News And The Subscription Equilibrium
Today, journalism is as much about packaging as it is about the actual content, writes Parry Ravindranathan.
We are living in incredible times. And it has posed new challenges to a media industry that was already being forced to evolve even before a pandemic threatened to put the clock back a few years.
In this series, I will attempt to outline some of the big changes, the challenges, and the new and promising revenue models appearing for media in this ever-changing landscape. I will begin with a piece on subscriptions, that holy grail of steady and consistent revenue that every media company, big and small, is looking for in these uncertain times for advertising.
I recently read an interview of Netflix CEO Reed Hastings, as part of the promotion of his new book ‘No Rules Rules: Netflix and the Culture of Reinvention’, where he said that there is nothing called ‘subscription fatigue’ and that a viewer will navigate towards good content wherever it is available. I had decided to test my stamina even before I read that interview or the fascinating book.
I recently quit my job of nearly eleven years and for some reason, I assumed my day would stretch considerably and needed to subscribe to enough things to keep me occupied, especially since I timed this self-imposed unemployment so perfectly with a pandemic. So, I punched in the 16 digits of my credit card and pressed ‘Submit’ for a free trial into practically everything. Every publication where I saw an interesting piece, every OTT platform where I saw a promising watch. I was so trigger happy I even subscribed to CamScanner—it isn’t banned here in Hong Kong—and ended up paying its annual fee because it slipped my mind to cancel it before the free trial ran out!
Having spent a good part of my career seeking new revenue models, this was the first time I was seeing it from the other side – as a pure, and admittedly reckless, consumer.
Here’s my take on subscriptions from my experience running a media business and now as a consumer.
Welcome Revenue
In a year where the bottom has fallen off for advertising because of the pandemic, this is being described as a golden one for subscription revenue. For some early global adopters like the New York Times, this was the first time digital revenue exceeded that of print and it was driven entirely by the growth of online subscriptions. New York Times added an amazing 669,000 subscriptions just in the second quarter of this year taking its total digital subscribers to a whopping 5.7 million. The Wall Street Journal has amassed over 2 million digital subscribers and other marquee names like Washington Post, Atlantic Media, Financial Times and Bloomberg boast of impressive growth. The growth has been led mostly by rising consumption of content by people working from home but there are encouraging signs that while the numbers are unlikely to continue to grow at this blistering pace, it’s also unlikely to go down significantly once things return to normal.
India has been a late and, in some ways, a reluctant subscriber market. For years, journalism has been distributed free on digital news platforms. The ad model was replicated from the legacy platforms but the pricing power never got pulled over. There are signs that things are changing. A few of them have announced putting their journalism behind a loose paywall while some have gone freemium with in-depth or investigative pieces kept behind the wall. Media companies are desperate to find new revenue lines and are finding subscriptions a stable one.
But how do you go from giving everything away for free to actually charging for it? How high should the paywall be? What would the effect be on traffic and hence advertising, whenever it makes a comeback? How do you deal with reader angst when you go from free to asking them to pay? I’m sure every media company grapples with that balance and there are no easy answers. But the biggest challenge is one of making the journalism and content unique and useful enough for someone to sign up, pay for it and, most importantly, stay subscribed.
I spent the last few months looking for journalism that I would be willing to pay for and I was overwhelmed by the number of quality publications. But after months of subscribing, sometimes hurriedly canceling in the last few minutes of a free trial, and paying for things in error, I reached a sort of equilibrium on subscriptions.
Narrowing It Down
From eight international publications and four Indian ones, I am now subscribing to four international ones and three in India. It was less about affordability and more about how much I can consume. This is the challenge that every digital publication will have. How do you get yourself among the top two or three subscriptions with enough consumers and get them to stay? It’s a combination of quality, uniqueness, the right pricing, and, of course, marketing. Unlike in entertainment where, as Reed Hastings says, people will go where they find interesting content, in News, a lot of what you get is highly commoditised. You won’t pay for journalism you can find everywhere else for free. This has led to subscriber growth in specific areas like business news for instance where there is more in-depth, data-led pieces and unique and actionable insight.
So, how did I make my choices? It was not an exercise I took lightly. But for constraints on my mind and pocket, I would subscribe to most publications, for god knows journalism needs the boost at the moment. I first broke it down by genre and went from there. I needed one each for general international news, business news, tech news, and one for long-form.
Subscribing to even four international publications is a costly exercise and there’s a lot of good content out there. So, I tried to find publications that were truly global, had a great user experience, and do not render me bankrupt. Not all publications that claim to be global have enough international content. Though it is changing, they often try to tick a box by having a few stories from each region. So, my choices for all four had to be the ones with the most global content. Then there is the user experience. I read and watch a lot on my mobile and iPad, so the mobile experience is important. Great content with clunky user experience is a real downer.
Today, journalism is as much about packaging as it is about the actual content.
Keeping The Subscriber Engaged
It needs to feel whole with text, audio, and video and how they all work together to make the story and the experience come alive. And there is cost. In a world, where your monthly outgo on subscriptions is increasing by the day, news is just one part of that ecosystem. So, I judge them by usage and utility. I would not subscribe to something I read occasionally. It has to be something I consume every day and is part of my daily routine. So, usage and what you pay for that usage is critical.
And then there is that unsaid rule of innovation and uniqueness. This is a yardstick I use across these publications.
In India, you don’t have many paywalls, so I boiled it down to one for business news, the second was a general news publication I grew up with that recently went behind a paywall and for the last one, I picked a new platform that provides in-depth, investigative and analytical content. I followed the same approach of looking at cost, user experience, and utility that I used for international publications, but with a few differences. I already got a lot of domestic Indian news for free. What I also needed was accurate, credible, and largely unbiased publications. Basic needs, you would think, but increasingly hard to find in the Indian news ecosystem. I also look for those doing interesting things and trying to innovate, again not easy to find in a cash strapped environment. Not surprisingly, two of the three I chose to pay for were digital-only publications. The third publication was from a habit formed 30 years ago!
All of the above met a certain need for me but I must admit I’m fickle and continued loyalty depends heavily on whether they will hold my attention.
As more and more publications in India put their journalism behind a paywall, it’s worth remembering this is just the first step in a difficult journey with different pressure points. Where once they had to keep an advertiser happy, now their contract is directly with the consumer. This needs a level of extra care and responsibility in addition to a different way of thinking, culture, and focus. And neither can media companies rely on subscriptions alone. They will need to try new things, experiment, and be in a permanent state of innovation and paranoia to thrive. And remember subscriptions are not the ultimate elixir of growth either. While, if you take Reed Hastings’ word, there may be no such thing as ‘subscription fatigue,’ there definitely is something approaching a ‘subscription equilibrium,’ measured possibly by a combination of mind space, utility, affordability, and uniqueness. Every news media company is competing for attention, and those finite dollars in the consumer’s pocket, with everyone – Netflix to Amazon, LinkedIn to online education sites, thank god for them... and in my case, well, Camscanner!
Parry Ravindranathan is a global media executive and has worked for Bloomberg, Al Jazeera English, Network18, and CNN.
The views expressed here are those of the author and do not necessarily represent the views of BloombergQuint or its editorial team.