Over the past 20-plus years, digital subscriptions have become essential to sustainable growth for media companies as part of their revenue diversification strategy. We know the pandemic created a strong consumer appetite for subscriptions. However, the digital media industry is wisely considering the future trajectory as the subscription marketplace faces heightened competition and inflation.
Digital Content Next (DCN) partnered with FT Strategies to better understand the digital subscription market, explore the macroeconomic influences, and identify best practices for future growth.
The research, Navigating the Future of Digital Subscriptions, used a three-prong approach to analyze market conditions and identify business practices for subscription growth.
- Qualitative interviews with a subset of senior executives from DCN member organizations to discuss business development and strategies for capturing future opportunities.
- A quantitative survey among DCN member organizations on their priorities for the future as the subscription economy develops.
- Review of data, analyses, and reports from the government, financial institutions, industry, trade organizations, trade publications, and consulting firms to identify and explain factors affecting the overall economic climate in the U.S. and their impact on the digital subscription economy.
The Covid pandemic was a critical inflection point that significantly impacted consumer behavior and subscription offerings in the digital content market. However, as the effects of the pandemic wane, the market faces new economic pressures.
On the business side, higher interest rates could affect business investment. For consumers, increasing inflation rates, accelerating price-increases, and the reduction in consumer savings may force many to cut back on what they deem non-essential. Further, falling unemployment rates impact digital media companies in acquiring and retaining talent, which can also add costs.
Even with the economic factors plaguing the market, our analysis concludes that the digital subscription economy is expected to continue its strong growth and is somewhat insulated from adverse economic conditions. However, digital content companies must be mindful of the risks posed by the changing macroeconomic climate.
The report, which is available to members of DCN, provides details on the economic forecasts for advertising and subscription revenue, plus additional insight into the cost of doing business and the competitive marketplace. As the subscription economy continues to grow over the next three years, audiences will likely be the target of many subscription businesses from a broader set of media outlets.
Navigating the future
The research outlines four areas of focus on how best to navigate and implement new strategies for future growth in digital subscriptions.
- Align the subscription mission with a highly collaborative organizational structure.
- Find and leverage the right audience data to act as a common language across the organization.
- Think more broadly about what innovation means to attract new audiences.
- Expand content distribution to accelerate audience growth.
Digital media companies are in a stronger position now to invest and prioritize their subscription business. While overall market projections look positive, monitoring and responding to shifts in macroeconomic factors is essential to inform how best to navigate the future of the digital subscription business. The full report includes a macro analysis of current market conditions, market forecast, and steps to navigate future subscription growth.
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