Digiday+ Research deep dive: Large publishers hedge their bets on subscriptions while small publishers back away

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Subscriptions are a longstanding revenue stream in the publishing industry — but they’ve also become a tricky business in the digital era. And while the bigger players still rely heavily on subscription revenue, small publishers are less enthusiastic about subscriptions.

This shows in the results from Digiday+ Research’s most recent survey of 112 publisher professionals.

Digiday’s survey found that, overall, revenue from subscriptions has remained fairly steady for publishers over the last two years. Sixty percent of publisher pros said in the first quarter of 2021 that they made at least a very small portion of their revenue from subscriptions, 58% said so in Q1 2022 and 62% said so in Q1 2023.

However, the percentage of publishers who get a large amount of revenue from subscriptions has fallen off a bit in the last two years, while the percentage who get a small amount has steadily increased. In Q1 2023, 21% of publisher pros told Digiday they made a large or very large portion of their revenue from subscriptions, down from 27% in Q1 2021. Meanwhile, 29% of publishers said in Q1 of this year that they get a small or very small portion of their revenue from subscriptions, up from 20% two years prior.

And it’s worth noting that, consistently, the publishers who have told Digiday that they get none of their revenue from subscriptions have accounted for the largest percentage. Thirty-eight percent of publishers don’t make any money from subscriptions as of Q1 of this year.

However, publishers do see the potential in their subscriptions businesses, with or without an uncertain economy. While those who get none of their revenue from subscriptions accounted for the largest percentage when breaking down publishers’ current revenue streams, those who said they will put a large or very large focus on building their subscriptions businesses in the coming months have historically accounted for the largest percentage when breaking down publishers’ potential revenue streams — although that percentage has slowly but steadily decreased.

In Q1 of this year, 39% of publisher pros said they would put a large or very large focus on building their subscriptions businesses in the next six months. That’s down slightly from the 43% who said the same in Q3 of last year, which was down slightly from the 44% who said so in Q1 of last year, which was down slightly from the 47% who said so in Q1 of 2021 — you see the pattern here.

And breaking down the data a bit further, it’s worth noting that the percentage of publisher pros who said building their subscription businesses would be a very large focus fell from 33% in Q1 2021 to 23% in Q1 2023.

At the same time, the percentage of publishers who said they will put a moderate focus on building their subscriptions businesses in the next six months has grown steadily in the last two years. Nine percent of publisher pros told Digiday in 2021 that growing subscriptions revenue would be a moderate focus, which rose to 12% in 2022, and then rose again to 17% in 2023.

Looking specifically at large publishers (or those who made more than $50 million in revenue last year), subscriptions are an important piece of the revenue puzzle — and that importance has grown significantly in the last year.

In Q1 2022, two-thirds of publisher pros who work for large publishers told Digiday that they made at least a very small portion of their revenue from subscriptions. In Q1 2023, that percentage shot up past three-quarters to 78%.

The increase in the number of publishers who make money from subscriptions was fairly evenly spread across the varying degrees to which they make money from subscriptions, though. In other words, there weren’t really any notable jumps in one particular category when breaking down exactly how much large publishers make from subscriptions.

The biggest jumps were among the large publishers who said they make a very small portion of their revenue from subscriptions and those who said they make a moderate portion. Both categories increased from 15% in Q1 2022 to 20% in Q1 2023. Meanwhile, the percentage of large publishers who told Digiday they make a very large portion of their revenue from subscriptions dropped slightly from 15% in Q1 2022 to 10% in Q1 2023.

Large publishers’ focus on building their subscriptions businesses in the coming months turned out to be a bit of a mirror image, Digiday’s survey found. The percentage of publisher pros who work for large publishers who said they’ll put at least a very small focus on building their subscriptions businesses in the next six months was unchanged in the last year: 77% in Q1 2022 and 78% in Q1 2023. But the extent to which large publishers will focus on growing subscriptions saw several notable changes over the same period.

For instance, the percentage of large publishers who said that building their subscriptions businesses will be a large focus fell significantly from 21% in Q1 2022 to just 10% in Q1 2023. But the percentage of those who said that growing subscriptions will be a very large focus grew significantly from 25% in Q1 2022 to 37% in Q1 2023.

Similarly, the percentage of large publishers who told Digiday that building their subscriptions businesses would be a very small focus fell from 15% in Q1 of last year to 5% in Q1 of this year. And the percentage who said subscriptions will be a small focus shot up from 10% in Q1 2022 to 20% in Q1 2023.

It turns out small publishers (or those who made less than $10 million in revenue last year) are relying less on subscriptions for revenue than they were a year ago, Digiday’s survey found.

In Q1 2022, 45% of publisher pros who work for small publishers said they got at least a very small portion of their revenue from subscriptions. In Q1 2023, that percentage fell to 39%. Considering that more than three-quarters of large publishers (78%) said this year that they get at least some money from subscriptions, that 39% (or hardly more than one-third) seems like a small number (that is potentially trending smaller).

Among the small publishers who are making money from subscriptions, the percentage who said they make a small portion of revenue from that part of their business did see a meaningful jump in the last year. In Q1 2022, only 4% of small publishers told Digiday they made a small portion of their revenue from subscriptions, which rose to 11% in Q1 of this year.

On the other end of the scale, the percentages of small publishers who said they get a large or very large portion of their revenue from subscriptions saw slight dips in the last year. Eight percent of publisher pros who work for small publishers said in Q1 2023 that they get a large portion of their revenue from subscriptions, down from 12% the year prior. And just 3% said they make a very large amount from subscriptions as of the beginning of this year, down from 8% at the beginning of last year.

While small publishers’ reliance on subscriptions as a revenue stream has fallen in the last year, the percentage who said they’ll focus on building their subscriptions businesses remained steady. To be exact, 69% of publisher pros who work for small publishers told Digiday in Q1 of this year that they’ll put at least a very small focus on building subscriptions in the next six months, compared with 67% who said so last year — a very slight change but still a very significant portion of small publishers.

Notably, the percentage of small publishers who said they will put a large focus on building their subscriptions businesses saw a small jump, from 12% in Q1 2022 to 17% in Q1 2023. But the percentage of those who said they would put a very large focus on growing subscriptions fell from 26% in Q1 of last year to 19% in Q1 of this year.

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