Research / Insights on current and emerging industry topics
2023 strategies for subscription growthFebruary 7, 2023 | By Rande Price, Research VP – DCN @Randeloo
Amid market inflation, media companies prioritize the subscription segment of their businesses as they question the longevity of economic uncertainty. Early headlines this year illustrate financial concerns with layoffs, hiring freezes, and other cost-cutting efforts. In this year’s Journalism, Media, and Technology Trends and Predictions 2023, Nic Neuman analyzes business plans and identifies next steps for growth and sustainability. One of the trends he explores is strategies that publishers are employing to support the subscription economy.
Reuters’ findings include survey responses from 303 participants across 53 countries and territories. Participants are in senior editorial, commercial, or product positions in traditional or digital-born publishing companies involved in digital or media strategy.
Doubling down on subscription growth
Given elevated revenue concerns, publishers see subscription growth as a top priority. Eighty percent of publishers report that subscriptions are one of the most important revenue priorities, ahead of display and native advertising. Many publishers are using price cuts and special introductory offers, reducing their revenue short term while looking to increase it in the longer term.
Digital publishers are also engaging subscribers through bundling efforts. Neuman cites The New York Times as a prime example. The Times identified strong consumer brands (i.e., Wirecutter and The Athletic) to combine with its core news product. NY Times. CEO Meredith Kopit Levien notes that “bundled subscriber” pay more over time and are less likely to cancel.
Publishers also highlight an audience-first approach as an essential strategy to attract and retain subscribers. As subscription growth continues, more publishers are collecting first-party data to advance their direct sales efforts. Further, many publishers see the programmatic marketplace as a leading contributor to poor user experience.
Unfortunately, traffic reports appear to be very mixed among publishers. Approximately 42% say website traffic is up year-over-year, while 58% report that traffic is flat or falling. Compounding these traffic reports, 72% of publishers report concerns that users are avoiding the news.
To combat avoidance, many publishers mention their efforts to explain the news better and offer insight and solutions, not just to identify the problem. Publishers look to new and different formats to showcase news stories and offer more context, like explanatory journalism (94%), Q&A formats (87%), and solutions and constructive journalism (73%).
Notably, three publishers in Germany, Deutsche Welle, RTL News, and Rheinische Post, created the Bonn Institute for Journalism and Constructive Dialogue. The organization’s mission is to support more positive debates and generate awareness of journalism’s social responsibility. There is a renewed focus on ethics and providing accurate and reliable information. The report also notes that publishers like the BBC and Guardian share inspiring and feel-good news stories to help counter news avoidance.
Attracting younger audiences
More publishers are using video platforms like TikTok (+63 net score/more effort than last year), Instagram (+50), and YouTube (+47) to engage younger audiences. In contrast, they report putting less effort into Facebook (-30) and Twitter (-28) compared to a year ago.
Most publishers also say that they will focus on podcasts and other digital audio (72%), email newsletters (69%), and digital video (67%) to build a deeper connection with audiences. In contrast, only 5% report interest in developing applications for the metaverse or voice assistants.
Subscription businesses with diversified product offerings strongly position publishers in this marketplace. Focusing on an audience-first approach with a positive consumer experience combats news avoidance, builds engagement, and fuels retention. Pivoting to new platforms and product offerings like newsletters and podcasts offer opportunities to attract younger and different audience segments.