Digital Subscriptions Are Growing, and Getting Nimbler

When TechCrunch shuttered its subscription product last month, the abrupt closure rattled the news industry, triggering fears that reader revenue products, and the stability they provide, were at risk of backsliding. But subscription data from multiple firms, as well as interviews with digital subscription experts, proves the opposite, and trends like an uptick in consumer agency, the evolution of flexible pricing and a more holistic understanding of consumer monetization are shaping these efforts. In 2023, median active subscriptions across media consultancy Piano's portfolio of 292 sites grew 12%, according to Michael Silberman, executive vice president of media strategy. Growth has slowed compared to previous years—down from 15% in 2022 and 36% in 2021—but the market has matured and more publishers have launched subscription products. In fact, January 2024 marked the first time that the median publisher has more digital-only subscriptions than print, according to a Mather Economics subscriber benchmark report published Feb. 1. Axel Springer, Poised for Growth, Unveils Its First US Leadership Team “More publishers are thinking about monetization holistically, which means being more flexible about subscription strategy,” said Jack Marshall, co-founder of the subscription research firm Toolkits. “The conversation is evolving beyond a binary.” After several years of focusing on subscription fundamentals, publishers are now thinking more granularly about their reader revenue strategies. In some cases, that calculus will lead to closures. As such, the closure of TechCrunch+ reflects the growing sophistication surrounding publishers’ subscription products and their attendant paywall strategies, according to Felix Danczak, vice president of go-to-market at subscription firm Zuora. Greater consumer agency News subscriptions have historically operated in a supply-led environment, one in which publishers gated a scarce resource and charged for access to it, according to Danczak. The digital era, and the proliferation of options and information, have inverted this dynamic, and customer preferences have finally caught up, meaning demand will increasingly shape the subscription market, especially around pricing. “If the customer gets to decide the price, they are willing to pay for the value they get,” Danczak said. “Then you have to be way more flexible in the thing you provide.” This shift in agency has coincided with legal developments that also empower consumers, said Marshall. New laws safeguarding customers from exploitative subscription practices, such as onerous cancellation processes or automatic renewals without notice, have further inverted the power dynamic. “The power balance is tipping toward consumers, and publishers need to accept and adapt to that,” Marshall said. Flexible pricing and products As people gain more agency, publishers will need to tailor their subscription offerings to better suit their needs. This will lead more publishers to offer products that exist in the space between subscription and non-subscription, according to Marshall. These could include product-specific subscriptions, like The Economist’s podcast subscription or The Verge’s newsletter subscriptions, or modular subscriptions that can be bundled or unbundled, like The New York Times’ Games, Cooking and All-Access offerings. This flexible thinking extends to cancellation strategies too, according to Danczak. Publishers are making it easier to cancel subscriptions, so consumers will be less hesitant to resubscribe in the future, but they are also coaxing flighty consumers to pause, downgrade or try new offerings rather than end their subscriptions outright. The strategy takes the concept of lifetime value and extends it to its logical endpoint: imagining full subscriptions, partial subscriptions, cancellations, pauses and re-subscriptions as simply different phases of a yearslong relationship. Holistic consumer monetization Dynamic paywall products, once a novelty, have become a necessity for sophisticated subscription businesses, according to Danczak. But the philosophy underpinning the technology—that different people have different needs—is expanding beyond the paywall into a broader understanding of holistic customer monetization. The New York Times Games Advertising Is More Than an Awareness Machine For example, products like Ad Revenue Insights from Piano now factor in the expected ad monetization of a specific visit when determining whether or not to present a paywall, said Silberman. In another instance, a reader whose behavior suggests they are likely to sign up for a ticketed event, click an affiliate link or subscribe to a newsletter might not hit a paywall. These kinds of insights, uncovered using machine learning, can help publishers get the most revenue possible out of every reader, which in some cases means using no paywall at all. As these technologies grow smarter, their ability to assess customers and optimize their revenue will only improve, according to Silberman. “Publishers are getting smarter about loosening and tightening paywalls to move between nurturing new users and converting subscribers,” he said. “The closer they get to that sweet spot, the more sustainable a business they can build.”

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The Next Era of Subscriptions: 3 Trends Shaping Publishers' Paid Products

Digital subscriptions are growing, and getting nimbler

Mark Stenberg

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