THE SUBSCRIPTION BUSINESS MODEL

“Reader revenue is providing stable and growing income while advertising has remained volatile, with many reporting worse than expected results in 2019.”

— The Reuters Institute

Not only is subscription revenue growing, it is also morphing beyond its original form to include greatly expanded niche vertical subscriptions, profitable enterprise B2B sales, conversions to high-end product subscriptions, and, most importantly, whole departments dedicated to retention. This transformation of reader revenue has prompted what media industry magazine Folio called “a deep rethink around what a magazine is or can be”.

“I do think there is an unbundling of the magazine subscription,” Esquire Editor-in-chief Michael Sebastian told Folio. “Just as iTunes detached tracks from albums, we may be seeing the general access model for paid content splinter into passion points that micro-subscriptions serve with product mixes that go far beyond text and images.”

We are also seeing the creation of entire departments dedicated to subscriber retention.

Tellingly, back in late 2016, The Washington Post had no one dedicated to retention. Today, there are 25 people working on retention. Similarly, The New York Times tripled its retention-focused staff between 2015 and 2017.

“You don’t get money from conversion, it’s from retention,” Kjersti Thorneus, Director of Product Management at Schibsted Media Group, told WhatsNewInPublishing.