Subscriptions Are a Function of Reader Utility

In the quest for stability and growth, media companies large and small have globbed onto subscriptions as their business model of choice. And for good reason: getting the reader to directly pay for the product is one of the most straightforward models on the planet.

But in the quest for subscriptions, publications forgot a cardinal rule—people typically only pay for something that they want or need. And those wants and needs evolve over time.

Case in point, the Washington Post. According to The Wall Street Journal:

One document provided a stark snapshot: The site had about 66 million monthly unique visitors in October, down 28% from last year. Most major publishers have suffered audience declines from 2020, when national politics and the Covid-19 pandemic lifted readership. Several of the Post’s rivals, including the New York Times, the Journal, Vox Media and CNN, had smaller declines in that time frame, according to the document, which cited data from Comscore.

The outlet had 2.7 million digital subscribers as of October, according to the internal document, down from roughly three million in January.

Titled “Industry Insights: Younger Audiences,” it says that only 14% of Washington Post subscribers are under 55, compared with 61% of the U.S. adult population.

If that last bit is not the pot calling the kettle black, I don’t know what is. Nevertheless, what the Post failed to anticipate and has struggled to overcome is an appreciation for the evolution of readers’ taste. Two years ago, politics was all that mattered. Today, not so much.

Paying for a generalist news source—and one linked more heavily to politics post Trump—was probably not something people were going to pay for long-term.

Last year, I interviewed Mike Orren, Chief Product Officer at Dallas Morning News, for the podcast. One of the questions that came up was why younger people don’t pay for news. And he said something interesting:

Orren spelled out the perfect psychographic for a local subscriber: people that own homes, pay taxes, vote and have children. That is the psychographic.

And yet, everyone always tries to find ways to get the younger generation to pay for news and, according to Orren, it never works. And that’s okay because while they’re not ready now, they may be in the future.

But this points to a problem in the industry. “We [local media overall] messed up and lost the current, say, 40-50 something generation because they were the hybrids and we didn’t give them a great experience in print or digitally. We left them hanging on both ends and so, that market, is drastically underrepresented in our industry subscriber roles.”

While the Post is not entirely a local paper, for any publication, I think the same rules apply. Getting a subscriber to pay for this sort of news requires an emotional attachment. If you own a home, pay taxes, vote, and have children, the emotional attachment is wanting to make sure your status quo doesn’t change. If you don’t fit that psychographic, why pay? Over the past couple of years, the emotional attachment was fear of Trump. And, to a lesser extent, a feeling of civic responsibility. Now? Not so much.

As I see it, there are really only two types of content people will truly pay for. The first is entertainment. This is why I pay for Netflix, HBO Max, Disney+, Spotify, and so many other subscriptions. The second is content related to money. If you can help me make more money or invest better, I’ll pay. For the record, b2b news fits this second bucket because you’re giving me information to be better at my job, thus I will get more money.

To be clear, while the Post is struggling unusually, it’s also not entirely alone.

The New York Times, the growth of its news product has ebbed and flowed. In Q1, it added 167,000 subscriptions for news and 134,000 for Cooking and Games. In Q2, it added 77,000 news subscriptions and 65,000 in Cooking and Games. And finally, in Q3, it rebounded by adding 320,000 in news and 135,000 in everything else.

And lest we forget that The Wall Street Journal has had a lot of downward pressure. According to a story published in the Times:

“The No. 1 reason we lose subscribers is they die,” goes a joke shared by some Journal editors.

In July, Mr. Murray received a draft from Ms. Story’s team, a 209-page blueprint on how The Journal should remake itself called The Content Review. It noted that “in the past five years, we have had six quarters where we lost more subscribers than we gained,” and said addressing its slow-growing audience called for significant changes in everything from the paper’s social media strategy to the subjects it deemed newsworthy.

The issue with that joke is that you can’t compete with death.

What does all of this point to? Why is the Times seeing success while the others are experiencing more struggle? I think it boils down to the time horizon of the Times.

My suspicion is that The New York Times has some problems with acquiring a younger generation to pay for the news. While probably not as bad as The Post (84% really is a rough number), it’s likely still not where it would want to be. But rather than spin its wheels trying to figure out how to convert younger people to the news product, it instead figured out what younger people might want.

Therefore, the Times has zeroed in on the entertainment side of things. Games and Cooking are both for fun. Even its attempts at Wirecutter becoming a subscription product are tied to financial incentives; people want to make sure they’re buying the right thing.

The reader’s utility was entertainment.

But if you’re a news organization, how does this really help and not deviate too much from the strategy? For The Times, this returns to the time horizon thing. It’s been owned by the family for generations, so it is trying to acquire users today that will be loyal for decades. Therefore, if you get someone paying for games and cooking in their 30s or 40s, they’ll have a decade of brand loyalty when they maybe become the target market for news.

I’m not suggesting the Washington Post or Wall Street Journal should spin up crosswords or cooking businesses, but I do think it begs the question: what could these brands create that serve the audience rather than just trying to force its news product?

In the original Wall Street Journal piece, the reporters offered:

This year, executives discussed buying theSkimm, a female-skewing media startup known for its breezy newsletters, but no such deal has materialized, according to people familiar with the matter.

I think this is a mistake. This would be an attempt at refocusing that audience on WaPo news content. Instead, what the Post should figure out is how to solve a true utility for its younger audience. One area that I believe would stand out is personal finance.

Of the three major publications—Times, Journal, and Post—the Washington Post has actually published the most content on its personal finance section so far this month with six pieces. The Times has published five (one of which touches on why Christmas trees cost more this year) and The Journal has only published three.

People in their 30s are having kids and are trying to buy houses. There is uncertainty about what’s going on with inflation. There isn’t good insight into what’s going to happen with the markets. Getting things right from a personal finance perspective is so important to the same group of people that may not find as much utility in political news.

I get it’s not as exciting as covering the latest political scandal, but readers need it. So, these publications should lean into it. Build something that helps people economically. And then build loyalty from there. As they continue to grow, their needs for more generalist news may change. Or, they may see the message that “Democracy Dies in Darkness” for the 100th time and finally decide to pull the trigger.

The business model always follows the users’ needs. For many, it was an anomaly that they wanted national news. But for many publications, building products that they actually need could help these media companies see more growth. It may not follow the mission of journalism to a T, but it can fund the journalism. Just as The New York Times has done with its non-news subscription products.

Thanks for reading. If you have thoughts, please let me know. Next Friday is Christmas Eve, so I will not be publishing a piece. But before then, I’ll see you on Tuesday. Have a great weekend!