Three main takes from this presentation:
- One of the main trends is that pandemics accelerated the transition to digital spaces for both consumers and advertisers.
- The moment has come – now or never – to adjust your media for the digital-only future.
- To succeed, one needs to define the main goal, invest in journalism, equip their team with the data, and learn quickly through experimentation.
In the midst of the pandemic, people are looking for quality journalism. Traffic analysis of different news websites shows that those who have a strong brand and a strong editorial team demonstrate the highest growth. This applies at all levels: from international brands like New York Times to local, like Boston Globe in the US and Kleine Zeitung in Austria.
What may be even more important – since the onset of pandemics, users are more likely to pay for online news. This graph shows the trend on a sample of almost 300 subscription news websites around the globe:
While readers were more actively looking for quality journalism and felt more like paying for it, advertisers turned into the opposite direction: most of them cut on the budgets. In the US, for example, the trend is expected to stay negative in the nearest future, even if the economy grows back relatively quickly. Which means that relying on advertising revenue –both in print and digital – is not a good strategy for the news media. More and more publishers realize they need to switch to the digital subscription model.
Global leaders in the news publishing have been ahead of the curve. By the second quarter of 2020, they boast subscriber bases of hundreds of thousands and sometimes even a few million digital subscribers. Even smaller, national and local publications provide successful examples. For instance, Gazeta Wyborcza in Poland currently has more than 240,000 of paying readers online. The difference between the leaders of the digital subscription race and the rest is in the timing: leaders have started their digital transformation many years ago and it is paying back now. New York Times, who launched digital subscription in 2011, reports that in the first six months of 2020, their paying readers brought four times more money than advertising.
How does the reality of digital transformation looking for those who are going through it right now? As more publishers test different digital subscription models and paywalls, more data becomes available on how the chances to convince readers to pay for news are looking for the industry. Bad news: currently, only mere few percent of the average news website readers are likely to turn into paying subscribers. There is good news too, though: most of those who once decided to pay for news are very much likely to keep their subscription after the first month.
This graph analyses data from 300 media outlets to show what percentage of occasional readers might end up being paying subscribers:
Switching to digital subscriptions: the price tag
How to plan for digital transformation of a media outlet? Many believe their main goal is to finance their journalism, and that is indeed the reason for existence for most media businesses. How much money is that? Start with counting the expenses needed to support the newsroom. It is important to remember about other needs too: technology, promotion, maybe some digital advertising sales. Practice shows that very often the final sum would arrive at around double the expenses to support the newsroom. One can use this number as “Pole star”: you need to be making this much money online in the next 3-5 years in order to lead your company into the “safe haven” in the digital world. For example, The New York Times defined its Polar star as having 800 million dollars in digital revenue by 2020 and 10 million digital subscribers by 2025.
“Polar star” goal can be financial: for example, to earn one million dollars by 2025. This goal can also be of an achievement type: “to become the most downloaded news app in the country by 2021”. One’s goal can focus on the readers and the media’s value for them: for example, “to reach 25,000 subscribers by 2023”. Lastly, the goal can be defined through the social value: “to become the most trusted news source in the country by 2025 according to opinion polls”.