Contrary to all fears, news organizations are still seeing an increase in subscriptions

This article was originally published on Northwestern University’s Medill Local News Initiative website and is republished here with permission.

Good news during the COVID-19 pandemic: More US consumers are reading and subscribing to local news publications.

But industry experts feared the rising tide could ebb in 2022 as people return to work and inflation begins to squeeze household budgets. In fact, there were signs that readership was declining. That was reported by the Poynter Institute for Media Studies in September Page views and unique visitors are down about 20 percent at local newspaper sites in 2022, a frightening metric at a time when costs are rising and traditional advertising revenues continue to fall.

However, data from the Medill Subscriber Engagement Index shows that even after the pandemic subsided, subscriptions continued to grow across all three categories of newspapers tracked: large, medium and small.

“The headline is that the bottom didn’t fall out,” says Ed Malthouse, Erastus Otis Haven Professor and research director of the Medill IMC Spiegel Research Center at Northwestern University’s Medill School. Malthouse is the data scientist overseeing the Medill Index, which launched in 2021 and now includes data from more than 100 news organizations across the country.

Of the eight surveyed major metropolitan dailies at the top tier of the Index, six reported an increase in subscriptions from September 2021 to August 2022. One saw only a small drop and another a significant drop. (Publishers have agreed to include their data in the index on condition that they are not named.) Medium-sized and smaller publishers also saw increases, although not as much. Meanwhile, reader regularity, the number of times readers go online to see news, remained stable at all three levels.

None of this surprises Matt Lindsay, President of Mathematics Economics, a consulting firm specializing in media and data analytics. “The number of users of digital messages has increased by 30 percent during the pandemic. That [subscriber] The conversion ratio increased by 50 percent, so the total number of starts increased by 80 percent,” he says. “We’re seeing that page views have gone down, but publishers are getting better at converting subscribers so they’re maintaining their number of new subscriptions. There was a learning curve and now it’s all about retention and monetization, how to increase the average price people pay.”

Ken Herts, Chief Operating Officer of the Lenfest Institute for Journalisma nonprofit that owns a stake in the Philadelphia Inquirer is optimistic that news publishers will be able to retain their new subscribers and continue to grow them.

“Penetration of potential subscribers is still very low and there is a lot of room for growth,” says Herts. “A Reuters study found that about 20 percent of people are willing to pay for news, but they have subscriptions in the half to one percent range for many publications. With good marketing, publishers should be able to get up to 2 percent subscriptions, and then they will have a very good deal.”

The Inquirer is on track to reach 70,000 digital subscriptions in the near future, surpassing its 61,000 print subscribers. The same trend can be seen in the Boston Globe, the Los Angeles Times and the Minneapolis Star-Tribune. The Boston Globe has reached 240,000 digital subscriptions, about 70 percent of which are full price, about $28 a month. Last month, the parent company of the Dallas Morning News reported a 12.4 percent increase in digital subscribers and a nearly 40 percent increase in digital-only subscription revenue in the third quarter of 2022, despite traffic to the company’s website falling during the third quarter fell by more than 30 percent that year.

Savvy digital marketing is key to attracting new subscribers, which many newspapers weren’t doing particularly well before the pandemic, industry experts say. The parent company of the Dallas Morning News actually bought its own digital advertising company. One of the nation’s largest operators of local news outlets, Gannett has a growing and profitable digital marketing unit that helps local businesses like plumbers and dentists grow their digital presence.

Other publishers haven’t gone that far, but have hired digital marketing experts to bolster their subscription acquisition efforts. They also attend conferences and participate in “digital accelerators” to learn from other subscription companies like Dollar Shave Club, a California company that has been shipping razors and other personal care products through the mail since 2011. “You have to invest in digital marketing, but it’s not just marketing per se,” says Herts. “It’s about finding readers where they are and targeting them with differentiated content so they become regular readers, and then developing a newsletter strategy to keep people coming back.”

Tim Franklin, Senior Associate Dean and John M. Mutz Chair in Local News at Medill, sees the uptick in subscriptions as another sign that the industry is successfully transitioning to a new business model. “If publishers can keep the people who wanted health news about the pandemic, they’re people you can build a strong foundation with. This is hugely important for the industry as it continues to evolve from an ad revenue model to a reader revenue business model.”

Franklin and Malthouse warn that publishers are celebrating prematurely and expect subscriptions to continue to rise. Headwinds in the news business include continued declines in print circulation, falling ad prices, inflation-driven spending increases and concerns about subscription fatigue.

“People shouldn’t be on their guard. It’s dangerous to assume the line would continue like this,” says Malthouse. “The only reason for that would be if publishers are providing value to their readers. You need to provide differentiated and curated content as users are pressed for time. If I’m a subscriber and you fill the page with bulk content or beat me to death with ads, I’ll take your credit card away.”


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