What if digital subscriptions aren’t the answer?

By Kirk MacDonald

Pyrrhonian Partners

Toronto, Ontario, Canada


As Google and Facebook increase their share of locally available ad dollars, and with Amazon aggressively entering the local ad space, publishers are urgently rushing to tap alternative sources of digital revenue.

Many newsrooms are still struggling to capitalise on digital revenue.
Many newsrooms are still struggling to capitalise on digital revenue.

It appears digital subscriptions are the popular choice. I am a skeptic.

This is round two of paywalls. Nothing has changed since the first run at digital subscription revenue.

“Material” digital subscription revenue is a false hope for everybody but The New York Times, The Guardian, The Wall Street Journal, The Washington Post, The Globe and Mail, Los Angeles Times, The Times (UK), and a handful of other titles.

Here’s why:

  • Most regional and local newsrooms are a shadow of what they once were, affecting the depth and quality of reporting.
  • The rise of free digital competitors gives consumers alternative sources for news and information.
  • The subscription value of the titles that have been successful in generating revenue is three-fold: data, quality content verticals, and in-depth reporting of high interest (or a combination of those attributes).
  • Publishers are biased toward the quality of their content and have not looked beyond the walled garden for an honest assessment and recommendations for improvement.
  • Publishers refuse to creatively use a hybrid staff, written + aggregated content model to make up for loss of newsroom resources and generate greater reader interest.
  • There is a lack of patience in allowing for digital revenue in whatever form to materialise over five to seven years, not five to seven months.

Here are a few alternatives:

  • Become a tech and media company that can generate licensing revenue either licensing content or proprietary tech platforms (CMS).
  • Don’t let sales off the hook. The idea that digital revenue is no longer a growth engine is absurd, but will only come with new enterprise sales models (versus direct sales models). Enterprise sales models possess a deep ad stack and a combination of ad and tech features.
  • Think about replacing digital subscription revenue with membership revenue relying on increased value and not commoditised content. The Guardian is a great example.
  • Share data with advertisers to strengthen commercial partnerships (especially with ad agencies) and improve advertiser ROI with the appropriate disclaimers.
  • Forget scale. Embrace engagement and user experience.

The market opportunity in digital revenue is expanding exponentially. Don’t be left behind. 

About Kirk MacDonald

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