Editor’s note: Dushyant Khare is the co-founder of Fewcents, a Fintech for publishers that manages distributed paywalls for articles, podcasts and videos. The Fix is currently partnering with Fewcents in developing our own, tailored reader revenue strategy
For years subscriptions were like a slow-moving train. Every now and then you would discover that a publication you occasionally visited is charging you to read its content. Then a COVID-induced decline in ads sped up adoption, tipping the scales.
Nowadays, it feels like everyone is putting up paywalls (even USA Today, a publication aimed at casual readers, jumped on the train last week). We have come to expect that the articles our friends share on social media will be locked.
The good news is that readers’ willingness- to-pay has also been on the rise. According to the latest Reuters Digital News Report, across 20 countries surveyed, 17% of people are ready to pay for media content. That’s up by two percentage points compared to last year.
But that growth isn’t nearly enough to keep up with the rising number of subscriptions on offer. Across the countries included in the DNR 2021, the median number of subscriptions held by those who pay for news was consistent – and the number was consistently “one”.
As a result, more and more readers are suffering from “subscription fatigue”. This creates risks to both publishers’ existing subscriber base (churn goes up and people leave), and makes signing each new subscriber increasingly harder (and more expensive).
Media need to find ways to work around this challenge. On the one hand, educating people about the importance of paying for quality is key to “growing the pie”. But publishers also need to find alternative solutions for the vast majority of casual readers, the so-called never-subscribers.
The limits of the subscription model
The past year has been pretty positive for subscriptions. Industry heavyweight the New York Times reached 7.8 million subscriptions at the end of Q1 2021 – up from 5.3 million at end-2019. (This number includes a declining stock of less than 0.8 million print-based bundles). The publication still hopes to reach 10 million subscribers by 2025.
But this is pretty much a best case scenario and one that most publishers can hardly expect to match. Monthly subscriptions is a “winner-takes-most” type of market. A few top players have a field day, while everyone else is fighting for the scraps.
“Half of all subscribers in the United States (45%) pay for one of the New York Times, Washington Post, or Wall Street Journal, according to our data”, reads the DNR 2021. “In the UK, The Times, Telegraph and Guardian account for over half (52%) of those who currently pay, while in Finland, we find that almost half of subscribers (48%) pay for just one publication, the leading broadsheet Helsingin Sanomat”.
According to some estimates, there are 100 million people ready to pay for English-language content. The reasonable estimate is that two dozen top global publications will capture at least half of that.
According to Deloitte’s 13th Digital Media Trends survey, 47% of US adults are frustrated by the ever-growing number of subscriptions.
That means that literally thousands (if not tens of thousands) of publishers will be fighting for the rest. And don’t forget that newsletters and other subscription based content products will also get their piece.
Some quick, back-of-the-envelope math suggests a good outcome for a mid-to-large English language publication is 50,000 to 100,000 paying subscribers. The majority will struggle to make it even that far, leading to more aggressive competition. The alternative is to look to the several times bigger part of the audience, namely the never-subscribers.
More from The Fix: Year 2020 in subscriptions and memberships
Addressing a reader pain point
During the pandemic many of us reached out to various media to fill the empty lockdown days. This was a boom for content creators, from Netflix to your neighbourhood blogger. But after a while those subscriptions add up.
While publishers may view their subscription as unique, in consumers’ minds they are often bundled together with streaming services, gaming and even food delivery subscriptions. According to Deloitte’s 13th Digital Media Trends survey, 47% of US adults are frustrated by the ever-growing number of subscriptions.
This is a real pain point for readers that publishers are ignoring. It isn’t that people are not ready to pay for good content. It’s rather that they don’t want to go through the process of adding yet another constant, month-in-month-out financial stream. Especially if they struggle to then cancel them.
Everyday people on social media are asking publishers to make a per-article payment option available. Publishers we spoke to often say they receive the same message in their inboxes. This raises the question – why are we not doing more to solve this user pain point?
Unbundling as a path to better reader offers
One of the overlooked challenges that publishers need to solve to improve their offering – especially that which targets never-subscribers – is actually understanding what users want.
The mystery of the subscription journey is part of it (i.e., finding out if it was the 1st, 4th, or 6th article a person viewed that made the “switch”, convincing them they should subscribe). But it goes further.
During the recent podcast on “What’s next for reader revenue?”, hosted by The Fix, each of the guests shared surprising insights from a detailed analysis of their subscribers. Sonali Verma from The Globe and Mail, for instance, found that many were ready to pay for free, wire content.
Similarly, during our work at Fewcents, we have found that while some content that editor’s assess as premium fared poorly, while city news or sports, for instance, had great conversions.
Diving even deeper is key to creating better offerings for readers. By “unbundling” subscriptions and getting a better view of the underlying data, publishers can recreate temporary or limited combinations of content. In brief, focus on what audiences are really ready to pay for and discard the rest.
It comes down to broadening the menu. There are those readers who are happy to take a monthly subscription with us. But many others don’t want to be tied down, or want just a small selection of our content. It is in publishers interests to also make them a compelling offer.
More from The Fix: 4 tactics to generate engagement during the pandemic
Growing the pie and educating readers will help. We can certainly all aspire to become more Scandinavian, reaching 30%+ levels of willingness to pay. But publishing also needs to recognize the limits of the current subscription model, and get better at working with the majority who fall outside it.