Subscription insights from the 2023 Digital News Report
More U.S. consumers are paying for access to news, but building long-term subscriber relationships remains a challenge. Those are among the key findings from The Reuters Institute for the Study of Journalism’s 2023 Digital News Report, which was published on Wednesday.
Based on a YouGov survey of 93,000 people, the report aims to capture consumer sentiment toward news publishers and trends in news consumption across 46 individual global markets. Its high-level findings confirm that converting and retaining subscribers continues to prove difficult for many publishers as consumers control their spending carefully in an increasingly competitive market.
The good news is that although subscription revenue is not immune to broader economic conditions, it appears relatively stable compared with that from other streams such as advertising and commerce. And although consumers continue to shop around and try products from different publishers, their overall propensity to pay for news shows no signs of contracting, survey responses suggest.
This year’s report included a handful of key takeaways for subscription publishers:
More U.S. consumers are paying for news
Across 20 countries where the concept of paying for digital news products is well established, the average proportion of respondents doing so remained consistent at 17% for the second year in a row. In the U.S., however, the portion of respondents paying for news increased from 19% in 2022 to 21% in 2023, suggesting the market for news subscriptions in the U.S. continues to grow.
Those findings are in line with research conducted by Toolkits last year, which found that 19% of the U.S. population subscribed to at least one digital publication, and a significant portion of consumers expected to purchase new subscriptions in the year ahead.
Subscriber loyalty remains fragile
Despite publishers’ efforts to build long-term relationships with subscribers, the report suggests a large portion of U.S. consumers continue to hop between subscription products – a behavior that’s enabled by the widespread availability of cheap or free promotional offers.
Just 38% of respondents said they kept their subscriptions consistent during the prior year, while 25% took out new subscriptions and 25% canceled subscriptions. Given that U.S. respondents said they hold two subscriptions on average, the data imply a high level of turnover as subscribers bounce back and forth between different publishers’ products.
That behavior looks set to continue as news publishers compete more fiercely for consumers’ subscription dollars and readers continue to shop around. According to Toolkits research, 82% of major U.S. publishers currently offer free or discounted introductory subscription offers, and the average subscription price available to new subscribers in July was just $0.043 per day.
Quality content drives subscription
The most important reason to pay for a subscription was to access better quality or more distinctive journalism (51% globally, 65% in the U.S.), followed by the desire to support specific news brands and/or to help fund quality journalism. Finally, games and member benefits were important for some, along with an improved user experience.
When asked what would encourage them to pay for a news publication, 22% of non-subscribers said more valuable content, 32% said cheaper or more flexible pricing and terms, and 42% said nothing would convince them.
Publishers are increasingly emphasizing quality as they attempt to both attract and retain subscribers. New York Times publisher A.G. Sulzberger reiterated the fundamental importance of quality content when asked last month about the publisher’s subscription strategy. “The secret of it is deceptively simple: It’s not about paywall rules or meter heights, it’s about having stuff that’s worth paying for,” he said.
Utility and humanity are differentiators
As artificial intelligence threatens to disrupt many publishers’ business models, humanity and utility will become increasingly important for publishers looking to grow their subscription businesses in the years ahead.
“Most consumers are looking not for more news, but news that feels more relevant, and helps them make sense of the complex issues facing us all. New technological disruption from Artificial Intelligence (AI) is just around the corner, threatening to release a further wave of personalized, but potentially unreliable content. Against this background, it will be more important than ever for journalism to stand out in terms of its accuracy, its utility, and its humanity,” the report concluded.
That sentiment echoes recent statements made by executives from major global news brands, who believe AI could benefit publishers’ businesses in the long run by helping them establish stronger relationships with audiences. A recent Toolkits poll also found that 47% of subscription publishing professionals believe generative artificial intelligence will ultimately help publishers grow their subscription revenues, while 18% disagreed and 35% said they were unsure.
A large proportion of subscriptions go to a handful of big brands
As in previous years, the report found that a “winner takes most” dynamic persists in many markets. In Finland half of all ongoing online news subscribers (53%) pay for Helsingin Sanomat, for example, and in the U.S. The New York Times (36% of ongoing subscribers) has stretched its lead over the Washington Post and the Wall Street Journal and is building a significant subscription base in other English-speaking markets such as Canada and Ireland.
The report also found that in several countries, including the United States, many paying subscribers are taking out multiple subscriptions. According to Toolkits’ research, a relatively small but highly engaged group of “power subscribers” – about 4% of the population – accounts for an outsized portion of subscriptions held in the U.S. Forty-eight percent of subscribers said they hold between 2 and 5 subscriptions, while 21 percent reported having five or more, Toolkits found.
