For nearly a decade, metro newspaper publishers have faced a particularly troubling issue: Total paid subscribers were in decline. The days of reaching anywhere from 40%-60% of households in a local market with a paid print product were gone, and digital growth did not come anywhere close to offsetting the decline.

What happened? Is this paid audience gone forever?

To put this in perspective, if you make these simple assumptions, you see today’s gap for metro publishers.

In many ways, 2020 was a rough year for publishers, but it was also a record year for digital subscription growth. Most U.S. metro publishers saw digital subscription volume growth of 30%-50%. This was meaningful growth that helped to offset some acceleration in print decline rates that many publishers experienced.

Perhaps most importantly, while not uniform across all publishers, on average, we saw that net subscriber growth turned positive across the industry. This is a crucial milestone. While pricing differentials between print and digital mean that publishers are still seeing declining total consumer revenue, publishers are coming closer to stemming the decline and returning to growth on consumer revenues.

So, what does this mean for the next few years? Can publishers continue to sustain 30%+ growth in digital subscription volume?

We decided to look at historic penetration levels that metro and local newspapers have been able to achieve and see what the implications are for the future.

Newspaper circulation changes over the last 30 years

In the United States, Sunday newspaper circulation peaked in 1990, reaching more than 63 million copies. As a percentage of estimated total households at that time, newspaper penetration was about 63%.

Post-1990, we first saw a slow and steady decline of about 0.5% per year until 2005. Then between 2005 and 2015, the decline continued to accelerate, yet was still only about 3% per year. Since 2015, the decline has accelerated to nearly 10% per year, with 2020 being the largest single print circulation decline on record.

As we can see from the chart, print circulation in 2020 was approximately half of what it was just 10 years ago. Of the 22 million print circulation lost, more than 15 million were lost in the last five years alone.

While print circulation declines have accelerated, digital subscriptions have grown significantly over the last five years. In fact, including digital subscriptions, the decline rate in total paid news audience actually slowed in the last decade, from 2.2% to just 1.7% per year. While this is certainly promising, the challenge has been that most of the digital subscription growth has been concentrated among large national publishers like The New York Times, The Washington Post, and The Wall Street Journal. These publishers account for more than two-thirds of the total newspaper digital subscriptions in the United States.

Clearly, additional sources for news alternatives have played a key role in declining circulation. While print circulation will undoubtedly continue to decline, digital subscriptions offer publishers an opportunity to flatten the decline and ultimately maintain and grow penetration of households.

The key question is what percent of households will ultimately continue to pay for news. We decided to look at one of the more mature digital metro publishers to see if there are any hints.

Case study: The Boston Globe

Through digital subscription growth, The Boston Globe has maintained penetration of nearly 25% of the number of households in market.

In 1993, slightly after peak circulation was reached in the United States, The Boston Globe had paid print circulation of slightly more than 500,000. That circulation represented more than 40% of the estimated households in the Boston-Cambridge-Quincy metropolitan statistical area.

Since then, print circulation has declined nearly 75%, falling to less than 140,000 as of 2020. However, The Boston Globe has been able to offset that decline by reaching more than 270,000 digital subscribers — one of the single highest numbers of any metro publisher in the United States. While print circulation now represents just 8% of households, digital subscription now exceeds 15%, with total penetration reaching nearly 25%.

If we have finally reached an inflection point where digital subscriber growth outpaces print declines, is it possible that publishers like The Boston Globe can continue to grow penetration even beyond 25%?

Landing spot for paid circulation penetration in a digital-only world

As a leader in digital subscriptions, The Boston Globe case study gives us a view of what potential penetration of paid products may look like for metro publishers over the next few years. But, as print advertising and circulation continues to decline, we may be inching closer to a digital-only newspaper future.

In that future, what percentage of households can publishers expect to penetrate with paid products? The answer to that question will rely on a few key areas:

• What percentage of the remaining print audience will ultimately convert to a digital-only subscription?
• Do younger audiences, who have shown less interest in paying for local news, grow into a willingness to pay for that news?
• Can newspapers adapt to create the digital news formats (audio, video, data journalism) that attract new paying audiences in a digital age?
• What does the competitive landscape look like, particularly ad-supported or low-cost digital alternatives for local news?

Right now, it is difficult to imagine a return to the pre-digital age where newspapers reach paid penetration of 40%-60% of households in their local market. However, with increased focus on improving product and marketing strategy, lighthouse examples like The Boston Globe show that gaining back lost paid news audience is possible.

Have we set the bar too low? Can we get back to 30% penetration?

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