Subscriptions – The Future Of Online Publishing
In 2018, online media publishers are competing for a dwindling share of advertiser revenue. Alphabet and Facebook continue to leverage their magnitude to take the lion’s share of digital ad revenue forcing both smaller and bigger publishers to get creative for their piece of the pie. Currently, most publishers rely on advertisers but many have either built or are starting to build direct relationships to their consumers through paid subscriptions. Already this year, there has been a growing swath of publishers falling into this trend.
The ad driven model is broken, that’s why Buzzfeed is selling spatulas in Walmart. It’s masked as innovation, however it’s preceded by necessity, especially considering their struggle to hit their numbers by almost 20% last year. Consumer behavior is adapting and quality is being demanded. Ironically, the idea of subscriptions for publishing businesses isn’t foreign. Newspapers have been around for centuries and subscriptions have been popular since the 1830’s. This is why companies like The New York Times are ahead of the digital media pack with a cool 2.6 million subscribers. At $120/year per subscription, they aren’t hurting for income. Their annual subscription revenue in 2017 was roughly a billion dollars and that’s more than half of their overall revenue. They transitioned successfully from their established print subscription business where others could not. This model represents the future of media, one where advertiser revenue is supplementary and not the fulcrum a publisher leverages for profitability.
The last few years, subscriptions have been revolutionizing everything. Equal parts convenience and the sanguine satisfaction of unboxing and this physical trend has made its way into the digital realm. We already know that music, TV & Film have been revolutionized by the likes of Apple, Spotify, Netflix and Amazon. These companies have been great examples as to what a content business can offer to their consumer through the power of subscriptions. We’ve even started to notice gaming move in this direction via programs like Twitch subscriptions, where fans support their favorite streamers art with a small monthly fee.
At the dawn of the world wide web, the concept of “the free internet” gained steam. When websites began competing for eyeballs robust ad systems were born and became very profitable, very fast. As the value of that content became more about turning heads, and less about creating substance, online subscriptions created opportunity.
It’s in this space that the consumers win as our dollars, no longer those of advertisers, dictate what content the platform will publish. This is a renewed opportunity for publishers to strengthen their trust with their consumers. The Washington Post, owned by Jeff Bezos, has even discussed giving its subscribers direct access to communicate with writers and staff. While they’re only tallying about 40% of the Times’ digital subs, they have the ability to bundle their perks with Amazon and its other subsidiaries.
Recently, Bloomberg announced its new subscription model. Financial Times makes most of its revenue through this method. Conde Nast owned Vanity Fair is giving a $20/year offering to its readers. The Information, a new publisher for the tech elite, publishes high quality content that holds its own against more popular ad driven tech publications. They recently held a media summit and there, New York Times COO, Meredith Kopit Levien stated to the audience, that “a rising tide lifts all boats” speaking to their passion to help media businesses everywhere move into subscriptions, knowing if most or all publishers can show that subscriptions are the most valuable for their customer, everyone wins. As glorious as it sounds, it also makes it more difficult to compete and show value. Subscription content has to be premium and it has to create an experience for the customer. Google and Facebook see this as well, both giants are creating tools for publishers to create and support subscription platforms and Apple is actually creating its own platform for news. These companies recognize the new upward trend and how it could change large aspects of their businesses.
Publishers across various fields big and small will thrive in this coming time. Strong brands creating content for passionate niche’s are finding each other, and the customers are paying for exactly what they want and value. We’re seeing this in sports with The Athletic, hype fashion culture through Maekan, and even newsletter darling, The Skimm. There’s a host more of new and established companies moving in this direction.
At its core the subscription is recurring revenue, a business model that’s been around since 1440 with the advent of the printing press. And here we are in 2018 as our modern media tycoons return to their 15th century roots while simultaneously guiding their businesses into the future. If you’re the customer, get excited and ready to pay for what you love and need. If you’re the publisher, be prepared, maybe even a little scared.