The Atlantic’s shift to subscriptions is delayed
In December 2017, The Atlantic said it was on the verge of putting up a metered paywall. Just a few months earlier, the legacy magazine publisher had launched a membership program, the Masthead, which had quickly gathered “thousands” of customers, and leadership expected that The Atlantic would be able to put up a proper paywall just a few months later.
There were a few kinks that needed to be ironed out – the price it would charge consumers, for one, the height of the paywall, for another – but the point was that 10 years after ditching its paywall, a new one would be erected, Bob Cohn, president of The Atlantic, said at the time.
More than a year later, that paywall still hasn’t launched, and there is no firm timetable in place for when it might. And instead of worrying about price point or the height of the paywall, the legacy publisher has gone back to the drawing board.
The Atlantic is currently conducting audience interviews to learn what kinds of products it could make to become a publication that people will feel compelled to subscribe to. That research is part of an extensive qualitative research program designed to help many parts of the organization turn The Atlantic into a habit-forming title, an increasingly common tactic among publishers interested in pursuing consumer revenue. The company needs to hire more engineers, data scientists and product managers, and while it expects that a new consumer revenue product will launch in the second half of 2019, there are no detailed plans for what final form the product will take.
Asked if preliminary testing caused a change to the announced plans, Cohn said it never rolled that first paywall out. “It was a realization that this requires a level of staffing that we’re not yet at.”
“We’re doing a lot more homework now,” Cohn added.
In the year that’s passed since The Atlantic’s announcement, publisher interest in consumer revenue has surged and paywalls have proliferated. That’s led some observers to worry subscriptions won’t work for most of the publishers pursuing them — and it’s raised the bar for those that still haven’t brought theirs to market.
Creating something that stands out in a crowded market requires a substantial lift, and the magazine publisher is right to be doing its homework, said Gwen Vargo, the director of reader revenue at the American Press Institute. “As we go from free to paid — and the pendulum is definitely swinging that way — you want to be sure that you’re producing content that’s valuable,” Vargo said. “There is a kind of upfront bet that you have to make, and you have to be prudent about it.”
Cohn insists there was no single moment that led to The Atlantic pausing its original paywall plans. “We made a decision to go back to first principles in the spring of 2018,” Cohn said. “The cause and effect we realized we only had one chance to get it right.”
That decision has informed much of the hiring that The Atlantic has done over the past 14 months. In February, the publisher announced plans to go on a 100-person hiring spree meant to grow headcount by more than 30 percent, to 430 people; at the time of the announcement, The Atlantic had 29 open existing positions as well.
To date, it has hired 78 people across the organization, doubling the size of its product team, which includes engineering, audience development, data science, design, growth and consumer revenue to around 50 people, Cohn said.
That group had been overdue for major investment, Cohn said, and it will need more resources to execute The Atlantic’s consumer revenue strategy at a high level. The Atlantic plans to hire an additional 50 people in 2019, a third of whom will serve on its product side, Cohn said.
Last year, The Atlantic grew its top-line revenues 13 percent, Cohn said, with every category of revenue except print advertising growing double-digits. Advertising, even with a decline in print, grew 10 percent. Its events business grew 30 percent.
Where consumer revenue fits into The Atlantic’s revenue pie isn’t clear. A spokesperson declined to offer information about how many members the Masthead currently has, saying only that it remains “relatively small” and that it is “beating industry retention rates” for first-year membership programs. The spokesperson also declined to comment on how big a slice it would like consumer revenue to eventually represent.
Note: This story has been updated from the original version that was sent to Digiday+ members. It adds clarification on The Atlantic’s work so far in developing a paywall and other details including how The Atlantic is using the audience research it is currently conducting.
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