Subscription publishers got a reality check in 2021

Publishers and creators have flocked to subscription models in recent years, enticed by opportunities to align their interests more closely with those of their audiences, extract greater revenue from their content, and generate reliable recurring revenue on which to build more sustainable long-term businesses.

But in 2021 the realities of operating a successful subscription business hit home as it became apparent that attracting new paying subscribers is no picnic, retaining them can often be harder, and – fundamentally – that creating content and products that audiences deem valuable enough to pay for on an ongoing basis is a tough nut to crack. 

Some ongoing challenges for subscription publishers were underscored by a handful of key themes, trends and developments that shaped the year:

1. The market for subscription content continued to grow
2. Subscribers demanded greater value from content-based subscription products
3. The efficacy of common marketing tactics (and gimmicks) diminished
4. Focus shifted from subscriber acquisition to retention
5. The rebundling of independent writers commenced

The market for subscription content continued to grow

Despite a challenging year overall for some publishers, the market for subscription-funded content products continued to grow, and consumers became more comfortable than ever with the notion of paying to access publisher content.

At least 30 English-language publishers said they have over 100k subs totaling 28 million subscriptions between them, The New York Times saw its best quarter ever for net new subscriptions since it launched its paywall over a decade ago, and even newsletter platform Substack said its writers attracted over 1 million paying subscribers.

Subscribers demanded greater value 

As competition for their dollars became more intense, audiences and potential subscribers expected greater value from the products being offered to them. Gaining early traction with subscriptions may have proved easy for some publishers, but many found their products and offerings were not valuable or differentiated enough to attract interest beyond a core group of customers, particularly as the pandemic eased. 

For those bringing existing audiences to the table, converting 5% or 10% to paying subscribers might have proved relatively easy. But pushing beyond that will require careful and ongoing investment in adding new and unique value to their products. The features and content that attracted one cohort of subscribers won’t necessarily attract the next.

Meanwhile, subscribers also expected greater breadth and depth from the products they already subscribed to. In response, publishers have attempted to bolster their products by adding new features and content. Multiple high-profile publications rolled out or acquired newsletters to quickly bolt on extra value, for example, while others have leaned into subscriber-only digital events, podcasts, and utility-driven content and tools. The New York Times put its Wirecutter reviews site behind a paywall in the summer, while other publishers have consistently – and sometimes quietly – moved more content behind paywalls in an attempt to both attract and retain subscribers.

The efficacy of common marketing tactics (and gimmicks) diminished 

There’s a reason publishers have gravitated towards (often convoluted) promotional offers, trials, introductory discounts, and even the use of “dark patterns” in their marketing efforts to grow their subscriber bases over the past few years. Those tactics have proved largely successful in converting new subscribers – at least in the short term.

But as consumers are exposed to a growing number of digital subscription products, gain more experience with publishers’ paywalls, and make more discerning choices about where they’re spending their subscription dollars, many publishers found the effectiveness of once-trusty marketing tactics appears to be waning. Some publishers say the efficacy of such tactics appears to have dipped significantly, year-over-year.

Audiences are becoming increasingly savvy about the nature of offers being made to them, and increasingly wary of the potential gulf between the value publishers promise them and what they’ll ultimately receive. That reality was underscored by new guidance issued to U.S. companies by the Federal Trade Commission in November, which stated – among other things – that publishers are now legally required to disclose detailed subscription terms to consumers before they make a purchase in order to combat the use of “dark patterns” and other deceptive marketing practices.

Focus shifted to subscriber retention

A focus on retention is crucial for the long-term viability of any subscription business, and that point was hammered home to some publishers with first-hand experience over the past 12 months.

As competition increased, demand for some products decreased or stalled, and the efficacy of growth hacks and introductory offers wore off, many publishers began taking their retention efforts more seriously. Some rushed to boost the value of their products with new features and content, while others stepped up their efforts to keep subscribers onboard with discounts, save rates, win-back campaigns, and more deliberate attempts to mitigate passive or unintentional subscriber churn. Others began digging through their data more rigorously to better understand their audiences’ behaviors and help inform more effective retention strategies.

Publishers will now be weighing their priorities for 2022, and considering where retaining existing subscribers sits in relation to attracting new ones, and how both relate to the long-term success of their businesses.

The rebundling of independent writers commenced

The rise of newsletters and independent publishers was touted by some as a threat to the subscription efforts of their larger, more established counterparts. Why subscribe to a broad publication when you can cherry-pick subscriptions to the niche publications covering the individual topics you care about most?

But as many independent writers began to hit a wall with content ideas, audience growth and burnout, media companies such as The Atlantic and The Information stepped in and began “acqui-hiring” many of those writers back, scooping up collections of newsletters to offer their own subscribers access to bundles of analysis and opinion from prominent voices on a range of vertical topics. 

As many subscription publishers shifted their primary focus from all-out subscriber acquisition to place more emphasis on retention, as noted above, offering subscribers access to “networks” of writers could help drive engagement and mitigate churn, the thinking goes.

That’s not to say that some independent newsletter writers and micro-media operators can’t or won’t make it alone, of course. The latest unbundling phase has already helped spawn fascinating new breeds and models for independent media companies, many of which we have had the pleasure of working with at Toolkits over the past 18 months. (Toolkits itself is — to some extent — a product of the same trend.)

But for those writers, journalists and creators who would rather focus on how to produce their best work — rather than the ins and outs of growth hacking, marketing, managing subscriber churn, negotiating sponsorship deals and contracts, fixing technology issues, invoicing and accounting, insurance, dealing with lawyers, and all the other elements that go into running a media company — embracing the rebundling could be the best path forward.

For more practical guidance on building sustainable subscription and membership products and businesses, see the Subscription Publishing Toolkit.