Are fewer people paying for publishers’ subscription products?
As many consumers dial back their spending in the face of economic uncertainty, there’s mounting evidence to suggest the number of individuals in the U.S. paying to access digital publications could be contracting.
That’s bad news for publishers, many of which have found it more difficult to attract and retain subscribers in recent months.
Recent research we conducted in partnership with National Research Group found that 19% of U.S. consumers are currently subscribed to at least one digital publication. Among that group, 29% said they plan to cancel subscriptions by the end of the year, while a smaller portion (27%) expect their subscription tally to increase.
The research also found that the more subscriptions people hold, the more they want: Among respondents who hold five or more subscriptions, 44% said they plan to add more by year’s end. By contrast, 30% of respondents with two to five subscriptions said they plan to add more, dipping to just 14% for those who currently subscribe to a single publication.
Taken together, these data points suggest that although the total number of subscriptions held among U.S. consumers may be increasing, those subscriptions are becoming increasingly concentrated among a small pocket of “power subscribers” who continue to grow their subscription portfolios while other consumers slim down or cut out subscriptions entirely.
The prospect of fewer total consumers paying for publication subscriptions is a concerning one for publishers, even if strong demand from power subscribers remains. It implies publishers across the board may be increasingly reliant on a relatively small total audience for their subscription revenues, which could leave their businesses exposed if this group begins to make deep cuts to their subscription portfolios or simply fails to add new subscriptions quickly enough to offset cancelations.
It also suggests that publishers at large are “preaching to the converted” in terms of the audiences they’re marketing subscriptions to. Power subscribers may have proved relatively easy to convert to date, but it’s safe to assume this group could be approaching saturation point in terms of the number of digital subscriptions they’ll maintain on a long-term basis. Attracting, educating and converting first-time subscribers will therefore become essential for further growing the overall market for publication subscriptions.
Finally, if fewer consumers are paying to access publications it may lend credence to the argument that – as more digital content is placed behind paywalls – some groups of consumers are more simply more likely or able to pay to access it than others, for socioeconomic reasons or otherwise.
With an increasingly rocky economic outlook, publishers will be keeping close tabs on their retention performance throughout the remainder of the year, and bracing for the worst in the first quarter of 2023.
Some publishers will fare better than others if the overall universe of subscribers is indeed shrinking, depending on the nature and value of their content, products, and most importantly their audiences and subscriber bases. But regardless, fewer consumers paying for subscriptions is less than ideal for any publisher looking to grow its subscriber base and revenues.
