Why a large-scale bundle could be the only hope for the subscription efforts of mid-tier publishers
For mid-tier publishers chasing subscription revenues, a sobering year lies ahead.
As subscription fatigue sets in and consumers think more carefully about what content they’re actually prepared to pay for, publishers occupying the middle ground between large, established brands and small but passionate audiences are about to find out how big (or small) their subscription businesses can really be.
For this class of publisher, the success of a large-scale subscription bundle — such as the “Netflix for news” service Apple is currently out pitching to potential partners — could be the only way to push their subscription offerings beyond the limitations of their own brands, products and distribution.
The economic feasibility and consumer demand for such a bundle remains to be seen, however, let alone any real incentive for big-brand publishers to help power such an initiative.
The growth in subscriptions in recent years at big-brand news publishers such as The New York Times and The Washington Post is evidence that consumers are willing to fork out for high-quality content. The Times grew its digital-only subscription revenue 18 percent in 2018 to reach $400 million.
At the other end of the spectrum, publishers with small but highly engaged audiences are seeing success with consumer subscriptions, too. In January, Barstool Sports convinced 8,000 people to pay $100 for its new Barstool Gold annual membership in just two days, for example, while The Athletic says it has attracted over 100,00 subscribers for its own network of local sports writers.
But publishers without a laser-focus on serving specific audiences or the brand cache and journalistic heft of brands like the Times are at risk of getting lost in between. They’ll lack the scale to compete with larger, more established brands, while a lack of focus will simultaneously dilute the appeal of their products and the price points they’re able to support.
“If you’re a paid news or lifestyle site… the reality is many of those products are really easy to substitute with something else that’s free,” says former Chartbeat CEO Tony Haile, whose new company Scroll offers consumers the opportunity to pay a subscription fee for ad-free versions of publisher pages.
“If you’re somewhere in the middle, you’re in a tough spot. You can’t charge for content but you’re not niche enough that specific audiences will look to support you,” said USA Today Network chief operating officer, Michael Kuntz, on a recent episode of the Digiday podcast.
Proposed bundles such as Apple’s will therefore prove most appealing to this middle class of subscription publisher with relatively commoditized content and little to lose.
But for big-brand publishers such as the Times and the Wall Street Journal, it’s understandable why they would balk at the idea. They have little incentive to lend their brands to a product that promotes competitors’ content while they continue to build direct-paying consumer relationships at a healthy clip. And without major publishers onboard, most Apple users will have little incentive to pay for a selection of content from brands they could take or leave.
If Apple or another major platform can convince consumers to sign up in the millions for a subscription bundle, there could be revenue growth up for grabs, therefore. But that’s no simple task, even for a company with massive distribution.
If not, middle-tier publishers may find their subscription efforts hit a ceiling that’s far lower than they’d hoped.
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