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Publishers focus on subscriptions as they diversify revenueJanuary 15, 2019 | By Rande Price, Research VP – DCN @Randeloo
Publishers are challenged by the dominance of platform intermediaries in content distribution and advertising revenue. Those facing these challenges are looking to offset losses by broadening their revenue diversification through subscriptions and new product offerings. In fact, according to Reuters Institute’s Digital News Report: Journalism, Media, and Technology Trends and Predictions 2019, subscription and membership offerings are a priority this year.
The report, based on responses from 200 editors, CEOs, and digital leaders from 29 countries, states that more than half (52%) of digital leaders expect subscriptions to be a main revenue focus this year. This compares to just over a quarter (27%) who cite display advertising as a main revenue source, and only 8% who state native advertising and 7% who report donations. Still, advertising is an important focus. A strong majority see display advertising (81%), subscriptions (78%) and native advertising (75%) as “important or very important” for company revenue.
Additional findings include:
- Limited funding for quality news. Less than one-third (29%) of digital leaders expect funding from foundations and non-profits. Eighteen percent expect contributions from tech platforms and 11% think governments will provide more support. A full 29% of publishers do not expect any assistance in funding.
- Google is very important; Facebook and YouTube less so. Google remains a key priority for most with most publishers (87%). They report it as “very or extremely important” compared to Facebook (43%), Apple (43%) or YouTube (42%) as they look to reach new audiences. Fewer publishers see Instagram (31%), Twitter (29%), WhatsApp (16%), Amazon (16%) or Snapchat (8%) as important to their news organizations.
- Social media presents options for marketing and acquisitions. Publishers that are focusin on subscriptions use social media more as a marketing and acquisition channel. Still, social media usage and results differ by publisher. Magazine brands are more likely to use Instagram and Snapchat for marketing, while local news publishers use broad reach platforms for referrals.
- Publishers use visual storytelling to attract a younger audience. Stories has become a highly popular storytelling format. It is used daily by 150 million people on Facebook, 190 million on Snapchat, and 300 million on Instagram. Publishers are utilizing visual storytelling because it works well on mobile and helps attract a younger audience.
- Podcasts and voice assistant devices become part of publishers’ strategies. Three-quarters of publishers (75%) think that audio devices like Amazon Alexa and Google Assistant will become an important part of their content and commercial strategies. Seventy-eight percent also report that voice assisted devices will impact how audiences access content in the next few years. The New York Times now offers a short news briefing for Alexa devices and consumers can ask for the Times’ Flash News Briefing.
- Publisher paywalls may lead to consumer frustration. The strategy to put whole-publisher sites behind a paywall may meet with consumer backlash. If this occurs, publishers will likely see an increase in the adoption of subscription blockers, an easy downloadable software or browser extension with a workaround for metered paywalls.
- Increasing bundled offerings and payment aggregation. To prevent churn and increase engagement, publishers will announce bundled packages including more product and cross-media packages. For example, The Times of London offers a one-year Wall Street Journal subscription. Publishers, Telcom, and over-the-top services (OTT) are also packaging their services in subscription offerings.
It’s essential for publishers to continue strengthening their relationship with consumers. Rasmus Kleis Nielsen, director the Reuter’s Institutes, comments in the Nieman Lab Predictions for 2019, “The shift thus has to be about better and more distinct journalism in an incredibly competitive battle for attention, about a greater focus on what readers actually value, about organizations and technologies built around serving them efficiently, and perhaps most importantly about a commitment to the long haul — to making the changes necessary to winning paying readers one at a time, keeping them, accumulating them.” Nielsen believes that in order to ensure journalism is valued, publishers must identify the needs of the reader. Importantly, there are new strategies and technologies available to build consumer value, heighten product attraction and increase engage with paying consumers.