Publishers are pouring their hopes into subscriptions and memberships. That’s understandable. Consumers are exhibiting a (slowly) rising propensity to pay for digital news, which analysts hope heralds a return to the halcyon era in which subscription revenue was the basis of many newspaper and magazine P&Ls. Digital subscriptions offer the additional benefit of copious user data collection, which also buoys their advertising business as well.
The New York Times’ 4.7 million-strong subscriber base has given many publishers hope that subscriptions can work. Although the Los Angeles Times’ recently-revealed figures make it apparent that access to a large enough audience isn’t enough on its own if the renewal rate isn’t high.
However, even the most diehard optimists and proponents of subscription revenue have to admit that subscriptions alone are not a universal panacea to the need for digital revenue. Only a relatively small proportion of people are willing to pay for online news and only likely to pay for a single news subscription As the latest Digital News Report states: “the question of whether people will ever pay for an online news subscription has evolved into a question about how many subscriptions people will pay for.” The report concludes that, at least for the time being, the answer appears to be “one.”
Worse still, the report finds that the proportion of people willing to pay has not grown significantly in the past few years. This suggests that there is effectively a hard cap on how many people will ever pay for digital news. Those other consumers, effectively unwilling or unable to respond to requests for donations or subscriptions, present a problem. So, as cash-strapped publishers search for new sources of revenue, the question arises: How do you monetize the un-monetizable?