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Digital publishers see boost in revenue growth as confidence increases

AOP and Deloitte reveal publishers’ total digital revenue has increased by 5.4 per cent on a 12-month rolling basis to March 2018 with industry confidence also on the up.

 

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Digital publishers saw year-on-year revenues increase to £89.7m (US$118m) in Q1 2018, up 3.8 per cent compared to Q1 2017, according to findings from the latest Digital Publishers Revenue Index (DPRI), a quarterly report on UK publishing from the Association for Online Publishing (AOP) and Deloitte. On a 12-month rolling basis to March 2018, combined revenue has increased 5.4 per cent to £371m ($488m). 

Participants in the DPRI survey have seen a considerable revenue shift from the previous year. Almost 60 per cent of publishers saw positive revenue growth in Q1 2018, compared to 48 per cent in Q1 2017. Significantly, almost a quarter of publishers (24 per cent) increased their revenue by more than 25 per cent. 

This increase can be attributed, in part, to publishers looking at alternative revenue streams. The DPRI survey found that revenue from mobile devices increased by 45 per cent in Q1 2018 compared to Q1 2017. Confidence from publishers in offering their content on a subscription only basis has seen subscription revenues take a significant leap, rising by 42 per cent when compared with Q1 2017. Following a couple of years of decline, revenue from recruitment advertising grew by 18 per cent in Q1 2018, compared with the same quarter in 2017. 

The boost to revenue also instilled confidence and optimism in AOP Board Members, when compared with last year. AOP Board Member confidence improved at the start of 2018, with a 43 percentage point increase in optimism about the financial prospects of their organisation’s digital business compared to Q4 2017. Deloitte’s wider cross-industry CFO community also expressed a positive uplift in confidence in Q1. 

There has also been a shift in priorities for future growth, with all members surveyed commenting that non-advertising revenue growth was high-priority for their business compared to 75 per cent of those surveyed 12 months ago. 

Richard Reeves, managing director, AOP, commented: “There has been a growing trend in exploring alternative methods to generate income, with the adoption of subscriptions increasing over time. There has been some debate within the industry regarding whether subscription models are the right direction for digital publishers, so it’s interesting to see such significant growth in this area during the first quarter of the year, as it signals consumers are increasingly willing to pay for quality, online content.

“While it is encouraging to see such a positive outlook during the first quarter of 2018, the challenge will be maintaining this optimism going forwards with the implementation of GDPR and ePrivacy regulation.”

Dan Ison, lead partner for media and entertainment at Deloitte, added: “The industry will be buoyed by the fact that three-fifths of members are seeing positive revenue growth.

“Interestingly, AOP Board Members are now considerably more confident about the outlook of their own business, compared to that of the industry as a whole. Previously, publishers were uncertain whether non-traditional methods were the right route to take in improving revenues, but the evidence shows that those who were successful in innovating their business models are now reaping the rewards.

“Without question, such a notable change both in the revenues and Board Member sentiment of digital publishing is very promising for the industry.”

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