital advertising market, publishers have to turn to alternative monetization methods.
Many of them have already noticed that getting the users to pay for content is promising. The key is knowing your audience, and showing persistence in finding the best method. As you can see, even the biggest players experimented.
Don’t think that only giants can benefit from using this method. The paywall also pays off for smaller publishers.