Good riddance to 2020. Hopefully everything bad about the upcoming decade has already taken place by now. For publishers, there has been at least something good from this negative situation.
The need for critical information is higher than usual. This has resulted in an increase of readership for digital news channels. For publishers, this surge is good news. Print & ad revenue is in decline. But thanks to the growing audience, publishers now have more people than ever to convert to subscribers.
But the current increase in demand for online news is likely temporary. Life will at some point go back to normal. The increases in readers, traffic and subscriptions will at some point subside. How to make this trend permanent? What lessons can publishers take away from 2020 to make a positive impact on their subscription revenue?
A great accelerator for the publishing industry
Many people are stuck at home with little to do. They have turned to digital publications, e-books, articles and other on-demand leisure reading. But has this actually benefited the publishing industry? Are people reading more books? Visiting more digital publications? Signing up for subscriptions to support the publishers?
“The crisis hit at a time when most companies were already looking to build up their e-commerce business, and the book industry is probably ahead of the curve there compared to many consumer products,” said Rebecca Nicolson, the co-founder of Short Books, in an interview with Brink News. “But coronavirus has been called ‘the Great Accelerator’ and that’s true in the books business as much as anywhere else. People are buying more books online and once habits have changed, there’s no going back. It is going to be locked in there for the future.”
This may not be the case for digital online publications. In an interview for Folio Mag, The Meeting Professional’s editor-in-chief Rich Luna noted that the true impact that COViD had on the digital publishing world will take years to assess. They had to halt the physical publication and take a fully online approach.
“It certainly took a huge toll on our industry and our revenue streams, and we had to really make some decisions,” says Luna, “We decided to stop printing the magazine. Whether it’s temporary or not, we don’t know yet,.”
In a writeup by Amol Rajan, the media editor for BBC News, he notes that COVID-19 forced the news publishing to convert to a long-overdue format: digital-only.
“To a publisher, getting the same journalism read on an iPad, say, or smartphone edition is hugely preferable,” said Rajan, “Over the past few weeks, there has been a huge marketing splurge within newspapers like the Mail and the Sun to shift readers to these navigable digital editions of the newspaper. In that sense, Covid-19 is accelerating innovation that was long overdue and likely to happen anyway. Just as this health emergency has shone a cruel torchlight on the fault-lines in our society, so it has highlighted the ill-health of the newspaper and magazine business right now.”
Back in May, The Subscription Economy Index publisher Zuora looked at subscription data for digital news. Subscriptions to digital news and media had grown by a shocking 300%.
Publications that provided COVID-19 content for free but kept paywalls intact didn’t suffer as many other businesses did. The COVID-19 induced spike in subscription growth will likely be temporary. But Zuora found that the business model for publication paywalls itself has shown large growth over the past few years.
In fact, they reported that subscription revenues “grew by more than 350% over the past seven and a half years, and is growing 5 times faster than the S&P 500 industry benchmarks”. Yet publishers are still far behind other digital content segments in paid subscriptions:
How to close the gap?
Increased reader attention creates more capabilities to experiment
Newspapers and online magazines need the revenue that subscriptions and memberships are able to bring. The industry has been struggling to snag those subscriptions for quite a few years.
Newspapers alone have lost more than 70% of ad dollars since around 2006, according to Nieman Lab. Many estimates state that half of that remaining revenue disappeared since the virus hit in March. Publications left and right are laying off editors and cutting pay. USA Today, the biggest newspaper chain in the US, is dealing with furloughs.
In parallel, digital news consumption has ramped up. The increase in reader traffic is significant. Which means a great time to experiment with different reader revenue and paywall strategies.
FIPP and INMA have both shared great insights into how others in the industry are taking advantage of the situation. The reader’s desire for content is today at a peak. It’s a great time to test out podcasts, virtual events and new paywall tactics. Small, incremental changes lead to small, incremental results. To get 10x growth, publishers need to test out something completely different.
Making paywalls more accessible through better payment methods
What’s one immediate, cheap experiment that publishers can run to improve their paywall strategy? It’s testing out simpler, more accessible payment methods on their paywall.
The choice of payment methods is usually overlooked when building out a paywall strategy. Everyone has a credit card, right? Not quite. Other digital content segments use a variety of different payment methods to generate revenue. For digital gaming, only 25% of transactions are from credit card payments.
Seeing increased traffic from readers to your content, but subscription revenue is not keeping up? Try out something completely new.
If you want to learn more about using alternative payments for reader revenue growth, download our white paper on the topic below.