As consumers became the primary customers of news media worldwide, we know more about the strengths and opportunities of media subscriptions.

What are the weaknesses? Any threats?

According to World Press Trends’ estimates, in 2021 consumers brought US$53 billion, or 54%, of total revenue of news media publishers worldwide. Advertisers brought US$44 billion, or 46%. Advertisers used to be the primary customers of this industry for decades, but it all changed in the mid-2010s.

What are consumers already funding?

Let’s take a step back and look at the whole Internet and media industry: Web sites and apps, newspapers, magazines, books, TV, cinema, radio, music, and games. Activate Consulting valued this market in 2021 at US$2.1 trillion and broke down three key sources of revenue:

• Advertising: 33%

• Paid content: 33%

• Internet access: 35%

This means consumers actually fund most of the Internet and media sector, as they pay for content and for their access.

Activate also estimated that 79% of revenue from paid content globally came in the form of subscriptions and 21% in the form of single transactions — suggesting both consumers and firms prefer subscriptions.

Why? What are the pros and cons of media subscriptions?

S.W.O.T. analysis

There are good reasons for subscriptions attracting the attention of media executives, and here is my argument.

There are some obvious strengths:

• Proven model: This revenue model is tested, scalable, and transformative. As the consumer has become a primary customer of the industry globally, many leading companies report their revenue split reversed, too.

• Long-term focus: Subscriptions offer a reliable and predictable revenue that is good fit for journalism as it allows investment in staff, product, and helps keep newsrooms independent from governments or corporations.

• Convenience and good value: Readers accept the recurring payments as they simplify their life and result in lower prices per unit (e.g., a day of access, or an article).

Subscriptions offer also market opportunities:

• Effective channel: The Internet allows publishers to cheaply reach new markets, e.g., geographical, and we see news firms expanding nationally and internationally.

• Consumer insights: Direct relationships with readers allow data capture and unlock insights about consumers and their behaviours. Knowing them better, publishers can innovate to serve them better, too.

• Golden age: Demographics are favourable for long-term relationships as more people are educated, live longer, and remain active, e.g., professionally for longer, too.

What are the weaknesses?

• News makes and breaks: Demand for news and for subscriptions is driven by the news cycle. In down times, publishers should spend on promotion like other consumer brands, but they rarely do. After decades of digital transformation, budgets are tight. 

• Sleeping beauties: Many subscribers don’t read the product regularly and therefore are at risk of churning. Publishers struggle to engage casual readers before and after the purchase.

• Spillover of expectations: Having enjoyed global media and technology platforms, consumers expect the same level of user experience from news products. Publishers though lack resources and know how of the tech giants. 

There are some threats looming:

• News avoidance: Amid political and societal crises, many citizens get anxious, feel helpless, and actively avoid the news — even in the West where news media have the best conditions to thrive.

• Cost of attention: With new forms of media and entertainment emerging, the competition for people’s attention is rising, pushing the cost of acquiring and maintaining attention up. 

• The rise of blockchain: New digital property ownership models may slow down the shift from ownership to usage in commerce and disrupt subscriptions for access to digital content. 

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

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