Publishers large and small are joining earlier adopters with their own reader revenues plays. But with subscription fatigue threatening, quality content and smart reader retention strategies will be necessary for success, says Peter Houston in this chapter of our Media Moments 2019 report.
“The pivot is real,” said Chartbeat CEO John Saroff in Nieman Lab’s Predictions for Journalism 2019.
From global news brands to individuals harnessing crowdfunding platforms, more publishers are taking cash straight from their readers online than ever before. And, in a media market predicted to grow to $1 trillion over the next few years, user-based income is expected to grow to account for the largest percentage of total revenue.
The push into reader revenues has been driven by a desire for stability in a volatile digital ad market and as a counter to platforms taking ownership of reader relationships and data. The quality of content, technology and robust retention strategies are developing into strong differentiators.
Success in reader revenues is not, however, a shoo-in. As more and more publishers close off open access to content, subscription fatigue looms large and publishers can expect to have to work ever harder to remain one of the tiny number of publications people are prepared to pay for.
Where are we now
Looking back, 2019 may come to be seen as the year paywalls hit the mainstream with many major publishers joining earlier adopters in their paywall plays. Conde Nast, leveraging learnings from its experience with The New Yorker, and reporting on the success of Wired’s 2018 paywall, promised that all its other US magazine sites would follow suit by the end of this year.
The Atlantic, finally put its paywall up in September, delaying the launch by 18 months until it got its technology just right. The waiting period was used to increase staffing and upgrade its technology platform to make sure the offer was of sufficient quality to attract, and keep, paying audiences.
The investment may have worked – US web traffic to the Atlantic’s site rose 35% during the first half of 2019 and digital advertising revenue increased 10%. With the paywall now in place, however, the long-term sustainability of the strategy will depend on converting audiences used to open access.
For many publishers that had already made the paywall switch, revenue growth was strong. The New York Times – still a shining beacon of reader-revenue success – reported its highest ever subscriber total in August; 4.7 million paid subscriptions across digital and print.
Almost 3.8 million people pay for the NYT’s online products, including news, crossword and cooking apps with the publisher adding almost 200,000 new digital subscribers in the 2nd Quarter of 2019. CEO Mark Thomson commented, “We’re making steady progress toward our goal of reaching 10 million total subscriptions by 2025.”
The one dark cloud for the NYT was a drop of around 5% in operating profits, but Thompson said this was largely a result of continued investment in growing the paper’s subscription business.