As strong news cycles and positive long-term trends allow INMA to predict bright prospects for news subscriptions in 2024, it’s crucial to examine the emerging risks, too.

Risk No. 1: AI content flood and misinformation

Newsrooms face a deluge of AI-generated content, including from unreliable sources. Here is a journalistic and marketing problem: How to stand out?

• AI tsunami: By the end of 2023, U.S.-based non-profit NewsGuard identified 623 sites with AI-written articles, some producing up to 1,200 articles daily, dwarfing traditional outlets like The New York Times, which publishes about 250 articles per day.

• Quality vs. quantity: This influx risks polluting social media, search, and aggregators, lowering the overall Web content quality. Some experts predict lower quality might benefit news publishers in the long term, as frustrated users will see the value of trusted brands.

• The cost of differentiation: Increased competition for attention necessitates distinct journalism and user experiences, requiring investment in newsroom, marketing, and product. Those who afford such investments are positioned for faster growth in 2024.

Risk No. 2: The shifting social and search landscape

Publishers aiming to reach casual readers during big news events face a decline in referrals from digital platforms which are the main getaway to news for those readers, per Reuters Institute surveys.

• Declining traffic from social media: Chartbeat data shows a significant drop in referral traffic from Facebook (-48%), X (-27%), and Instagram (-10%) in 2023 vs. 2022.

• Search traffic steady: Luckily, search traffic, including Google Discover, has been more or less stable, now accounting for 37% of overall traffic to news sites, per Baekdal analysis.

• AI-driven search experiences: But the rise of AI-driven search providing direct answers instead of traditional link lists could disrupt the referral landscape.

• Focus on direct channels: 77% of executives plan to invest more in direct channels, per Reuters Institute. The problem? Direct channels serve loyal users well but do not effectively reach new users which are key to the 2024 growth.

• Limited alternatives: Only 20% executives are shifting efforts to platforms like WhatsApp or YouTube, and 17% plan to increase marketing spend to promote their brands and generate new traffic.

Risk No. 3: Economic pressures 

Rising living costs and inflation may make consumers more hesitant to subscribe or more likely to churn.

• Subscription fatigue: Cost-of-living concerns are creating a cautious environment with surveys, such as by Zuora, revealing a proportion of consumers considers cancelling some subscriptions.

• Churning toward disaster: Northwestern University saw a worrying increase in monthly churn rates of 107 U.S. newspapers, from 3% in 2021 to 5.5% in 2023.

• Passing the churn peak: Data from INMA Benchmarks are less alarming. The median churn rate peaked in the Americas in 2Q 2022 (3.4%) and internationally in 1Q 2023 (4.1%), but has since declined to 3.25% in the Americas and 3.6% internationally.

• Sector comparisons: News industry churn rates remain considerably lower than in other media sectors, such as video streaming, which has a 12-month retention rate of 45%, per Antenna, compared to 67% for a median news site.

• Subscription affordability: Despite economic concerns, news subscriptions remain affordable with a median monthly ARPU of US$8.20, adjusted internationally, and low prices likely explain consistently elevated sales despite tighter household budgets.

How to mitigate the risks of 2024? 

Invest in differentiated journalism and user experience, grow brand awareness and distribution, and stay affordable.

Navigating the future of news subscriptions in the age of AI is the headline of the upcoming INMA Media Subscriptions Summit in New York in late February. Check the agenda and join to get a toolbox for growth in 2024 and beyond.

Greg’s Readers First newsletter is a public face of a revenue and media subscriptions initiative by INMA, outlined here. INMA members may subscribe here.

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