A WARC Trend Snapshot, Media in the subscription economy, notes the willingness of consumers to pay for digital content services – as exemplified in the growth of OTT services like Netflix and music-streaming services like Spotify.
Deloitte has also predicted that by 2020 half of US adults will have four online-only subscriptions, up from two today.
Traditional publishers around the world are tapping into this trend – earlier efforts at monetising online audiences via digital display advertising having proven insufficient to support their journalism.
Many are experimenting instead with paywalls for selected content and membership packages; for example, 60% of Swedish publishers have paywalls in place.
While it’s not new phenomenon, the last few years have seen a spike in companies opting for this revenue stream, according to David Mulrenan, head of investment at Zenith.
“They have looked at business models such as Sky, where 80% to 90% of revenues come direct from the consumer in terms of subscriptions. This allows for a direct relationship, which means they build an engaged and lasting relationship with that consumer,” he said.
Such publishers will continue to see advertising as an important revenue source, but subscriptions offer a stable base from which to produce “unique and carefully procured” content, Mulrenan added.
At the same time, the subscription model is likely to require both brands and agencies to consider new approaches, such as offering vouchers and exclusive deals through publisher rewards programme.
One such campaign enabled subscribers to UK newspaper The Times to claim a free gin and tonic at bistro chain Café Rouge via its The Times+ scheme. “This isn’t traditional advertising, but it is advertising [nonetheless],” said Mulrenan.
Another possible consequence is that brands’ relationships with media owners could shift from a campaign focus to longer-term brand building as they seek to reach engaged audiences.
And all the time, the debate will continue to rage over whether large-scale, premium content publishing is possible without the support of ad revenues.
Sourced from WARC