The pandemic accelerated the decline in print newspaper circulation and news consumption across digital platforms. The online news landscape comprises recently established digitally native news platforms and long-standing traditional media giants transitioning from print to digital mediums. There are several reasons for this shift in news consumption, such as convenience, the need for real-time updates, and the availability of diverse content formats.
The future of digital news is subscriptions
The two significant revenue streams for Digital News and Publications are Advertising and Subscription. While nine in ten US adults say they get at least some news online (via smartphones, tablets, or computers), digital news publications still find it hard to monetize the news content among the readers. Only 21% of them pay for online news, and about 13% have more than one digital news subscription.
Hence, digital news publications and magazines still rely heavily on advertising. However, that situation is about to change drastically due to the rise of AVOD (Ad-supported Video on Demand). With over 50% of the US population projected to engage with content through at least one ad-supported streaming platform, digital news publications, and magazines are likely to experience a notable decline in revenue derived from advertising. It has become increasingly important for digital news publications to focus more on converting readers to subscribers and monetizing the news content effectively.
Our view of digital news publications and magazines
We have plotted the top digital news publications and magazines across the following dimensions to understand where they stand in terms of competition:
Market Performance Index: Based on the current market performance of the digital news publications that includes parameters such as revenue and digital subscriber count.
User Engagement Index: Based on user engagement in the digital news platforms, including monthly visits, average session duration, and number of pages viewed per session.
What do customers look for in digital news subscriptions?
An average US household now has access to enough subscription services, including streaming, retail services, food services, health and wellness, etc. Hence, it is crucial for digital news publications to understand customer needs to monetize news content and safely navigate subscription fatigue.
- Distinctive Journalism: While there is an abundance of free news available, news subscribers look for a combination of distinctive, accurate, high-quality, and curated content.
- Value for money: Subscribers look for exclusive features/benefits at a great deal that provide them with a seamless and user-friendly experience when accessing digital news content.
- Convenience: Subscribers look for a convenient package of news and information, flexible modes of payments, and access to family logins (like Netflix and Spotify).
- Exclusive Content: Subscribers look for exclusive articles from preferred journalists
In addition to this, there is also a desire to support good quality journalism amongst subscribers.
Challenges faced by digital news publications and magazines in monetizing the news content
Here are some challenges faced by digital news publications and magazines in monetizing the news content and converting customers to subscribers.
- Abundance of free news available online: Nearly half of US adults consume news via social media platforms (30% of them say they consume news via Facebook, and 26% of them say they consume news via YouTube)
- Declining attention span: Average minutes per visit on digital news platforms declined 5% in 2023 to 1 minute 45 seconds from 1 minute 50 seconds in 2021. The news platforms, while taking a hit on website traffic, are struggling to keep the customers engaged on the platform
- Finding the right pricing model: Digital news platforms are grappling with the challenge of defining the optimal paywall strategy and pricing model tailored to diverse customer segments
- Staying appealing to the younger generation: Digital news companies struggle to engage younger generations due to changing consumption habits, competition from social media, trust issues, and monetization challenges. To appeal to younger audiences, they must innovate content formats, leverage social platforms, build trust, and offer flexible subscription options.
Opportunities for digital news publications and magazines to attract, engage, and retain subscribers
By embracing GenAI to understand audience preferences and behaviors, digital news publications can overcome the mentioned challenges, leading to increased attraction, engagement, and retention of subscribers on their platforms.
Understanding the readers and segmenting them effectively into distinct groups (based on demographic, behavioral, and psychographic parameters) can result in the following benefits.
- Determining the right paywall for different segments
- Identify the right pricing point for each segment, thereby improving the acquisition rates
- Map each identified segment with the right set of news articles (curated content) and provide personalized newsletters, thereby improving engagement.
Our extensive experience understanding digital customers, and our expertise in machine learning and GenAI, can help digital news publications succeed with subscriptions and stay ahead of their competition. To learn more about the solutions and value propositions we offer, reach out to consultingservices@latentview.com.
