Major news publishers grow revenue with a blend of subscriptions and advertising

A growing number of publishers are reaching the conclusion that a blend of subscriptions and advertising provides the optimal approach for maximizing revenue, driving sustainable growth, and meeting the needs and expectations of their overall audiences.

Subscription models aren’t right for every publisher, and relatively few have demonstrated an ability to create content and products that meaningful portions of their audiences are willing to pay for on an ongoing basis. Those that have, however, increasingly say they’re successfully building robust subscription and advertising businesses alongside each other.

In the past week, for example:

• News Corporation said it reached record revenue of over $10 billion and nearly doubled its profits for the year ending on June 30, 2022, driven primarily by increased revenue from both digital subscribers and digital advertising at its news media division.
• The New York Times said its second-quarter revenue increased 11.5% on a year-over-year basis, and revenue from digital subscriptions grew 25.5%. Digital advertising contracted 2.4% during that period owing to a broad slowdown in the advertising market, but the company now plans to expand its advertising business across more of its subscriber products including Games, Cooking, and sports brand The Athletic.

In addition to the potential for increased revenues, the diversification benefits of a blended approach are also becoming clear. Digital media and publishing businesses are inherently highly exposed to macroeconomic trends, technological shifts, and rapid changes in audience demands and behavior. But as global economic conditions continue to tighten, subscription revenue is helping to stabilize some publishers’ operations as marketing budgets continue to dry up.

Operating advertising and subscription businesses in parallel remains a delicate balancing act, however. Too much emphasis on driving subscriptions can inhibit brand and audience growth and limit available advertising inventory. Meanwhile, publishers that optimize heavily to advertising revenue may find they’re leaving money on the table and foregoing opportunities to build stronger long-term relationships with their audiences.

For this reason, “freemium” subscription approaches continue to offer an attractive option for some publishers, through which specific content and audience segments are monetized via subscription, and the remainder is underwritten by advertising and sponsorship. 

Viable subscription products and models can look vastly different from one publisher and audience to the next, but as their subscription initiatives mature and evolve, many publishers are now rethinking the use of broad meters and hard paywalls and exploring more nuanced approaches designed to monetize their overall audiences more effectively.

For publishers that can create genuinely compelling subscription products, monetizing audiences via subscriptions and advertising will remain an attractive prospect, provided they install viable models and are confident in their ability to balance the two streams effectively. Those that cannot should instead focus their attention on monetization via advertising, sponsorship, commerce, and other means.