“It remains a source of disappointment that the magazine industry continues to largely ignore digital subscriptions,” FIPP CEO and President James Hewes has said on the release of FIPP and CeleraOne’s Q3 2020 Global Digital Subscriptions Snapshot.
The Q3 2020 Global Digital Subscriptions Snapshot details the full impact of the COVID-19 pandemic on digital subscriptions in figures for the first time.
On launching the report, Hewes said “Digital subscriptions and paywalls are rapidly emerging as the primary revenue driver for many media businesses.
“The phenomenon of digital subscriptions and paywalls is global…There is not a country on Earth where this model is not working.”
The report highlights large news publishers based in the US and China that have experienced success with digital subscriptions over the past six months.
The New York Times digital revenues exceeded print for the first time
The titled acquired a record 669,000 new digital subscriptions over the period, earning US$185.5 million in revenue from digital subscriptions and advertising (print revenue was US$175.4 million).
The New York Times (NYT) now has 5.7 million digital subscribers. It is aiming to achieve 10 million digital subscribers by 2025.
NYT outgoing CEO Mark Thompson is quoted in the report: “We’ve proven that it’s possible to create a virtuous circle…in which wholehearted investment in high-quality journalism drives deep audience engagement, which in turn drives revenue growth and further investment capacity.”
Dow Jones digital revenues top US$1 billion
Dow Jones total subscriptions across print and digital products grew to 3.8 million over the period, which the report says was mostly driven by a 28 per cent increase in digital subscriptions.
Dow Jones reported in its full-year results that digital revenues now account for 71 per cent of total revenue – up from 63 per cent for the same period the previous year.
Across the Dow Jones group, digital subscriptions now account for 67 per cent of subscription revenues.
The Athletic reaches 1 million subscribers
Sports news website The Athletic was initially hit hard by the cessation of sports events due to COVID-19. But in September, the company reported that it had achieved 1 million subscribers.
The Athletic Co-Founder Adam Hansmann told FIPP that the pandemic should have been the end of the line for the company, but he credits the websites’s digital subscription revenue model as the reason why it stayed afloat.
Caixin sees 70 per cent subscriber growth
Chinese financial and business news website Caixin achieved a 70 per cent growth in subscribers over the last year.
The news outlet is known for its independent, investigative journalism, ensuring editorial independence with a Board of Trustees independent of management.
The report states that Caixin was the first media company in China to place all content behind a hard paywall in 2017. In the last year, the title has added 210,000 new subscribers bringing its total to 510,000.
Can digital subscriptions be successful for all print media?
Certainly the success stories highlighted in FIPP and CeleraOne’s report are encouraging from the perspective that consumers are becoming more used to paying for content.
Hewes said “Most notably, the NYT has reported that digital subscriptions are now at 5.7 million, and while its quarterly growth figure is impressive, it is dwarfed by the astonishing statistic that its digital subscriber numbers have grown by 50 per cent over the same period last year.
“This incredible growth rate, coming as it does at a time when the NYT already has scale in this area, is extremely encouraging. It should lay to rest any suggestions that paywalls and digital subscriptions represent anything other than the future of our industry.”
But will the model work for smaller publishers who can’t rely on audiences as large as the NYT, Dow Jones or The Athletic to market digital subscriptions to?
CeleraOne Managing Director York Walterscheid thinks that it can be done with a well-defined business strategy.
In particular, he believes that magazine brands should test the model to offset some of the expected decline in advertising.
“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.”
“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 said.
“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 unique selling proposition, 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.”