- Many publishers have ported the growth attitudes that powered advertising operations over to their subscription businesses.
- Some are now beginning to think more carefully about the long-term costs of aggressive short-term growth tactics, and what strategies and approaches are necessary to fuel sustainable growth
- A reorientation around revenue instead of subscriber volume will likely prove beneficial for many publishers.
For publishers, part of the appeal of subscription models was the opportunity to move away from the volume-first mindsets that have historically underpinned ad-supported digital media businesses. Direct reader revenue should – in theory – enable them to serve their audiences in more interesting and valuable ways, and help reduce reliance on the distribution and growth hacks that have often dictated the nature of their editorial operations in recent years.
However, while some publishers have used the introduction of subscription products as an opportunity to reset and rethink their approaches to revenue generation, others have – wittingly or otherwise – simply ported over the growth attitudes that powered their advertising operations to their subscription businesses. Many have spent the past few years chasing subscriber volume for the sake of subscriber volume, often without clear strategies for how or when their subscriber numbers might translate to ongoing revenues.
This growth-first, revenue-later approach has given rise to the deep discounting, aggressive introductory offers, dubious cancellation policies and armies of retention specialists that are now common across the marketplace.
But as their subscription businesses mature and evolve, many publishers are now beginning to think more carefully about the long-term costs of aggressive short-term growth tactics, and what strategies and approaches are necessary to fuel sustainable growth. And those publishers that have taken more revenue-first approaches to growth over the past few years believe their patience and discipline is paying off.
The Seattle Times, for example, has doubled its subscriber base over the past three years to reach a total of 81,000 subscribers as of this month. It’s done that, it says, without relying too heavily on aggressive promotions or deep discounting.
“I think that this is one of the follies of the industry – this volume chase,” Kati Erwert, the publisher’s senior vice president of product, marketing and public service, told Press Gazette last week. “Strategically, we’ve looked at this in a very different way, where we talk about the sustainability of the size of our newsroom and the dollars that we need in terms of our long-term strategy.
“[We look at it from] a revenue standpoint, versus a ‘we are chasing this volume number’. Because there are all kinds of terrible things that you can do to your long-term viability and sustainability that will drive that volume number.”
Elsewhere, other major publishers are beginning to change their tunes and divert attention away from subscriber numbers and towards revenue numbers instead. Atlantic chief executive Nicholas Thompson told Press Gazette this week that he does not expect to hit one million subscribers in 2022 as previously targeted, and that his new focus is on earning $50 million in subscriber revenue. “You can get to a million subs pretty easily – you can massively discount, right? If you set a goal solely on subscribers, it can move you in some harmful ways.” Thompson reportedly said.
We also hear and see similar from publishers we work with on an advisory and consulting basis at Toolkits. Those publishers that opted early in their subscription journeys to focus on sustainable revenue growth are finding two or three years later that they’ve built viable and sustainable foundations on which to grow. Meanwhile, clients that prioritized subscriber growth above all else are facing some daunting churn challenges, and realizing that dollars – not subscriber numbers – are required to invest in ongoing content and product development.
There’s an element of moving targets here, of course. Some publishers are finding their subscriber targets are near impossible to achieve – at least in a fashion that’s sustainable – and are thinking on their feet.
But regardless of what’s driving it, a reorientation around revenue instead of subscriber numbers will likely prove beneficial for publishers across the industry, and not just for bragging rights. Emphasis on the drivers that matter – such as revenue, lifetime value, subscriber engagement and value perception – instead of short-term vanity metrics such as artificially inflated subscriber numbers and conversion rates – will increasingly become a prerequisite for viable and sustainable subscription publishing businesses.
For more practical guidance on building sustainable subscription and membership products and businesses, see the Subscription Publishing Toolkit.