Amid the dark, Covid-19 clouds hanging over the media industry, digital subscriptions have been a real ray of light. As consumers go in search for well-researched stories on the pandemic, they’ve increasingly gravitated toward trusted news sources and have been willing to pay for quality content.
The true extent of this trend is revealed in the Q3 2020 edition of FIPP’s Global Digital Subscriptions Snapshot – done in association with paywall market leaders CeleraOne – which was launched on the penultimate day of this year’s virtual FIPP World Media Congress. See the video below.
“Digital subscriptions and paywalls are rapidly emerging as the primary revenue driver for many media businesses,” said James Hewes, President and CEO of FIPP. “The phenomenon of digital subscriptions and paywalls is global. You will see a wide variety of countries listed in the Snapshot. There is not a country on Earth where this model is not working.”
Joining Hewes to discuss some fascinating figures were Marc Isler, Chief Revenue Officer for Swiss media group Tamedia, and York Walterscheid, Managing Director of CeleraOne.
The New York Times is tops again
Among the eye-catching numbers they mulled over were from The New York Times, who reported a 14 per cent quarterly growth. This means the iconic brand has doubled their growth in the first true quarter of reporting coronavirus results and now has 5.7 million digital subscribers overall.
Other success stories include Dow Jones, where digital subscriptions now account for 67 per cent of subscription revenues, and The Athletic, a sports website that, after staring down the barrel in June and laying off eight per cent of its staff, has managed to hit the 1 million subscriber mark in September (a growth of 66.7%).
Topping the list of the new entries in the report is The Atlantic, whose paywall had a rocky start but who has now reached the phenomenal figure of 500,000 digital subscriptions in a short space of time. Other newcomers are Business Insider (200,000), Mail+ (80,000) and Slate+ (60,000).
To put the publishing market in context, and to show what the potential still is, the report also looks at VOD and music services. In this field, powerhouse Netflix has added another 10 million subscribers during the peak of the coronavirus pandemic.
The importance of content and close collaboration
One of the best performers in terms of groups – listed for the first time in the report – was Tamedia who now has 110,000 digital subscribers having changed from a metering model to a premium model where 30-40 per cent of all content are only available for subscribers. The group also introduced a successful day pass.
“It’s the content that drives subscriptions,” said Marc Isler. “Also, the close partnership between our department and the editorial department brought us success. It was the editorial team that, with passion, every day decided which content is premium and which is not. That is a big difference to a metering model where an algorithm is deciding this. It was key to make people in the editorial room feel they directly drive conversions.”
According to Isler, Covid has clearly had an impact on subscriber numbers.
“We have had traffic peaks in mid-March, with users increasing 85 per cent compared to the previous period,” he said. “Users also spend much more time on an article. It’s mainly Corona content, but content that goes more in depth. What makes me happy is that it’s not a completely new audience, which will disappear after Corona. It’s users who were already heavily engaged before, but didn’t convert. So far, they mostly stay with us.”
The pandemic has also changed the way Tamedia have marketed their digital subscriptions.
“We have refocused all our marketing efforts in the direction of content marketing,” Isler said. “We are now able with this premium model to see which content converts. We take our best pieces of content and offer trials of subscriptions to read it in detail. We guide people to the content first and only then to the subscription pages. It brings us growth that is tied to the content. It is the content that brings people together.”
Magazine should dip their toes more
While newspapers have forged ahead when it comes to digital subscriptions, the magazine industry continues to largely ignore the model. While there are some stumbling blocks for magazines, Walterscheid believes they should test the waters more.
“What I would like to see is more trial and error – prototyping and testing, putting out some nice content pieces in the magazine world and try to monetise it,” he pointed out. “Print still works very well so the question is how much do you want to invest and how much do you want to try.
“Technically, from a software side, a paywall is not a big thing. More important is that you have a strategy in place – objectives, key results, what is your USP, what product do you want to offer and what pricing models you want behind that. If you don’t have the right strategy in place, the software won’t help.”
Walterscheid also pointed out that a decline in advertising during the pandemic – Zenith predicts that global advertising expenditure will decrease by 9.1 per cent this year – is making more publishers consider the paywall route.
“We can see that in all our figures, and we can hear it in all the talks we have with out customers,” he said. “Nonetheless, even though we have a decline in our advertising currently, it is important to see there are two revenue streams that needs to be taken into account – ads and subscriptions. And for both these revenue streams, publishers have to have a clear strategic agenda.”
When optimising an existing paywall strategy, Walterscheid advised publishers to use the power of good software. “Don’t treat everybody the same. Try really to use the data to personalise the experience. Also, reduce the effort to get registered and/or to pay. If you have 20 clicks and you have to fill out 500 lines to get to subscription, the bounce rate will be high. Make the experience for the user as easy as possible.”