People Are Finally Paying for Content. Here’s How Publishers Are Capitalizing.
It’s tough sometimes to find the good news stories in the publishing business; more often than not, the pros are outweighed by the cons. But one shining point of light on a dark horizon is the increasing contributions readers make to the bottom line.
This month The New York Times reported subscription revenue at more than one billion dollars for 2017, accounting for 60 percent of the year’s total earnings. CEO Mark Thompson said on his February earnings call: “There are clear signs that our ‘subscription-first business model’ is proving to be an effective way to support broad journalistic ambitions.”
And in the UK, the Guardian newspaper is edging back to profitability after recruiting 800,000 paid supporters, half-a-million of them paying regularly through a mix of subscription and donations. “Our readers contribute more to this organisation now than advertising,” said Guardian Media Group CEO David Pemsel in an interview with the drum.
Away from newspaper side of the business, digital publishing pioneer Wired has decided that even if information wants to be free, it’s going to start charging. Seeing a “direct monetary relationship” with readers as a route to a “stable financial future,” Wired editor Nick Thomson announced a metered paywall with a $20 annual subscription. “It is my strong sense that paywalls are an essential part of the future of journalism,” said Thomson in an interview with Nieman Lab.
I’m already seeing ‘PIVOT TO PAID’ headlines... but before we all retreat behind our own hastily-erected paywalls to count the cash, let’s take a moment to think about what’s going on and how publishers should react.
Satisfy Consumer Appetite for Quality Content
It’s pretty easy to explain why publishers are enthusiastically repenting their Original Sin and asking readers to pay for content: Advertising revenues have flat-lined.
I won’t insult your intelligence by rehashing the ad sales challenges that weigh down every publisher — you carry them with you every day. Suffice to say digital display is unlikely to see any magazine staff getting paid “six different ways” like Karl Taro Greenfield during his early days at Time.
In the search for alternative income streams, readers are an obvious answer to publishing’s revenue question. But why are readers buying it now? Why, after almost 30 years of free digital content are millions of them finally ponying up?
The biggest driver is quality — or the general lack of it.
There is just so much bad content out there that it’s finally worth paying to cut the crap. The original Information Superhighway was like a country lane compared to today’s 26-lane Disinformation Megahighway. Take a look at internetlivestats.com if you want to scare yourself.
Mr. Zuckerberg’s recent changes to Facebook’s Newsfeed are an attempt to push the reset button on a content stream that highlights how out of control the media ecosystem has become. Recent moves by both Forbes and the Huffington post to scale back their networked content operations and cut unpaid contributors echo the need for radical decluttering and more quality.
And it’s not just crowded, it’s nasty. Think about The Atlantic closing its online comments section. Editor-in-chief Jeffery Goldberg said it was too often “hijacked by people who traffic in snark and ad hominem attacks and even racism, misogyny, homophobia, and anti-Muslim and anti-Jewish invective.”
While not guaranteed safe spaces, the quality of discourse behind a paywall is typically more civilised — trolls don’t pay.
Provide Solution to Public Concern over Trustworthy Information
The flip side of the “Crap-Content” coin is that in a time of global political turmoil reported against a backdrop of “Fake News,” people want information they can trust, some enough to pay for it.
The Guardian forged its reader relationship strategy before Britain’s Brexit vote and President Trump’s election. But CEO Pemsel says increased uncertainty over the direction of world events has highlighted the newspaper’s mission. “The role of the Guardian, as with other quality news organisations, has become more important than ever.” The Washington Post is tapping into this with its “Democracy Dies in Darkness” tag line.
Beyond simple brand trust there might even finally be a recognition amongst readers that it costs money to create great content.
“I don’t think anyone is going to see this and say that ‘Wired is throttling freedom of expression’ or ‘Wired is desperate for our money,’ Wired’s Thomson told Nieman Lab. “They’re going to see this as: ‘Wired has a smart business plan that will help it navigate the next 20 years.’”
Lastly, publishers are now more confident about restricting free access. The New York Times has halved the number of free articles readers can see each month to five, and the Boston Globe has closed paywall work-arounds, convinced that loyal readers are ready to pay up.
When it comes to conversion, social media has its supporters, but email newsletters appear to be a favorite vehicle for kicking off the paid relationship with readers. The New Yorker gets 12% of all traffic to its website from newsletters. The New York Times and The Washington Post offers readers dozens of niche newsletters to keep diverse interest groups engaged.
And print-digital bundles are still a draw. In the UK, the world’s oldest weekly magazine, The Spectator, has just announced the highest sales in its 190-year history, using digital content sampling to drive print-digital subscription sales up 11% year on year.
Marketing Subscriptions on Value — And Added Value
For other readers, the added value of a membership is the kicker.
The Atlantic launched The Masthead membership to deliver added-value through “exclusive stories, insights, and analysis from The Atlantic’s journalists and thinkers.” According to Sam Rosen, Head of Growth for The Atlantic, the scheme is already a healthy, profitable revenue stream.
WSJ+ membership gets paying readers the chance to apply for a complimentary race entry to the 2018 Paris Marathon, and if you’re lucky enough to get in, a full training plan and race advice.
Tech-business site The Information charges $399 for the privilege of exclusive content, attendance at member-only events, the opportunity to join conference calls, and access to a private Slack group. And if you’re a young professional, you’ll get in for under $200 and gain access to special “Millennial” content.
Outside the publishing sector, a recent HBR article drew a distinction between ‘Buyer‘ and ‘User’ brands. User brands have been more successful online, and promote themselves around the benefits their products bring rather than a straight sales offer.
There are parallels to this thinking in how publishers are beginning to promote their subscriptions: The “News you can use” approach lies behind The London Times promise to provide “diverse opinion to help you form your own” and The Wall Street Journal’s pledge to keep subscribers “informed and in control.”
The return to reader revenue is long overdue, and has been sparked, ironically by the insane amount of bad digital content available for free. People no longer have the time or the inclination to search for quality content from reliable sources, or scour social streams for information they trust.
Instead they are turning to trusted brands, new and old, and if publishers can deliver on the promise of quality content, reader revenues will outstrip advertiser revenues at more than just global news brands like The New York Times and The Guardian.
Peter Houston runs Flipping Pages Media, an independent consultancy and training firm, helping publishers build multi-platform success. He has run Guardian Masterclasses, spoken at Google’s ThinkPublishing and was formerly Editor-at-large for The Media Briefing. He now co-hosts the Media Voices Podcast, delivering a weekly take on the media news and guest interviews with senior players at a leading media organizations, from Facebook to Nieman Lab, The Economist to CNN.