Video streaming services (SVODs) are entering a new phase of maturity, characterized by moderate growth in an increasingly crowded market. SVODs are shifting their focus from subscriber acquisition to implementing strategies to achieve profitable growth. Marketplace trends show that advertising and bundling services are integral to the next stage in the SVOD landscape.
According to Antenna’s new State of Subscription report, most new SVOD subscribers selected ad-supported tiers in Q4 2023 and Q1 2024. This practice will likely continue, as ad-supported subscriptions account for over half of the gross additions during this period. Notably, 61% of SVOD consumers opted for the ad-supported service, indicating a significant shift toward ad acceptance. Antenna identifies subscribers in four distinct choice groups:
Ad Takers – Always opt for ads.
Ad Avoiders – Never choose ads.
Ad Managers – Mix and match ad-supported and ad-free plans.
Ad Oblivious – Have not encountered an ad choice.
With 38% of subscriptions now ad-supported, reflecting a 7-point increase from 2023, consumers are increasingly open to ad-supported options. This trend is further apparent by the growing segment of Ad Takers, which has increased by 11.2 million since Q1 2022.
Benefits of bundling
Bundling SVOD services proves to be an effective strategy for reducing churn. Disney and Apple observed a 2 to 6-point improvement in churn rates for their bundled services compared to standalone offerings. Bundling Disney+, Hulu, and ESPN+ helps retain more subscribers than offering each service separately.
Antenna’s Bundle Benefit Ratio (BBR) measures the potential upside of bundling. It suggests that most premium SVODs have more curious customers than committed ones. This indicates the potential for bundled offerings to convert these curious customers into loyal subscribers.
Curious Customers: Users who have either canceled a service or are currently subscribed to a service for 6 months or less.
Committed Customers: Users who have subscribed to a service for over 6 months and have not canceled it before.
All Premium SVODs, except Netflix, have a higher number of Curious Customers compared to Committed Customers. Netflix’s exceptionally low Bundle Benefit Ratio indicates a higher risk of cannibalization from bundled offerings than other services. Notably, Netflix’s bundling strategies have mainly targeted its Ad-Supported tier. Conversely, Starz and Max have the highest ratios of Curious to Committed customers, indicating substantial potential gains from bundling strategies.
Effective acquisition strategies
The method of subscriber acquisition significantly impacts customer lifetime value (CLTV). Users acquired at full price can have CLTVs that are 52% higher than those acquired via free trials. Full-price subscribers tend to have higher retention rates and greater long-term value. In 2022, 65% of SVOD sign-ups came at full price from day one, continuing into 2023 and Q1 2024.
Promotions also play a critical role in driving annual plan uptake. For instance, when discounted in late 2022, the uptake of Max’s (formerly HBO Max) annual plans increased more than fivefold. This demonstrates that well-timed promotions can significantly boost long-term subscriber commitments.
Growth and churn dynamics
The overall growth of SVOD subscriptions has slowed to a more moderate pace, with a 10.2% year-over-year increase compared to 18.8% in 2023. However, specialty SVOD services have outpaced premium ones, growing at 15.8% YoY versus 9.4%. This growth is driven by niche content that appeals to specific audiences, highlighting the importance of content differentiation in the competitive SVOD market.
SVOD services must optimize pricing and packaging strategies to drive healthy performance. Ad-supported tiers will continue to play a crucial role, with increasing consumer acceptance and the potential for significant revenue from advertisements. Bundling and effective acquisition strategies will also be vital in maintaining and growing subscriber bases. The video streaming industry is evolving towards sustainable and profitable growth. As SVOD services navigate the landscape, they must balance subscriber acquisition with retention strategies, leveraging ads, bundles, and pricing tactics to achieve long-term success.
Last month, I co-led a week-long journalism program during which we visited 16 newsrooms, media outlets and tech companies in New York. This study tour provided an in-depth snapshot of the biggest issues facing the media today and offered insights into some of the potential solutions publishers are exploring to address them.
We met with everyone from traditional media players – like The New York Times, Associated Press, CBS and Hearst – to digital providers such as Complex Media and ProPublica, as well as conversations with academics and policy experts. Based upon these visits and conversations, here are four key takeaways about the state of media and content publishing today.
1. Hands-on AI experience matters
Not surprisingly, AI dominated many conversations. Although recent research shows the American public is both skeptical and surprisingly unaware of these tools, the emergence of Generative AI – and the discussions around it – are impossible to ignore.
One mantra oft repeated throughout the week was that everyone in the media will need to be conversant with AI. Despite this, research has shown that many newsrooms are hesitant about adopting these technologies. Others, however, are taking a more proactive approach. “I like playing offense, not defense, Aimee Rinehart, Senior Product Manager AI Strategy at the Associated Press, told us. “Figure out how the tools work and your limits.”
With many media companies having to do more with less, AI can help improve workflows, support labor-intensive work like investigative journalism, as well as streamline and diversify content creation and distribution. By harnessing these AI-powered functions, smaller outlets may benefit the most, given the efficiencies these resource-strapped players may be able to unlock.
Reporting on AI is also an emerging journalistic beat. This is an area more newsrooms are likely to invest in, given AI’s potential to radically reshape our lives. As Hilke Schellmann, an Emmy‑award winning investigative reporter and journalism professor at NYU, told us “we used to hold powerful people to account, now we have to add holding AI accountable.”
Echoing Schellmann’s sentiments, “every journalist should be experimenting with AI,” one ProPublica journalist said. “We owe it to our audience to know what this is capable of.”
2. Demonstrating distinctiveness and value is imperative
One fear of an AI-driven world is that traffic to publishers will tank as Generative Search, and tools like ChatGPT, remove the need for users to visit the sites of creators and information providers. In that environment, distinctiveness, trustworthy and fresh content becomes more valuable than ever. “You need to produce journalism that gives people a reason to show up,” says Ryan Knutson, co-host of The Wall Street Journal’s daily news podcast, The Journal.
In response, publishers will need to demonstrate their expertise and unique voice. That means leaning more into service journalism, exclusives, and formats like explainers, analysis, newsletters, and podcasts.
Bloomberg’s John Authers, exemplifies this in his daily Points of Return newsletter. With more than three decades of experience covering markets and investments, he brings a longitudinal and distinctive human perspective to his reporting. Alongside this, scoops still matter, Authers suggests. After all, “journalism is about finding out something other people don’t know,” he says.
Media players also need to make a more effective case as to why original content needs to be supported and paid for. As Gaetane Michelle Lewis, SEO leader at the Associated Press, put it, “part of our job is communicating to the audience what we have and that you need it.”
For a non-profit like ProPublica that means demonstrating impact. They publish three impact reports a year, and their Annual Report highlights how their work has led to change at a time when “many newsrooms can no longer afford to take on this kind of deep-dive reporting.”
“Our North Star is the potential to make a positive change through impact,” Communications Director, Alexis Stephens, said. And she emphasized how “this form of journalism is critical to democracy.”
The New York Times’ business model is very different but its publisher, A.G. Sulzberger, has similarly advocated for the need for independent journalism. As he put it, “a fully informed society not only makes better decisions but operates with more trust, more empathy, and greater care.”
Given the competition from AI, streaming services, and other sources of attention, media outlets will increasingly need to advocate more forcefully for support through subscriptions, donations, sponsorships, and advertising. In doing this, they’ll need to address what sets them apart from the competition, and why this matters on a wider societal level.
“This is a perilous time for the free press,” Sulzberger told The New Yorker last year. “That reality should animate anyone who understands its central importance in a healthy democracy.”
3. Analytics and accessibility go hand in hand
Against this backdrop, finding and retaining audiences is more important than ever. However, keeping their attention is a major challenge. Data from Chartbeat revealed that half the audiences visiting outlets in their network stay on a site for fewer than 15 seconds.
This has multiple implications. From a revenue perspective, this may mean users aren’t on a page long enough for ad impressions to count. It also challenges outlets to look at how content is produced and presented.
In a world where media providers continue to emphasize growing reader revenues, getting audiences to dig deeper and stay for longer, is essential. “The longer someone reads, the more likely they are to return,” explained Chartbeat’s CMO Jill Nicolson.
There isn’t a magic wand to fix this. Tools for publishers to explore include compelling headlines, effective formats, layout, and linking strategies. Sometimes, Nicolson said, even small modifications can make all the difference.
These efforts don’t just apply to your website. They apply to every medium you use. Brendan Dunne of Complex Media referred to the need for “spicy titles” for episodes of their podcasts and YouTube videos. Julia D’Apolito, Associate Social Editor at Hearst Magazines, shared how their approach to content might be reversed. “We’ve been starting to do social-first projects… and then turning them into an article,” she said, rather than the other way round.
Staff at The New York Times also spoke about the potential for counter-programing. One way to combat news fatigue and avoidance is to shine a light on your non-news content. The success of NYT verticals such as Cooking, Wirecutter, and Games shows how diversifying content can create a more compelling and immersive proposition, making audiences return more often.
Lastly, language and tone matters. As one ProPublica journalist put it, “My editor always says pretend like you’re writing for Sesame Steet. Make things accurate, but simple.” Reflecting on their podcasts, Dunne also stresses the need for accessibility. “People want to feel like they’re part of a group chat, not a lecture,” he said.
Fundamentally, this also means being more audience-centric in the way that stories are approached and told. “Is the angle that’s interesting to us as editors the same as our audiences?” Nicolson asked us. Too often, the data would suggest, it is not.
4. Continued concern about the state of local news
Finally, the challenges faced by local news media, particularly newspapers, emerged in several discussions. Steven Waldman, the Founder and CEO of Rebuild Local News, reminded us that advertising revenue at local newspapers had dropped 82% in two decades. The issue is not “that the readers left the papers,” he said, “it’s that the advertisers did.”
For Waldman, the current crisis is an opportunity not just to “revive local news,” but also to “make better local news.” This means creating a more equitable landscape with content serving a wider range of audiences and making newsrooms more diverse. “Local news is a service profession,” he noted. “You’re serving the community, not the newsroom.”
According to new analysis, the number of partisan-funded outlets designed to appear like impartial news sources (so-called “pink slime” sites) now surpasses the number of genuine local daily newspapers in the USA. This significantly impacts the news and information communities receive, shaping their worldviews and decision-making.
Into this mix, AI is also rearing its ugly head. While it can be hugely beneficial for some media companies—“AI is the assistant I prayed for,” saysParis Brown, associate editor of The Baltimore Times. However, it can also be used to fuel misinformation, accelerating pink slime efforts.
“AI is supercharging lies,” one journalist at ProPublica told us, pointing to the emergence of “cheap fakes” alongside “deep fakes,” as content which can confirm existing biases. The absence of boots on the ground makes it harder for these efforts to be countered. Yet, as Hilke Schellmann, reminded us “in a world where we are going to be swimming in generative text, fact-checking is more important [than ever].”
This emerging battleground makes it all the more important for increased funding for local news. Legislative efforts, increased support from philanthropy, and other mechanisms can all play a role in helping grow and diversify this sector. Steven Waldman puts it plainly: “We have to solve the business model and the trust model at the same time,” he said.
All eyes on the future
The future of media is being written today, and our visit to New York provided a detailed insight into the principles and mindsets that will shape these next few chapters.
From the transformative potential of AI, to the urgent need to demonstrate distinctiveness and value, it is clear that sustainability has to be rooted in adaptability and innovation.
Using tools like AI and Analytics to inform decisions, while balancing this with a commitment to quality and community engagement is crucial. Media companies who fail to harness these technologies are likely to get left behind.
In an AI-driven world, more than ever, publishers need to stand out or risk fading away. Original content, unique voices, counter-programming, being “audience first,” and other strategies can all play a role in this. Simultaneously, media players must also actively advocate for why their original content needs to be funded and paid for.
Our week-long journey through the heart of New York’s media landscape challenged the narrative that news media and journalism are dying. It isn’t. It’s just evolving. And fast.
Consumers value local news media, with a large majority saying that local news outlets are at least somewhat important to the well-being of their local community according to new research from Pew. Most people also say local journalists are in touch with their communities and that their local news media perform well at several aspects of their jobs, such as reporting the news accurately.
Interestingly, Republicans and Democrats both display significant confidence in local reporting, with 66% and 78%, respectively, which showcases bipartisan support. This widespread trust highlights the local media’s role in ensuring accountability and integrity in governance.
Nevertheless, the landscape continues to shift as more consumers engage with local news through online forums and social media groups. Unfortunately, these days intermediaries have moved to the forefront and diminished the direct influence – and perceived value – of news publishers. In fact, a mere 15% of Americans say they have paid or given money to any local news source in the past year – a number that has not changed much since 2018. Oddly, this coincides with the finding that a majority of Americans (63%) say they think their local news outlets are doing very or somewhat well.
Consequently, local news outlets are re-evaluating their strategies to engage audiences effectively. Addressing how local news businesses can adapt, serve their communities, reignite an interest in, and support for, news media to flourish in the current media environment remains a critical challenge for the industry.
Local news is appealing, but to smaller audiences
Around 85% of those surveyed indicate that local news outlets are at least “somewhat important” to the well-being of their local community. Similarly, a majority believe that local journalists are in touch with their communities and perform well in various aspects of their jobs, such as accurately reporting the news.
However, despite reporting significant value and trust, Pew’s trending data shows that the share of U.S. consumers who actively follow local news very closely dropped from 37% to 22% in the last eight years. Additionally, many consumers are unaware of local news’s significant financial challenges. Of these, 63% (slightly fewer than in 2018) believe their local news outlets are doing very well.
Demographics impact the perception of local news
If attention correlates to valuing local news, the industry needs to pay attention to audience behavior. A decline in attention to local news has occurred across demographic groups, though there are significant differences by age. Young adults are much less likely than their older adults to say they follow local news: In 2024, only 9% of U.S. consumers 18 -29 say they follow local news very closely, compared with 35% of those 65 and older.
Americans with higher levels of formal education are less likely than those with a high school diploma or less education to follow local news very closely. While 17% of college graduates follow local news very closely, 28% of those with a high school education or less say the same.
Among U.S. adults ages 30 and older who have not paid for local news in the past year, the most common reason they cite is that they can find plenty of free local news. This is likely influenced by the sharing of local news – or at least information about things happening locally – via social platforms. However, as platforms “distance themselves” from the news, the likelihood of people encountering news from a publisher are increasingly diminished.
While 37% cite the availability of free alternatives, the most common reason given by Americans ages 18 to 29 is a lack of interest: 46% in this group say the main reason they don’t pay for local news is that they are not interested enough in it.
Local news consumption shifts to streaming
Streaming offers a viable outlet for local news. With nearly 40% of U.S. households reachable only through streaming TV, local news can deliver a converged linear and streaming advertising strategy to access the total TV audience in a local market. This shift to streaming enables personalization in local news content while catering to individual viewer preferences. It also allows local broadcasters to monetize local inventory across a broader spectrum of premium publishers, reinventing the advertising paradigm.
The evolving landscape of local news presents challenges and opportunities for the future of journalism. While digitization transforms how news is accessed and consumed, local news’ fundamental role in informing communities remains unchanged. Local news outlets can find new and direct paths to the consumer by adapting to changing consumer preferences and embracing digital innovation. By leveraging technology and engaging more interactively with their audiences, these outlets can enhance their relevance and sustain their crucial societal role.
In the age of artificial intelligence, it could be argued that the calculus of content is changing.
Since the advent of publishing metrics, the goal has always been more: more page views, clicks, keywords and SEO. And while AI can automate various aspects of content creation and production to save digital media companies time and resources, the convenience of the technology has also allowed for a firehose of low quality content to proliferate.
But, amid the sharp increase of these junk content farms, is there a new opportunity for quality journalism to quietly reclaim its place at the fore? It’s certainly on the minds of the leadership at The Atlantic.
In April, The Atlantic announced it had reached 1 million subscribers and become profitable, by investing in areas where the company had “fairly high confidence of good returns,” according to CEO Nicholas Thompson. The 167-year-old publication currently boasts financial stability and is well-positioned to think about where it is headed as it approaches its 200th birthday.
The Atlantic’s one-million milestone is just the foundation for further growth. In a recent memo to staff, Thompson and Editor in Chief Jeffrey Goldberg wrote:
“The key to continued success is to be constructively dissatisfied with the present, and so both of us believe very strongly that our 1 million subscriptions represent merely the foundation of future excellence and growth.”
Goldberg says that he would like The Atlantic to double, then quadruple its current size, saying the company needs to figure out how to reach larger audiences around the world. “I want to set a course as The Atlantic heads towards its bicentennial in 33 years. Now is the time for us to decide this is where we want The Atlantic to go and this is how we’re going to get there,” he said.
In terms of excellence, The Atlantic’s awards speak volumes to the quality of the journalism it produces. For the third year in a row, The Atlantic was awarded General Excellence for a News, Sports, and Entertainment publication at the 2024 National Magazine Awards. No one else has done that in this century, Goldberg remarks.
“So, we have the recognition of our industry that we’re doing something right, and I feel like this is the year when we need to really focus on: what are the next large steps we take?” Goldberg said. “Because we’re in a very good spot. But I don’t want to spend the next five years defending the hill that we’re on. I want to move to some other mountain entirely.”
And, that means not just defending their reputation for journalistic excellence, or growing iteratively. It means figuring out how to reach enormous audiences around the world – and getting a whole lot of them to subscribe.
Subscription strategy with an editorial focus
Prior to the pandemic, Atlantic Chair David Bradley and Laurene Powell Jobs decided they should move into the digital subscription space. They’d had a lot of success through scale – growing web traffic and advertising, Goldberg said. The company hired Alexandra Hardiman, (currently New York Times’ Chief Product Officer), as Chief Business & Product Officer in 2018-2019, to build The Atlantic’s digital subscription model.
“We launched basically six months before the pandemic started when advertising collapsed. And we did very well in those early months. There was a lot of demand,” Goldberg recalled.
The 2019 metered model offered three annual subscription plans for readers: digital, print and digital and a premium tier, which offered exclusive access to podcasts, product discounts and priority access to events among other perks. The Atlantic earned 300,000 new subscriptions in the 12 months that followed.
The following year, the pandemic impacted the publication’s in-person events and advertising, forcing layoffs of 17% of its staff, and losses in the millions.
Now, overall revenue is up more than 10% year over year. The company says advertising booked year-to-date is also up 33% year over year. And, subscriptions to The Atlantic have increased by double-digit percentages in each of the past four years. In fact, they’ve surged 14% in the past year alone.
By 2023, The Atlantic was back on the path to profitability. According to Axios, The Atlantic adjusted its paywall to be more flexible for subscribers and was working to add new revenue streams. Then, roughly 60% of its revenue came from subscriptions, which included print magazines and digital subscriptions through Apple News.
Flexible paywalls meet journalistic excellence
The strategy was to have the best, smartest, most dynamic, flexible subscription, acquisition and retention strategies, Goldberg said. “We’ve always believed that you can have the best systems in the world for acquiring people easily, but if you don’t have a quality product to sell them, they’re not going to come, they’re not going to stay.”
“We pivoted, I would say, to a total quality model on the web. We were doing good stuff on the web for years. We had a large team of young reporters doing news analysis and quick summaries and that sort of thing. But I’ve always believed that the aspect of The Atlantic that differentiated us from everyone else was a commitment to having the highest standards and producing the most complicated, interesting, aesthetically-pleasing, well-written journalism. I think that strategy has borne fruit,” Goldberg said.
The Atlantic focused on editorial excellence, publishing stories that exemplified depth and range and drove news cycles. It recruited high-profile writers including New York Times’ Jennifer Senior and Caitlin Dickerson, who won Pulitzers in 2022 for Feature Writing and Explanatory Journalism, respectively.
“My goal here is to build the greatest writers collective in the English language. We’re halfway there,” Goldberg said. “I don’t need the biggest one. I just need the best one. There are tremendous numbers of readers of English, who want access to our writers, and so as long as there’s an audience for quality journalism, quality non-fiction, we will be okay.”
Reaching new subscribers with newsletters
In addition to a flexible digital subscription strategy and editorial excellence, The Atlantic invested in new newsletters for subscribers in 2021, bringing nine newsletter writers into the fold. Newsletters help reach different audiences, build loyalty and repetition. And as Goldberg pointed out, The Atlantic is launching new ones all of the time. Thus far, the strategy appears to be a moderate success.
“One of the best things to happen out of that is we found more great staff writers, Yair Rosenberg, Xochitl Gonzalez and Charlie Warzel, just to name three and so, it ultimately brought their following,” Goldberg said. “They’re integrated into our writers collective in a way that’s great for our readers and great for our journalism.”
High-quality content reckons with AI
As digital media companies reckon with the changes artificial intelligence brings, deciding on how to adapt or adopt, it’s becoming clear that high-quality journalism retains immense value in the AI era. It offers authenticity, context, and deep analysis that AI-generated content lacks. It provides meaningful insights, informs people and counters misinformation.
Despite the one million subscriber milestone, Goldberg isn’t ready to relax. “It’s not like a breath out. We’re not breathing easy because you’ve got to run scared in this business,” he said. “But those three things, the subscription health, financial health, journalism health and recognition, give us a great place to have meetings where we can actually think through, alright, what are we going to do with The Atlantic on its approach to its 200th birthday.”
“Because it is a very unstable industry, obviously, and I worry about small mistakes or small missed opportunities snowballing over the years. I worry about missing the opportunity to do something newer and bigger.”
Few of The Atlantic’s contemporaries are left. As Goldberg points out, many venerable magazines that came after The Atlantic – like Collier’s and The Saturday Evening Post – have disappeared.
“So it’s kind of a miracle that The Atlantic has made it through the beginning of the internet age successfully. It survived the Great Depression and the Civil War and World War II. And, so we really have to focus on what is it that made it survive? And what do we do to increase its chances of surviving and flourishing into the next phase?”
As media organizations manage shifting consumer behaviors and economic uncertainties, sustainable revenue growth remains a top priority worldwide. Understanding the intricacies of subscription retention, as well as what resonates with your audience, has never been more crucial. Given the critical importance of retention, we are seeing revived interest in the lifetime value of digital subscribers, which requires robust renewal strategies.
These days, audience insights are powered by a combination of acquisition volumes, price points, and rebounding retention rates. We analyzed extensive data from the publishers we work with at Piano from the past five years and discovered a notable resurgence in efforts to retain subscribers. This signals a strategic pivot for many publishers, who are re-prioritizing retention-centric initiatives to build loyal subscriber relationships and fuel long-term revenue growth.
Annual vs. monthly subscriptions
Consumers understand the benefits of choosing an annual offer over monthly: discounted pricing, uninterrupted service, and premium add-ons. However, our benchmark data also outlines intrinsic advantages for publishers when focusing on annual subscriptions, which shows annual users sticking around twice as long as monthly subscribers. It also reveals their annual term retention rates are nearly double those of monthly users.
Further, the duo of better retention rates and higher overall spend only compounds over time: at the end of three years, these annual subscriptions are worth 60% more than their short-term counterpart. It is easy to see the allure of deploying this type of offer strategy and explains why optimizing retention is a pivotal driver for sustained publisher growth.
Source: Piano, Inc.
Paid trials and renewal strategies
In the not-so-distant past, free trials were all the rage. However, over time, this approach did not lead to the desired stickiness. On the contrary, paid trials can leave a lasting impact not only because they offer a compelling introductory price point for new subscribers, but also provide publishers with valuable insights into consumer behaviors. By taking this approach a step further, and combining paid trial offers with annual subscriptions, publishers gain long-term users of premium products, while driving more opportunity to build loyal subscribers. Piano’s data demonstrates that paid trial subscribers are more likely to renew in year three, ultimately driving a higher lifetime value.
Reduce active churn
Once paid trials are in place, the next step is to prevent active churn, as cancellations can often occur early. As an example, auto-renewal cancellations are about 14% on day one and can rise to 38% within the first sixty days of a trial. To reduce this, immediate onboarding and communications should take place to build engagement between the subscriber and the product. Sending a welcome email, reminding users of the benefits, and highlighting top content are a few ways to keep consumption high.
In fact, even when a price increases at the renewal phase, building rapport with the subscriber can improve retention. Our aggregate client data reveals that implementing price increases of 15% to 20% for annual digital subscribers drove an increase in overall revenue of 6% to 14%. Even with a slight dip in retention that a price increase may spur (typically around 5% to 8% churn), it can still be offset with the revenue gains earned from the overall higher price point. Leveraging a grace period message that alerts potential access loss, has helped many media companies earn worthy renewal success rates.
Another fundamental of churn reduction is an interception at the point of auto-renewal and providing an offer to retain the customer when the churn behavior begins. As an example, The Daily Beast began integrating a “save” notice when the subscriber clicked on “cancel auto renew” where the customer is shown a downgrade offer to interrupt the cancellation and attempt to save the subscriber. When implementing this functionality with several publishers, we have seen up to 16% save rates on would-be lost subscribers.
Smart, effective renewal strategies are critical to capturing active subscribers and overall revenue growth. Through targeted retention efforts and personalized outreach, including regular touchpoints during a customer’s lifetime, publishers can nurture subscriber relationships and encourage continued loyalty, while reducing churn.
Renewal strategies retain customers
This is not meant to imply that the path to sustainable revenue growth will be simple. However, by refocusing on paid trials, retention, and active churn prevention—all while adopting a comprehensive approach to subscription management—publishers can approach their subscription models with confidence and build strong long term relationships with audiences.
Despite the fact that the industry has been discussing the importance of revenue diversification for at least a decade, news media organizations remain largely undiversified. In a recent study examining the financial sustainability of the industry, we found that publishers (on average) recorded 84% of their revenue from just four sources: print consumer revenue, print advertising, digital subscriptions and digital advertising. Although publishers anticipate growth in other verticals, specifically events and eCommerce, these revenue streams are negligible. Therefore, they are unlikely to be a like-for-like replacement to falling print and digital advertising revenue in most markets.
That being said, few media companies would object to multiple revenue streams that complement their core business model. In practice, however, media revenue diversification can prove difficult (and expensive) to execute, dilute your brand/value proposition and divert attention away from the core product or business unit. In this article, we will explore how news organizations can structure their thinking about diversification initiatives and explore common best practices when it comes to execution.
How media organizations can think about the path to diversification
We find it helpful for news organizations to think of diversification on a spectrum, where there is a continuum of options for news organizations both in terms of the audience segments they can target and the products they can create. These news media companies can (and often do) concurrently pursue multiple diversification initiatives, which can be plotted at different intersections on the spectrum. This spectrum is visualized in the first image.
On the x-axis is a spectrum of product options. The furthest left on this axis are the products that the organization is most known for. For news organizations, these are typically products that fulfill the core news need: accurately informing people of what is going on in the world or their community in real-time. These products include daily newspapers and news websites (such as ft.com). As you go further right across the x-axis, you expand to other products that meet other needs.
On the y-axis is a spectrum of audiences. At the bottom of the axis are core target audiences. For news organizations, these are typically people who are deeply interested in knowing what is going on in the world on a regular basis. As you go up the y-axis, you expand into audiences that don’t fit your existing or target audience demographic.
To bring this framework to life, we plotted a selection of the Financial Times’ diversification initiatives to give a sense of how news organizations can expand within and beyond their revenue diversification frontier (second image).
Best practices when it comes to media revenue diversification
As we mentioned previously, successfully executing a news media diversification strategy is hard. There is no single playbook for how to successfully execute a diversification strategy in the news media industry: success is dependent on the organization, its current position within the market and the overall market context. However, there are a few common traits that we observed when looking at the most successful organizations:
Speak to target audiences/clients and understand their needs
You need to have a good grasp of the needs within your target segment. Never start from the perspective of your own objective – e.g. “Let’s expand into America”, “let’s build a subscription mode” – as this could lay waste to product market fit.
Understand and leverage your distinctive edge
Your distinctive edge is something that you can provide your audiences or clients with that few or no other organizations can. A distinctive edge might be access to a leading journalist, knowledge of a specialist topic area, ability to produce content in a particular style or format, being home to a difficult-to-reach audience, having a well-respected and trusted brand or something else.
Acknowledge your diversification frontier
Every news media organization has its own revenue diversification frontier. We define a diversification frontier as the “comfortable limit” within which an organization can credibly and effectively expand, based on its brand and internal capabilities. Although companies can expand beyond their diversification frontier, these initiatives are risky and should be approached with caution.
Consider your optimal timing
Media organizations should avoid only exploring diversification initiatives when they become imperative. Rather, organizations should be continuously exploring opportunities for diversification, especially if they are in positions of high revenue concentration or they are experiencing systemic market decline in one of their revenue verticals.
Start small, iterate, gate investment and track key performance indicators
Not all revenue diversification initiatives are going to work. News organizations must avoid exposing themselves to unnecessary risk as a result of overconfidence or overinvestment. Instead, news organizations should run experiments to test new products or their ability to serve new audiences. Gating investment, creating independent advisory boards and setting and measuring performance against key performance indicators are all established ways of ensuring this in practice.
Underwrite new initiatives via upfront payments if possible
Often the best ideas can garner financial support at the concept stage, helping to underwrite the cost of the new initiative, reduce the upfront investment and risk and reveal demand. In practice, this involves reaching out to the most engaged audience members or most loyal advertising clients and asking them to support a new concept. Although this is not a possibility in every instance, it can be extremely effective.
Manage the wider business and be more than the sum of your parts
Once a diversified business model is achieved, the work does not stop there. In fact, successfully managing a revenue portfolio that is equal to more than the sum of its parts is very challenging. Brand uniformity, operating models, organizational design, culture, incentives, investment and financing are all critical aspects to consider and manage.
The future of revenue diversification in the news industry
Revenue diversification will remain top of mind for the news industry as concerns around declining referral traffic, gen-AI disintermediation and a challenging advertising market persist.
We anticipate that successful media and news companies will increasingly diversify into adjacent revenue streams and products. We believe that this offers news media organizations the ability to develop more resilient and sustainable business models that fund quality journalism. You only need to look so far as Schibsted’s success and their mission statement to see what this extended future might hold: “We empower people in their daily lives.”
The proportion of people avoiding news content is alarmingly high. According to the latest Reuters Institute Digital News Report, the public self-reports high levels of selective avoidance: 36% of people in the surveyed markets avoid the news “sometimes” or “often.”
That has implications for news organizations seeking to grow, engage, and inform audiences. That, in turn, limits the ability of those titles to hold power to account.
Rasmus Kleis Nielsen is Director at the Reuters Institute for the Study of Journalism at the University of Oxford. He is also the co-author of a new book entitled Avoiding the News: Reluctant Audiences for Journalism, which delves deeper into the causes of and solutions to news avoidance in greater detail.
In an interview about the book, he tells me that the idea arose from his work on the annual Digital News Report. “We noticed that in the United States almost 10% say that they use news less often than once a month or never. And as someone who believes firmly in the importance of journalism, and who used to think that everyone engaged with the news… I just kept staring at that figure.”
So, he set out to learn more, asking “Who are these people? Why do they say they use so little news? And how do they navigate the world without it?”
He found that, while the impact of public disengagement with newspapers’ missions are the most obvious consequence of news avoidance, it has less immediately apparent implications for media business models. It presents challenges around propensity to pay for news, keyword blocking – and that does not begin to account for the societal impact of citizens choosing to avoid essential news and information.
His research also found a variety of causes for news avoidance among the public, whether that was selectively or constantly. Nielsen says that the majority of news avoiders do not avoid media in general. Rather, there is something specific about news content that repels them.
The psychological impact of negative news
One of the most prominent is that news content can create psychological stress among sections of the audience who are ill-equipped to deal with it. Whether that is as a result of wider social pressures in their lives or simple exhaustion from work, Nielsen says a proportion of respondents believe they have no mental availability to engage with news content:
“What they often seek from the media is something pleasant, something that can help them recharge and renew, as they face another day of often very demanding tasks that they have to take on to provide for themselves or families.”
That is exacerbated by a perception that news content is primarily negative. The adage that “if it bleeds it leads” is undeniably true – perhaps ever more so in the age of social media. However, the trade off for news publishers is that a subset of the audience will disengage from negativity entirely.
So when the news is perceived to be overly negative audiences will choose to avoid it. That feeds the perennial problem of keyword blocking among advertisers, who also seek to avoid association with that negativity – even when the coverage is entirely warranted by a need to inform the public.
Blacklisted, by readers and advertisers
Nielsen acknowledges that news avoidance is not a phenomenon that exists in a vacuum. It feeds into those other issues like keyword blocklists: “We could probably write a whole separate book about advertisers avoiding the news. But at the end of the day, publishers who are relying on advertising will have to consider the reality that much of the public and many advertisers aren’t interested in being next to pieces of journalism that they regard as being divisive and depressing and perhaps not that valuable.”
In Avoiding the News Nielsen and his co-authors acknowledge that, in the case of people’s attitude to media, “perception is reality.” But in line with their recommendations to publishers, they also suggest potential solutions to these issues, one of which is to take a more positive approach to coverage to prevent that disengagement:
Neilsen says that “there is a good case to be made that that media literacy has been very focused on helping people be critical, which is important. But there is a companion [argument] that it’s about helping people be affirmative, about making decisions about what’s good enough in a world of imperfect choices of information.”
Payments, perception, and representation
Another prominent cause of news avoidance is that the public – still – does not feel represented by the news. They do not believe it is either by or for them. Nielsen explains: “There is a very clear sense amongst many of our interviewees that news isn’t for people like them, that news is for people who are older, who identify as male, for people who are well off.”
He likens it to the way that some people say classical music or contemporary art is something that’s “perfectly fine for other people, but it’s not really for people like me.”
That, too, has implications for media business models. An increasing number of media organizations seek to build out subscription models. However, the perception of a lack of representation shrinks the total addressable audience, limiting the potential for converting significant numbers of readers to members or subscribers.
It goes back to what Nielsen describes as a discussion around “identity and ideology.” He notes that the belief that news is not representative is not universal, nor is it unique to either left- or right-leaning audiences. Instead it comes from a wider societal sense of disenfranchisement: the perception is stronger among right-leaning people in the U.S., but among left-leaning people in the U.K. Nielsen attributes this in part to the fact that the U.K .press is perceived to skew right more generally.
However, he points out that “In the U.K., in the U.S., large parts of the public are disenchanted with politics, and they see news as intertwined with politics not in an independent from it. And that sense of alienation from politics in turn informs their relationship with journalism.”
As a result the authors of Avoiding the News say that one potential solution is that the industry needs to recognize that it currently does not speak to as wide an array of people as it could: “It is within the power of journalists and editors to think about ‘what are the sources that we feature?’ ‘What are the topics that we feature?’ ‘How do we write about communities near and far?’ And ‘is it worth more proactively trying to address these very vocal and consistent and long standing concerns many parts of the public have?’”
Community engagement and games we play
Another factor in news avoidance lies in sections of the public not being part of any “news communities.” Nielsen explains that “They don’t get any social affirmation or reinforcement, the way that many white collar people with high levels of formal education move in circles where they’re constantly affirmed that engaging with the news is important and it makes us kind of a better person. It’s not only right, it’s also righteous.”
For news organizations whose audience acquisition and retention strategies rely on bringing audience members into their own news communities, that presents a problem. It is one thing to introduce someone who already interacts with other people around news content into the fold; it is another thing entirely to create that behavior in people.
Membership-based organizations like the U.K.’s “slow news” brand Tortoise rely in part on using their engaged members as ambassadors for the brand.
However, as the success of the New York Times’ cooking and games apps make clear, news content is not the only thing that draws new audience members into the fold. Adjacent products like crosswords – which make community high scores etc. part of their appeal – are ways to sidestep this issue and potentially engage those audiences at a later date.
This time, it might really be personal
News avoidance has risen in priority among media companies’ priority lists over the past few years. On February 27th in the U.K., a House of Lords committee into the impact of technology on news saw it raised as a problem that needs to be overcome, for example. While much of that concern is predicated on the impact on the efficacy of journalism, the subtext is that news avoidance is contributing to media companies’ revenue woes.
Nielsen says that while a lot of the reasons for news avoidance are societal and structural rather than as a direct result of media companies’ decisions, there are still actions editors and journalists can undertake to mitigate it:
“I know that many journalists and news organizations feel a bit uneasy about ideas of personalization. [But] if news media and journalists want to serve everybody, they probably need a more differentiated offer including packaging things for people who may want to hear some things that did not go wrong in the world yesterday before we get to things that [did].”
Ultimately many of the potential solutions presented in the book lie in doubling down on journalism’s promise: to represent the whole public, not just the most affluent members of society, and to ensure that readers and viewers feel that representation.
Nielsen says: “I also would just invite journalists and editors to read some of what citizens told us in our interviews as we feature in the book, because I think on closer inspection, some journalists and editors may admit that people have a point about some of their criticisms of journalism.”
As publishers look for ways to accelerate audience growth, engagement, and monetization in 2024, they have a multitude of options for driving change and innovation. Last year I worked with Nick Nyhan, Managing Director and Co-Founder of Upside Analytics, to develop a model for roadmapping the innovation journey in the publishing industry. As part of that effort, we uncovered some key strategies and ideas that publishers can use to accelerate their organizational velocity in the coming year across three areas: audience growth, audience engagement and monetization.
Grow audience reach
Most publishers are already working on the obvious top-of-funnel audience growth strategies, like social media and SEO. But we identified some opportunities beyond those obvious strategies that we encourage publishers to consider.
Idea #1: Add new sites or apps for specific audience segments
Breaking your audience down into sub-segments is a critical tactic for any publisher. When you’ve identified sub-segments with strong subjects of interest, you can build on that knowledge with more advanced strategies for targeted growth in each segment, including adding new properties.
A great example of this is Gray Television, one of the largest broadcasters in the U.S. Gray owns a large number of television stations across the country, and they decided to launch “City Weekend” sites in each of their local markets featuring location-specific lifestyle content on events, food, art and culture. This segmentation-based strategy helped Gray expand its audience, increase traffic, and boost ad revenue.
Following Gray’s example, you could identify a segment of your audience that’s very interested in sports, or local business, or any other specific topic, and introduce a microsite that’s easy to market to that audience.
Idea #2: Create mobile apps for fans
Your brand’s power users – the segments of your audience that engage with you the most – are also the most likely to download your mobile app. To take your mobile strategy to the next level, tailor your mobile app to hyper-engage your power users.
This presents the opportunity to align other elements of your business with your mobile strategy. For example, you can use your website mainly to attract, engage, register, and then drive new users to your mobile app, where you can employ additional strategies to keep them engaged.
Increase audience engagement
Once you’ve gotten your audience onto your site, you need to get them to stay there and have longer session lengths. More content views and more time on site equals more affinity to your brand.
Idea #3: Cater to multi-scenario consumption
People don’t just ingest news while sitting at a computer. They could be stuck in traffic and want an audio option. They could be on the go in a subway and need an offline mode. Some people want to save stories and listen to them later on audio or watch on video when they’re sitting in front of their TV at night. There is a lot of churn going on across all of these modalities, so publishers need a strategy to consciously cater to different audience scenarios for consuming content.
At the simplest level, this might involve letting users create reading lists of stories they can access later. At the most sophisticated level, you could have a completely native team building a custom OTT app. In between are opportunities to experiment with and test modalities for various content consumption scenarios, from podcasts to mobile to TV “sit back” options.
Idea #4: Use AI to suggest related stories
Generative artificial intelligence (AI) presents an exciting opportunity for publishers. In its current state, AI is well-positioned to take on some of the more tedious or repetitive tasks in content creation workflows. For example, AI-powered tools are emerging for auto-summarization and auto-tagging.
Your content creators like to write and create content. Maybe they don’t mind summarizing. But nobody likes tagging—so why not let AI tools do that work? Auto-tagging for text, video, images, and captions makes it easier to suggest related content to your audience, keeping them on your site longer and increasing the amount of content they consume.
Monetize by segment
Before you start trying advanced monetization strategies, make sure you have the basic building blocks in place. That includes the ability to enable and measure customer loyalty, clear calls-to-action across all of your properties, and an optimized checkout process. Beyond those basics, we identified some innovative strategies publishers are using to monetize audience segments.
Idea #5: Provide special content consumption options for subscribers
As I covered in the last section on audience engagement, your audience is consuming your content in many different scenarios, whether it’s sitting in front of a computer, on a mobile phone while on the go, or in front of their TV at night. Providing special consumption options that cater to these preferences can be used to entice people to subscribe.
For example, The Irish Times uses a text-to-speech provider to convert most of its stories into an audio version. A small headphones icon appears in the corner of these stories to indicate that an audio option is available—but only for subscribers. The Irish Times incurs a cost associated with doing the text-to-speech conversion. However, by enticing higher value users to subscribe, this cost is balanced out by the revenue gain.
Idea #6: Try a freemium approach
With a freemium strategy, publishers offer a selection of content that’s available without a subscription, but make higher-value content available only to subscribers. Readers are able to see headlines and short snippets of the high-value premium content featured amongst the free content, enticing them to subscribe to get full access.
We believe that sports-related content, especially if it’s local, will be among the highest value content that publishers can offer in the future. Sports-related stories would therefore be a great candidate to offer as premium content in a freemium model (and also a great testing ground for new monetization approaches).
Ultimately innovation for media companies comes down to having the courage to try, whether it’s one or more of these ideas, or any other tactics for growing your audience and increasing your revenue. We recommend crafting a one pager that outlines the new ideas you’ll test in 2024, including where you are today, where you want to go, and the KPIs you’ll use to measure your progress. Then share that document throughout your organization and take the next steps on your media innovation journey for 2024 and beyond.
As the industry increasingly incorporates subscriptions into diversified revenue strategies, media companies need to take a fresh look at their subscription cancellation processes. Not only do customers expect streamlined cancellation processes, smart companies conceive of cancellation as a critical aspect of an effective retention strategy. And all companies must be aware of changing regulations around facilitating the cancellation process.
Using these experiences, Skrob outlines which companies are making it simple to cancel, which ones are making it difficult, and which ones offer lessons worth learning. With specific examples of what they’re doing right and what they could do better, Skrob offers an insightful look into the experience of subscribers as they try to cancel, which will help media companies design processes that leave audiences with a positive impression or – even better – convince them not to leave.
Building a retention-based cancellation process
Through his work, Skrob has found that many media companies have not developed the kind of cancellation process that is designed for retention. He finds that cancellations are an often-neglected aspect of the media business, relegated to accounting or administration. He suggests moving this function to the marketing department as an aspect of subscriber-retention.
Many media companies have created complex or opaque cancellation processes designed to dissuade unsubscribes. The effectiveness of this approach is the subject of some debate. However, the FTC has proposed the “click to cancel” rule, which would require companies to allow consumers to cancel their subscriptions in the same way, and just as easily, as they subscribed in the first place. So, whether companies like it or not, it’s time to develop easy cancellation processes that may actually improve retention.
While many types of subscription-based businesses have pushed back on this requirement, Skrob believes that there are tactics that can be incorporated to reduce the likelihood of churn. For one, companies can do a better job of communicating the benefits and value of subscription to audiences. For example, The Financial Times includes a “before you go” message which outlines exactly what subscribers lose when they cancel. The Telegraph cancellation process also includes a page that demonstrates the value of the exclusive subscriber benefits and explains what the subscriber will lose after cancellation.
Giving would-be cancellers an offer to stay increases retention, according to Skrob. He finds that upsells work better than downsells in terms of recurring revenue. He also suggests that, if you don’t have an upsell, that you consider offering a lower-priced subscription tier to retain customers.
If a customer does in fact cancel, it is important to send them a confirmation of cancellation so that they know that they’ve completed this step successfully. However, even this confirmation should be viewed as an opportunity to reengage. This, as well as communicating transparently their remaining subscription benefits and duration of subscription until cancellation is finalized, works towards building trust. And that trust will pay off as you work to regain them as a subscriber.
Case studies and a case for improved cancellation strategies
Based upon his research, and case studies examining the best (and some not so great) practices from the media companies’ processes he investigated for the report, Skrob makes a solid case for investing marketing time and energy into your subscription cancellation processes. Yes, this can positively impact subscription retention and revenue growth.
However, the report also builds out the connection between these processes and improving audience trust – something the media industry has struggled with for some time. As Skrob explains, creating cancellation processes with skill and integrity can grow trust for your brand. Cancellation management is a critical piece of subscription growth which in turn will enable your media company to invest more in the products you deliver, and help grow a sustainable media industry.
2023 was yet another rocky year for publishers. From the ad market slowdown to economic pressures affecting everything from hiring to subscriptions, there was plenty to write about for Media Voices’ annual report, Media Moments 2023.
AI was, of course, the headline trend. It has the potential to impact almost every aspect of the media business, and many commentators have speculated on how it can and will shape the coming years. There’s not a media executive out there who isn’t actively watching AI, if not experimenting with it. But AI isn’t the only trend influencing day-to-day publishing operations. Here are four more surprising things some of the industry’s most successful media brands are doing, all of which are covered in more detail in the Media Moments report.
Consolidating newsletters
Wait, aren’t newsletters the current big thing? Aren’t we supposed to be launching lots to make up for the impending death of social media and search traffic? Not necessarily, as some publishers have demonstrated. As with so many things, it turns out that less may deliver more.
The New Statesman is one such publisher. They consolidated their portfolio of economics, culture, politics and world news newsletters into just two: a daily and a weekend edition. “Instead of having a whole buffet of different newsletters and cutting the brilliance up into little segments, we just decided to give [the audience] one that we thought they’d like on Saturday and have the power of a big audience through one newsletter,” head of newsletters Harry Lambert told Press Gazette.
News publisher The Telegraph has a whopping 34 newsletters. However, head of newsletters Marie Bonheim told Peter Houston that their portfolio is under constant review. Despite the urge to “fill every niche” there is a danger of spreading your newsletter efforts too thin. “You also don’t want to double up on the same content,” she explained. “We merged a few fashion and beauty newsletters into a single, daily lifestyle newsletter.”
Undoubtedly, streamlining does more than reduce the amount of products that need to be produced, it may also serve to improve reader numbers for the remaining products, which can in turn drive revenue.
(Re)launching print magazines
Mass market magazines have continued to battle decline, with just two news and current affairs magazines in the UK posting circulation growth; satirical fortnightly Private Eye and political monthly Prospect. But for more niche titles, publishers are seeing an opportunity in low volume, high value print runs.
We saw multiple stories of print revivals and launches in 2023, from fashion title Elle Australia and music magazine NME. A piece in the Sydney Morning Herald showed that readership of popular titles like Vogue Australia and Marie Claire had increased between 2022 and 2023. Jane Huxley from Are Media, which publishes Elle, said that there were two main factors behind the renewed interest in print; the enduring brand strength of these magazines in tough economic times, and a consumer reaction to the “digital deluge.”
Advertiser interest in print appears to be on the rise too. Recent research suggests a strong preference for print advertising among consumers, with readers far more likely to pay attention and trust it in contrast to online advertising.
But the approach of newly launched or relaunched magazines will be different. Copies are more expensive and printed less frequently. The new NME will be £10 every other month, and not available on newsstands. “Rather than print thousands upon thousands of copies and try to shift them at the newsstand in bulk, we’ve changed that model up and have taken inspiration from industries like fashion, where you see the value in scarcity,” Holly Bishop, of NME Networks told New Statesman.
Print isn’t going to be right for every media company. But it can be effective as a higher-priced premium product; something special to deepen relationships with super fans.
Paywalling podcasts
As the frenzy for podcast launches finally dies down, publishers are looking long and hard at the most effective ways of monetizing them. For The Economist, that involved taking the bold decision to put a paywall in front of its entire portfolio bar one (the daily flagship podcast The Intelligence will remain free). The rest of their 18+ shows will be available as part of a full Economist subscription, or as a standalone Economist Podcasts+ offering for $4.90 a month.
Claire Overstall, SVP, Global Head of Customer at The Economist told DCN in October that they had moved the podcasts to a paid offering in keeping with their belief that subscriptions should be the way they fund their journalism.
“Paying for journalism was one of the things that we led with very early; The Economist has been doing that a lot longer than many of our peers,” she said, acknowledging that although paid podcasts aren’t commonplace, the reasoning is understood. “So that’s well-embedded in people’s minds, the way that we’ve articulated how this is supporting our journalism.”
It’s a risky move for a publisher with millions of listens across its podcast portfolio. But as tools to make the subscription process for podcasts smoother and more aligned with publisher sites improve, it’s likely we’ll see more premium brands give paywalled podcasts a shot.
Paying for podcasts may take listeners time to get used to, so companies trying this shouldn’t expect instant results. But paying for good content is increasingly normalized and (grudgingly) understood by audiences. So, it’s worth thinking about how paid podcasts could fit into a long term strategy.
ARPU over subscriber numbers
It’s hard to point to a subscription service which hasn’t raised its prices over the past 12 months. Even Spotify, which had kept its pricing the same since 2011, increased the monthly cost by $1-$2 across its tiers. In the publishing world, the price of a digital news subscription has actually increased an average of 19% in the UK.
There are multiple intertwined reasons for this trend. News fatigue and economic pressures are contributing to a subscription slowdown. In addition, after a rush to subscriptions during the pandemic, many publishers are hitting a natural plateau anyway. Inevitably, attention is now turning to retention and reducing churn.
“Subscriptions are a forever business,” wrote The Rebooting’s Brian Morrissey. “Everything in publishing takes longer than you would think. And building a subscriptions business is the ultramarathon. After early wins, subscriptions become a grind, with optimization tactics coming to the forefront.”
The Atlantic’s CEO Nicholas Thompson noted back in 2022 that he was less interested in getting a million subscriptions than he was getting to $50 million in reader revenue. “You can get to a million subs pretty easily – you can massively discount,” he said. “If you set a goal solely on subscribers, it can move you in some harmful ways.”
Defector was a good example of this more sustainable focus this year. In their third annual report, they listed a subscription revenue increase in 2023 of just 4%, when compared with 20% a year earlier. But they also managed a 90% retention rate when half of their subscribers came up for renewal.
It’s tempting to get sucked into the race for big numbers, many of which are achieved through hefty discounting. A longer-term, more sustainable view is definitely focused on metrics like retention and engagement, and making sure subscribers are satisfied with what they’re paying for.
Going forward
This isn’t to suggest that you should be immediately scrambling to reduce the number of newsletters sent, or to start flatplanning a magazine! As we found from the Media Moments 2023 report, many of the biggest challenges and opportunities publishers have faced this year have been iterations of what we’ve seen in previous years.
These trends point towards something AI cannot replicate: creating valuable content that (human) readers will be willing to pay for. Whether that be in cycling, cooking, fitness, politics or B2B, doubling down on quality and looking at ways to increase the value of what you’re producing is a winning strategy for 2024 and beyond.
The news industry has (finally) woken up to the idea that paying for journalism is a longstanding and effective strategy that must transition from print to digital. Over the past several years, there has been a push to establish reader revenue models which promise the annuity revenue and stability that digital advertising cannot.
While paid-for content is absolutely correct as a concept, the execution is far more difficult. One of the reasons for this is a real fear of trying to tackle and change editorial workflows, cadence and practices to service a digital, willing-to-pay audience.
The universal truth in news organizations globally is the “separation of church and state.” There is no doubt that editorial integrity should be protected at all costs. But in this modern world the notion that newsrooms should have little or no role in commercial endeavors – including subscription growth – is becoming increasingly obsolete, if not completely counterproductive to sustainability and growth.
As newsrooms become more representative, younger and dynamic and we pay more attention to audience diversity, there is no place for static thinking about our place in the world.
The FT’s subscription engine room
The Financial Times most definitely experienced more change in the past 20 years compared to the preceding 125 years. The advent of the internet, the iPhone, and high-speed connections completely disrupted our distribution channels and our users’ reading experiences. These digital forces also radically shifted the course of the fundamental business model of newspapers – ours included.
Across the industry, print has been in long-term decline for more than 20 years now, and advertising growth has been elusive for almost as long. Very little of our past business remains intact.
At the FT, we’ve benefited from visionary leadership that bit the bullet many years ago. We worked extremely hard (and still do) to build and grow a successful digital business in both reader revenue and carefully considered advertising strategy that has seen digital ad revenues double in the past three years. And it must be said that the development and implementation of this strategy very much included our editorial leadership and cross-departmental input.
Some of the most exciting digital product innovations that have engaged readers of the FT in updated ways are collaborative efforts that include or are driven by editorial. example this “Draw your Own Chart” from the Visual storytelling team and this fantastic visual explainer on AI offer subscribers more creatively engaging ways of getting the information they need. And the launch of FT Edit increased reader revenue by providing an option for audiences that might not otherwise be willing to pay for a full subscription.
Indeed there are vastly different conditions in this new era. So, keeping the engine room of news companies entirely isolated from commercial reality is simply not good for business. At the FT, revenue ideas may come from editorial, as in the case of FT edit, or be driven by commercial EXAMPLE.
As much as we lament the decline of print and advertising and blame the rise of social media and platforms for our woes, much of the news industry is suffering from:
A built-in “church and state” stress fracture in our businesses and the industry as a whole
Siloed thinking and an inability to collaborate effectively or to think outside the box
An unwillingness and genuine fear to try new things and experiment
Suspicion of commercial colleagues – a damaging “us and them” mentality
Product, engineering and technology teams falling on the commercial side of the fence and an often unhealthy tension between product and editorial
At the Financial Times, we have found that a closer relationship between commercial, editorial and technology can only result in revenue growth in the long term. It is also vital to carefully pick the people who can make this happen. They are the glue that holds an organization together.
There was a session at The Audiencers event in London about bridge roles and how important they are in newsrooms. Panel participant and consultant Dmitry Shishkin has made very good observations about how wonderful things happen when product and content come together.
Reader revenue models help newsrooms transform digitally
The establishment of reader revenue models (subscription or membership) at so many news organizations is positive not only for revenue generation but also for the toughest challenge of organizational and cultural change.
A paywall has a galvanizing effect on journalists who don’t want to see their hard work going on a website for free. For newsroom leaders, it helps with adjusted workflows and better copy flow to publish valuable journalism with a clear value proposition for readers.
Reader revenue strategies are entirely in lockstep with quality journalism, and not with the high-volume game of clickbait and churnalism. More importantly, for a paid model to be truly successful it will be enormously strengthened by the input and commitment of all: and this means editorial too.
On the other extreme, organizations that have not integrated their digital and print operations can suffer from related labor issues. “Print staff” may even actively campaign against transformation initiatives. This might take the form of refusing to do any digital publishing, not attending digital training, treating digitally skilled staffers as inferior, the list goes on. And this puts organizations in a tough spot.
The answer at this point is very simple: strong leadership. In a recent study, created in collaboration with the Google News Initiative, we found that leadership is a pivotal factor for sustainability and the growth and success of news organizations.
It is this trust and leadership from editors that will ultimately make the difference in the long-term fortunes of news organizations. A successful integration of print and digital, and bridging the creative side of the organization with the commercial, comes down to a clear, unified vision for success.
Print is and will remain a premium product with a definitive market niche. But to ignore the commercial realities – and digital opportunities – of our industry is to be no better than the band leader on the Titanic. Success lies in a common goal and purpose and having all staff in the same lifeboat and pulling in the same direction is the only way to leverage growth and guarantee sustainability.
About the Author
Lisa has over 25 years of experience in print-to-digital transformation, most notably at the Financial Times where she led newsroom operations, was an Assistant Editor and Managing Editor, Associate Editor and Head of Operations for FT.com. She led group-wide digital transformation projects at both of South Africa’s biggest publishers, Tiso Blackstar (now Arena Holdings) and Naspers’s 24.com.
The media industry continued its remarkable transformation in 2023, with shifts in audience behavior and the emergence of AI as a potential threat to newsrooms. As we head into an uncertain 2024, we spoke with four content industry leaders to understand the strategies that are helping media companies and content creators successfully navigate these challenges.
1. Focus on the lifetime value of your audience
During the COVID pandemic, media companies focused on acquiring subscribers. And then in the immediate aftermath, they focused on retaining those subscribers. Now their focus must shift to lifetime value, which doesn’t start when someone subscribes, but from the moment they arrive on your site—even if they’re not yet ready to subscribe. This means providing the right content at the right time with the right paywall, pricing and messaging.
“FT has gone through that journey of being acquisition-focused to then engagement-focused, retention focused and now lifetime-value focused,” said Daisy Donald, Principal Consultant and Head of Americas at FT Strategies. “There are interesting opportunities that FT has started experimenting with to create different levels of subscription products. What do you get as a registered user that’s free?” For example, one of these new subscription products is FT Edit, which is app-based and has a specific persona in mind of someone who has news fatigue and wants to pay a smaller amount of money to still get quality content.
2. Dive deep into audience segmentation
Maximizing lifetime value is difficult without understanding your audience at a more granular level. “It’s all about actually putting your audience first and thinking about their needs from day one. What are their interests as individuals rather than as a whole audience? And how can you really serve those needs?” said Madeleine White, Head of International at Poool and Editor-in-Chief at the Audiencers.
White recommends that audience teams invest in user needs analysis, with every piece of content that is created focused on meeting a specific user need and furthering a related revenue strategy. For example, one user need might be valuable for converting users into subscribers, while another is valuable for advertising revenue.
Adley Bowden, Head of Individual Investor & Editor-in-Chief at Morningstar Wealth concurs on the importance of understanding audience members as individuals: “Yes, there is an audience. But within it there are unique individuals. They segment in different ways and you can see which content drives engagement from these different profiles. We’ve done a lot of work to better understand these groupings within our audience and then better design content.”
3. Elevate human expertise in the age of AI
No discussion of content industry challenges in 2024 would be complete without addressing the elephant in the room: AI. Instead of fearing AI, media companies should recognize the important role that human expertise plays in making an AI-enhanced content strategy successful.
“I’ve seen a lot of publishers who are starting to use AI-personalized homepages based on what you’ve read previously,” said Poool’s White. “And every single one that is doing it has a maximum of maybe 70 percent of their homepage that’s personalized through AI. The rest is still in the control of their editorial team to really push the stories that matter because a machine can’t know what’s going on in the local community right now, what everyone’s talking about in offline conversations.”
Morningstar’s Bowden said that the company has found value in using AI for content translation, which leans into the strength of large language models. But maintaining the trust and authority of Morningstar’s content is critical, so “we can’t just do Google Translate, and off we go.” Instead, the company’s AI-assisted translation process includes humans in the process to perform some manual translation and ensure the quality of everything that’s published.
4. Remember that quality content is at the core of everything
New trends, tools and technologies shouldn’t obscure the fact that quality content that engages audiences is at the core of a successful media company. “I was speaking to a client of ours in Denmark, and one of the worries that they’ve been having is that they are overinvesting in their ability to perform well on SEO. So, they’re worried that their articles are written in a way that is not journalistically valuable,” said Birger Soiland, VP of Sales at Norkon. “When your focus is too much on serving up content on SEO, then you might fall into a trap of your content not being engaging enough.”
The definition of high-quality, engaging content will vary based on audience needs. Norkon’s Soiland has seen many of the company’s publishing clients successfully emphasize short-form content that is easily consumable, whether text, audio or video. For Morningstar, Bowden says that emphasizing data content gives its audience something more than just written or video content to come back to and re-engage with.
FT Strategies’ Donald aptly summed up media companies’ ability to navigate the challenges of 2024 and beyond by saying, “The media industry is the most resilient industry in the whole world. That’s why we love working in it… we are just so resilient. We adapt so well. I believe we will continue to adapt and survive.”