Reports of the subscription model’s demise are greatly exaggerated

Axios ruffled feathers within publishers’ walls last week with a post titled “The great subscription news reversal.” Headlines like those tend to bounce around publishers’ Slack channels fairly quickly, and execs at various publishers said they typically face a barrage of questions internally when they do. Last week was no different.

“It’s best to address that stuff directly and quickly,” a consumer revenue executive at one major U.S. publisher told me over breakfast last week. (Editorial staffers tend to ask the most fervently, they noted.)

Although most said they welcome discussion about their business models, publishing executives I asked about the prospect of a widespread shift away from subscriptions all held similar views: It’s highly unlikely at this point.

Publishers will continue to adjust and evolve their paywall and subscription approaches to ensure they’re extracting as much value as possible from their audiences, they said, but many remain committed to subscriptions as a core pillar of their business models and audience strategies – even as some of their competitors struggle to make them work.

“The great reversal”?

The Axios post highlighted a handful of developments from the past two years and implied that news publishers are – or might begin – turning their backs on subscription models en masse. 

It pointed to tech news site TechCrunch shuttering its subscription service last week, Time and Quartz pulling down their paywalls nearly a year ago, The Atlantic rolling out a more dynamic paywall approach in 2022, Gannett placing less content behind its paywalls, and the Washington Post’s CEO Will Lewis hinting that the company is exploring more flexible subscription options. “Most news companies have struggled to sustain momentum following the Trump-era subscription news boom,” Axios noted.

But for every publisher struggling with subscriptions, various others are seeing success. High-profile examples include the NYT, WSJ, The Economist, Bloomberg, The Financial Times, The Times, and The Information, while numerous other titles catering to more specific interests and niches are growing businesses with subscriptions at their foundation. It’s hard to imagine any of those reversing course anytime soon.

It’s also worth noting that news companies have struggled to sustain momentum across every part of their business since the Trump era, not just subscriptions. Traffic is down for many, advertiser demand is weak, and consumer interest in news is generally flagging – particularly compared with the spike in interest seen in 2020. Some suggest the mainstream media is facing extinction in its current form.

As the “headwinds” facing media businesses mount, many news publishers continue to point to subscriptions as one of the few reasons to be hopeful. And, as Toolkits has noted previously, publishers with strong reader-revenue bases continue to fare better in the current media environment than those without. 

Aligning products with business models

What is becoming increasingly apparent is revenue approaches must be employed carefully (and realistically) based on the nature of specific publishers’ editorial products and the interests and needs of their audiences. Throwing up a paywall on commoditized or low-value content and hoping for the best isn’t going to cut it when it comes to building a meaningful subscription business. 

Just because people might be willing to endure a few autoplay video ads to access content doesn’t mean they’ll put their hands in their pockets to pay for it, despite what publishers might believe. Those walking back or loosening their paywalls now perhaps weren’t best positioned to raise them in the first place, some publishing execs argue. 

“The problem in media isn’t the business model. The problem is that most of the content sucks,” Morning Brew co-founder & CEO Austin Rief posted in reply to Grueskin’s comment.

Rameez Tase, president of subscription analytics firm Antenna wrote “For many of these examples, it has absolutely nothing to do with the business model, and everything to do with product/market fit. For others, there are a dozen variants of what a subscription model could look like and the executives would do better to align their unique value proposition with a unique business model.”

In other words, applying the wrong monetization approach to a product doesn’t mean the approach in question is inherently flawed. Rather, it means the product might be more effectively monetized through other means, or it simply lacks significant commercial value in the first place.

“The #1 question each of these CEOs needs to ask is ‘Is my content commodity or scarcity?’ Unfortunately, all of these folks either didn’t ask that question or answered naively/dishonestly,” Tase added. 

Evolving approaches

Most people working in digital media know better than to pin their hopes on “silver bullet” solutions to their revenue and business model challenges at this point. Subscription models won’t magically solve publishers’ problems, but if employed carefully – and typically as part of a broader revenue mix – it’s now clear they can serve as a powerful foundation for a sustainable media business. 

However, publishers will continue to adjust and evolve their paywall and subscription approaches to ensure they’re extracting as much value as possible from their audiences in the years ahead. They would be negligent not to. 

Many publishers say they’re now taking a more holistic approach to audience monetization, for example, which will increasingly see them attempting to balance subscription revenue with other streams such as advertising, commerce, licensing and events. And yes – more will likely conclude that some or all of their content might be more successfully monetized or leveraged outside of a paywall. 

But is there a “great subscription news reversal” underway? It seems unlikely. What’s more likely is some publishers are fighting for relevance and survival and concluding that subscription models aren’t for them, while others feel their existing subscription approaches are hitting a ceiling and they’re recalibrating to unlock incremental revenue opportunities.

As for those questions hitting subscription chiefs’ inboxes: Being asked to explain or reiterate strategy and rationale is always a healthy exercise, they say. But blanket statements about the death of subscriptions for news they could do without.