In this newsletter, I will share INMA’s prediction for news subscriptions performance in 2023 and chat with AI about how it can assist in growing reader revenue.

If you have questions or suggestions, e-mail me today at greg.piechota@inma.org or meet me in person in Stockholm in March 2023 at the INMA Media Subscriptions Summit.

Prediction: Digital subscriptions set to further grow in 2023, albeit more slowly

In 2022, INMA saw a steady increase of digital-only news subscriptions worldwide amid dwindling engagement with news sites, rising costs of living and inflation. 

And despite higher churn, INMA expects further growth in 2023.

This is a prediction based on historical data of 160 news brands from 33 countries that participated in the INMA Subscription Benchmarking Service. The sample includes national and regional brands, on small and large markets, with new and mature paywalls. 

What were the biggest trends in online news engagement and subscriptions in 2022? What does INMA predict to happen in 2023? And why do we think news subscriptions fare better than entertainment subscriptions amid the rising costs of living and inflation?

Trends: In third quarter 2022, a median growth rate of the total number of digital-only subscriptions was 40% vs. first quarter 2021. At the same time, a median growth rate of the average monthly digital-only subscription revenue was 36%.

A few words on these statistics: Median is a half-way value in our sample of growth rates of 160 brands. It means that half of the brands in the INMA Benchmarks saw a higher volume growth rate than 40% and the other half saw a lower growth rate than 40%. Median growth rate is often interpreted as “normal performance.”

Forecast: By third quarter 2023, a median growth rate for the digital-only subscription base is predicted to further increase to 52% vs. first quarter 2021, and the revenue growth rate is set to reach 47%.

We predicted future values for both indices based on historical data on gross subscription starts and churn rates. In our forecasting, we did not account for economy or market conditions or individual brands’ marketing plans.

Despite this, we are quite confident about the forecasts. We compared our predictions and actual values in the past quarters, and we estimated a median prediction error for one-quarter-ahead forecasts to 1.3 percentage points for volume and 1.2 percentage points for revenue. Error for longer-term forecasts is likely higher.

Analysis: Since the spike in demand for news during the COVID outbreak in 2020, news Web sites across the world have seen declines in the number of online users, sessions, or pageviews. In summary, engagement with news in 2022 looked quite like engagement in 2019. 

Similar recession in attention was observed across media sectors, such as video streaming. As people in most countries returned to their pre-pandemic routines, they simply spent less time with the media.

Surveys also showed that news consumers have increasingly avoided the news, having felt overwhelmed with negative news and worn out by a sheer amount of news available.

In 2022, consumers also suffered from uncertainty around the economy. Worried about rising prices and inflation, most started to buy less or switched to lower priced products. 

This affected media subscription companies with high market penetration, such as Netflix or Spotify, and their negative outlook impacted the mood of news publishers. 

At a November INMA Media Subscriptions Town Hall, 54% participants expected a similar slow down, 7% feared a long-term recession, but 39% remained optimistic.

The optimists might have experienced what INMA had seen in the benchmarks — the sales of digital-only news subscriptions remained surprisingly stable throughout 2021 and 2022.

New starts have been elevated since the pandemic, as publishers kept converting subscribers at increasing volumes — despite declines in online traffic and likely thanks to tighter paywalls and affordable pricing. 

For example, in the third quarter of 2022, a median news brand sold on average 330 digital-only subscriptions per 1 million online users monthly. 

INMA saw a spike in cancellations in 2022 that herald the growth slow down, but average churn rates — calculated vs. a growing and maturing base — stayed assuringly low. 

For example, in the third quarter 2022, a median monthly churn rate was 3.46%. 

Opinion: Why do news publishers continue to grow subscriptions, while other sectors struggle? A few hypotheses:

• Digital news subscriptions enjoy much lower market penetration than streaming in most markets: compare 7% adults paying for news in the U.K. vs. 65% paying for Netflix or similar in 2022, per Reuters Institute.

• At this stage of the product category lifecycle, a high proportion of customers are fans and heavy users of news who treat them as essentials or justifiable indulgences.

• News subscribers tend to be wealthier than the general population and are likely less affected by the rising costs of living and simply carry on as usual.

• News subscriptions remain affordable in most markets, with an average monthly revenue per subscriber at $8.8 in parity U.S. dollars in the third quarter 2022, per INMA Benchmarks.

• Fighting for market share, 74% of the top 50 news subscription brands offered discounted trials, per INMA research, and 68% of the trials were longer than 3 months — further speeding acquisition and delaying churn. 

Based on historical trends and this market context, INMA predicts digital-only news subscriptions worldwide to further grow in 2023 in volume and revenue.

Interested in more detailed data and analysis? Join 160 brands from 33 countries that benchmark their subscription performance with INMA. 

Interview: AI can help grow news subscriptions, says AI

As millions have been playing with ChatGPT, a prototype Artificial Intelligence chatbot developed in 2022 by OpenAI, INMA asked the bot for advice (which is included here, unedited) about news subscriptions.

Greg Piechota, INMA: How could we use AI to grow digital news subscriptions?

ChatGPT, AI bot: One way to use AI to grow digital news subscriptions would be to use machine learning algorithms to analyze data on user behavior and preferences, and use this information to personalize the news content and recommendations that are shown to each individual user. 

This could help to increase the relevance and appeal of the news content, which could in turn lead to more people subscribing to the digital news service. 

Additionally, using AI to automate certain tasks, such as data analysis and content curation, could help to reduce the workload on human staff and allow them to focus on other areas of the business.

INMA: Could we use bots like you to create news articles for subscribers?

AI bot: While it is technically possible to use ChatGPT to generate news articles, it is important to note that ChatGPT is not designed to produce factually accurate or verifiable information. 

Instead, it is a language model that is trained to generate human-like responses based on the input it receives. As a result, it may not be suitable for creating news articles that are intended to be factually accurate or reliable. 

It is generally recommended that news articles be written by human journalists who have the knowledge, expertise, and fact-checking abilities to produce high-quality, accurate content. 

Using AI to assist with certain tasks, such as data analysis or content curation, can be helpful, but it should not be relied upon to produce the actual news content itself.

INMA: What about bots in news marketing?

AI bot: ChatGPT can assist in digital news subscription marketing by providing information and answering questions about the subscription, such as its cost, features, and benefits. 

ChatGPT can also assist in generating advertisements and marketing materials that highlight the value of the subscription and encourage potential customers to sign up. 

Additionally, ChatGPT can assist in providing customer support by answering common questions and concerns from potential subscribers. 

Overall, ChatGPT can help make the process of promoting and selling digital news subscriptions more efficient and effective.

INMA: OK. Try and write an ad for a digital subscription to The New York Times.

AI bot: Get unlimited access to the best in journalism with a digital subscription to the New York Times! Our expert reporters and editors bring you the latest on politics, business, sports, and more, all in one convenient place. With a digital subscription, you’ll have access to our articles, videos, and interactive features on any device, so you can stay informed on the go. 

Plus, with our constantly updating coverage, you’ll never miss a beat. Sign up now for your free trial and experience the power of the New York Times. Don’t miss out on the high-quality journalism you deserve.

Do you have a question for ChatGPT? Ask yourself. Question to human experts or peers? E-mail me at greg.piechota@inma.org.

About this newsletter

Today’s newsletter is written by Grzegorz “Greg” Piechota, INMA’s researcher-in-residence and lead for the Readers First Initiative. In his letters, Greg shares original research, analysis, and best practices in growing reader revenue.

E-mail Greg at greg.piechota@inma.org, message him on Slack, meet him at the next online meet-up or in person at the INMA Media Subscription Summit in March.

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