The International News Media Association (INMA) invited me to speak about the future of subscription revenue at the 2021 World Congress of News Media.
My talk focused on how the ongoing subscription boom in news won’t lead to a sustainable news ecosystem unless we start thinking more holistically about the future.
Subscriptions can be great for news: They incentivize newsrooms to create value in communities they serve. Subscription revenue is more predictable than ad revenue.
But talk of subscriptions at news organizations is coming in the midst of a major shift in the economy — away from ownership.
Companies that used to sell “things” are now selling service contracts.
One example: Your car isn’t just a metal box with wheels — it’s a software platform. All the major auto manufacturers are pursuing a strategy of selling recurring updates to their vehicles.
This trend isn’t new, but it accelerated during COVID.
Barclaycard estimates that spending on digital subscriptions in the UK was up 40% during lockdown — and that half of all retailers in the UK now have a subscription program.
The data looks similar elsewhere in the world.
So why does this matter to the future of news?
Because all these new subscriptions are going to change what consumers expect from us. News subscriptions are going to be compared to products that have nothing to do with media.
We’re a tiny part of the overall subscription economy — More people subscribe to “Snack and Treat” boxes in the UK than news.
News organizations also need to worry about the shift to a subscription economy because consumers only have so much to spend every month.
The median local news subscription in the U.S. costs roughly 20% of the total subscription budget for the average American.
It’s great to focus on improving conversion rates and boosting engagement, but we need to talk more about the forces outside our control.
That means asking questions like:
- Will consumers be willing to pay less for news if Netflix or Spotify raise their prices?
- What needs to change about your subscription in a world with less ownership?
- What other subscriptions do your subscribers have — and how do those shape their expectations?
And we haven’t even talked about changing technology: The emergence of synthetic media and adoption of “heads-up” wearable devices means user behavior is about to change.
Now is the time to start asking: What does an always-on, contextually-relevant news subscription look like?
Yes, news is essential. But being essential doesn’t guarantee our future.
By asking strategic questions now, we can act incrementally: What partnerships do we need to form now? What kind of talent development or hiring do we need? Where are there opportunities for us to grow?
This kind of thinking needs to permeate all levels of the organization.
It’s essential for effective product management, but it also needs to be part of executive-level strategic plans and operating models.
If we don’t build a future that supports a thriving news ecosystem, we’ll find ourselves in a world built by someone else — with different priorities.
News is too important to just assume we’ll be ok.