Reuters Goes Direct To Consumer in Diversification Bid

It’s still early days, but Reuters, known for being a news agency providing content to other media companies, has gone direct to consumer.

To be fair, the news wire has had a consumer offering since the mid-1990s, largely driven by advertising revenue. In 2021, the company put up a registration wall, and in October 2024, it launched the consumer subscription service. Subscriber numbers have not been provided, but the website gets about 45 million to 50 million unique visitors a month, according to Phil Andraos, general manager of Reuters Digital.

“We were mostly advertising driven for a long time and decided finally to launch a paywall and subscriptions to drive revenue from our readers and diversify revenue streams,” Andraos told AMO. “So we’re not just relying on advertising, which has done well for us, but also starting to drive subscription revenue.”

Andraos made a point to explain that the move was not made because Reuters is in crisis—the company’s stock price is up some 11% over the past 12 months.

“You can look at earnings reports, we’re doing well, we have a healthy business, but we want to reinvent ourselves and continue to evolve and plan for the future, to build a solid foundation now, not because we’re desperate, but because we feel like that’s the right next move for us,” Andraos said.

In the fourth quarter, the whole company’s revenue totaled $1.9 billion, up 5% from a year earlier. The company’s “Big 3” segments (legal professionals, corporates and tax & accounting professionals) rose 7% in that time to $1.55 billion, while Reuters News dropped 1% to $218 million. EBITDA for Reuters News was down 26% to $45 million “due to lower transaction revenue and higher costs including editorial coverage of key global events in the quarter.”

Publishers are struggling for a number of reasons, including a drop in traffic driven by Google’s algorithmic changes as well as pressure on advertising businesses. Many in the industry are turning to subscriptions to build new revenue streams, as well as holding events, building communities and sophisticating their marketing capabilities.

Affordably Priced

Reuters did a progressive launch with a standard subscription paywall, rolling out initially in Canada, then the UK, U.S, Europe and so on. This launch was three years later than expected after a dispute between Reuters and financial data provider LSEG “over whether the paywall would breach their news supply agreement.”

“We set what I would call realistic expectations of how fast we would acquire subscribers,” Andraos said. “Happy to say we’re doing better than that. So we’re very happy where we’re at. Things have gone better than we initially thought they would.”

Reuters wouldn’t provide further details on the number of subscribers.

The agency had originally planned on charging $34.99 a month. Instead, it decided to opt for simple and affordable pricing at $1 a week, with a small discount for an annual subscription.

“We went with a price that will hopefully give us a lot of volume,” Andraos said. “Rather than trying to reach a very small number of subscribers that maybe pay a high price point, or trying to reach a really broad audience of subscribers, really, it’s a volume play.”

According to the Reuters Digital News Report 2024, only 17% of internet users in the U.S. pay for news. That leaves 83% who don’t pay, and Reuters is hoping that an accessible price point will make it a no-brainer.

“There’s also really big demand for fact-based journalism,” Andraos said, particularly with the growth of generative AI. “That’s a really unique proposition that we think long term is going to be even more valuable as content production becomes cheaper there’s just going to be a flood of content.”

Globally Minded

The Reuters “value proposition is the unique intersection between global breaking news and in business and markets,” Andraos said.

The unique proposition of our consumer offering is that we can make those links to business and markets. How does an earthquake in Chile impact the prices for raw materials that are found in iPhones and solar panels? How does the drought in Brazil impact the price people will pay when they go to Starbucks this year? We’re not trying to get people to stop reading other outlets. A lot of our readers read multiple news outlets, and we’re trying to be part of that mix for them.

The target audience for the subscription offering is “globally minded knowledge workers” who work in industries where knowledge is power.

Reuters is just getting started with marketing. It is first going after occasional readers and getting them to think about the website as a main source of their news.

“We’re going to start to build out more top of funnel brand awareness as well, to get new readers and who, maybe they know Reuters, but they don’t think of us as like a daily destination. We want to change that and get them to really think about us and come to us proactively,” Andraos said.

Google continues to be a major source of traffic for Reuters, even as other publishers have seen their SEO efforts fail to pay off following Google’s algorithm changes of the past couple of years.

On the other hand, social media has been more of a challenge in attracting readers. While Reuters remains active on different sites and still sees “good” traffic from them, it’s not nearly what it was five years ago, Andraos said. The company’s priority initially is to convert fly-by readers into loyal ones.

“Our target audience is probably somebody who already pays for news,” Andraos said. “The minute we get them on our platform, we try to offer them something like a newsletter, something that they can subscribe to build that engagement or show them content that they feel like, oh, I want to come back and read more of this, they build the habit and get them to then start engaging more proactively.”

They are also looking for tools and products to better engage subscribers, including a subscriber-only newsletter. There will be more over time.

“We think subscriptions is one of our biggest opportunities for growth,” Andraos said. “It’s definitely very strategic for us now. As a percentage, or how big it’s going to be, I can’t really talk about that, but we have big ambitions.”