When The Times and Sunday Times in London put up a paywall in 2010, most of the industry thought that decision was bad for business. But the Times realised digital subscriptions were the business model of the future, and today it has exceeded 565,000 digital-only subscribers, enjoying 11% year-over-year growth.
During this week’s INMA Webinar, Edward Roussel, head of digital for The Times, explained what the company had done was “make a conscious decision … that the business model of the future had to involve some type of direct payment from your readers.”
More than a decade later, that insight has paid off, and Roussel said subscriptions aren’t just the business model of today; they’re the model of the future.
Roussel shared insights into how publishers can drive digital subscriptions. And it begins, he said, by creating journalism that’s worth paying for.
Preparing for a tough future
As journalism enters the era of AI, it faces new challenges, and Roussel outlined some of the greatest threats facing news media companies. It begins with a fraying relationship between media brands and readers, making connecting with readers harder.
Adding to the problem is the trend of news avoidance, with the Reuters Institute finding 41% of people in the U.K. have either eliminated or significantly cut back on their daily news consumption — a number that has doubled over the past five years.
In addition to not being interested in the news, a growing number of people don’t trust it: “In the U.K., the number of people who say they trust news has dropped to 33% versus 51% as recently as 2015. And you’ve seen similar rates of decline in the U.S. in particular,” he said. “When you speak to younger readers on services such as TikTok, they prize influencers on TikTok or Instagram higher than media brands in terms of the people that they trust.”
While robo-journalism is often discussed in terms of the future, Roussel said it is already here, pointing to the fact that Bloomberg News produces some 3,000 stories daily using AI.
“It’s already here. And [that will] ultimately drive down the value of large categories of news,” as companies turn to robots for stories on topics like financial news, economic indicators, sports, etc.
“What that does is turn that category of news into a commodity. In other words, something that people are unlikely to want to pay for.”
But the news isn’t all bad, Roussel contended, offering five ways publishers can keep growing in the AI era. This requires moving from the current mindset and adopting a new mindset and approach.
Shifting for success
The necessary strategic shift begins with ending reliance on search and social and connecting directly with readers: “Having that direct connection with readers is incredibly important,” he said. Then, marketing teams need to pivot from demographic profiling to individual profiling.
“I think in the future, it’s going to be much more about individual profiling and individual marketing. Think about how Netflix serves you great movies or how Spotify serves you great music,” he said. But when media companies get to know their customers as individuals and understand their specific reading habits, they’ll be able to better optimise for them.
Instead of growth metrics, Roussel expects to see more interest in engagement metrics and explained that with growth metrics, “the number of people you bring into the top of your funnel is to some extent a function of your marketing spend, so the more money you spend, the more money people that you bring in.”
But what matters is how publishers retain those subscribers: “Where the battle is really won or lost is how you retain those paying subscribers. And so engagement will become increasingly important and the successful media companies will become increasingly good at it.”
As part of that engagement, readers in the AI era will continue moving away from generic news offerings and seek out more customised or personalised news services: “The era of one-size-fits-all is probably coming to an end,” he said.
Finally, he noted, successful media companies will stop focusing on the volume of news they produce and look more at its value. In a time when there’s “an avalanche of information,” readers will choose their news differently.
“People value quality, concision, and finality of their news experiences,” he said. “They don’t want to be overwhelmed.”
How publishers can take action
To make these changes, Roussel offered three actionable takeaways news media companies can implement:
- Be clear on how to measure engagement. Know what numbers correlate with retention and follow those metrics. The Times, for example, knows what frequency of visits equals better retention. Subscribers who visit three or more times in one week are less likely to churn, so The Times works to engage them through newsletters, a mobile app, and features like games and puzzles.
- Build a direct connection with the audience. Understand what each subscriber is reading and give them a customised experience. Roussel noted that such reader profiling is also important to advertising success as third-party cookies disappear.
- Refocus the newsroom. Looking at the quality of stories instead of quantity can create a richer engagement experience for subscribers. “Journalists love politics, they love war, they love crime, but actually, the news avoiders dislike all three. So that’s not to say that one shouldn't cover politics and crime and war, but we need to provide a more balanced diet,” Roussel said. “We need to have some fun, some levity, some inspiring pieces that accompany the news.”
If publishers can shift their strategies and refocus their efforts on engagement and the type of stories they generate, Roussel said they can weather whatever lies ahead.
“If we resist the temptation to be faddish and focus on strong metrics that show the engagement of readers, building that tight connective tissue with the end reader, and focusing on the quality of the journalism, we can all be very successful.”