How subscriptions are lighting way to brighter future for local US news publishers.
[featured in PressGazette News]
By Aisha Majid
September 29, 2022, |
Digital subscriptions are providing some glimmers of light for under -pressure local news publishers in the US.
A Northwestern University report earlier this year found that 2,500 local newspapers have closed since 2004, creating hundreds of “news deserts”.
Subscription specialists Mather Economics forecast that the volume of digital subscribers to US titles will surpass print subscribers in 2023.
“If you think of the share of the subscriber base, they’re going to cross over next year,” says Peter Doucette, a senior managing director at Mather, adding that it is mostly local publishers included in this calculation.
“Digital subscriptions are clearly the biggest growth driver.”
Across the US, digital subscriptions are set to soon take over print
Print and digital only proportion of subscribers
Although the number of digital subscribers is for some publishers a closely guarded commercial secret, research by Press Gazette has uncovered a number of independent, local titles with sizable digital subscriber counts.
While the Los Angeles Times and Boston Globe unsurprisingly top the list with over 500,000 and 244,000 digital subscribers respectively, lesser-known names (globally at least) are also doing well.
The Minneapolis Star Tribune told Press Gazette it currently counts over 100,000 digital subscribers, while Long Island local Newsday has already surpassed 50,000 digital subscriptions despite only offering them in earnest since 2019.
The Seattle Times, which is independently owned by publisher Frank Blethen, meanwhile has doubled its subscriber count in three years crossing 81,000 earlier this year.
If you want to add your publisher’s digital subscriptions data to this table or think it can be improved in any way, please email email@example.com
How many digital subscribers do independent, local newsbrands have?
Circulation data and number of digital subscribers, selected independent local titles
Print: AAM. Digital subscribers: publisher communications with Press Gazette. *Print figure for Advocate – Times-Picayune, The New Orleans Advocate
Large chains, which tend not to share figures for individual titles, meanwhile have reported digital subscriber growth for the overall company.
Gannett, publisher of USA Today as well as some 100 local titles, told Press Gazette in an email that its paid digital-only subscribers grew 44% in Q1 2022 over the prior quarter to 1.75 million. Lee, the country’s fifth large publisher, had 450,000 digital subscribers by the end of 2021.
But while subscriber counts are encouraging, revenue still lags, says Doucette. He says that the revenue split between print and digital subscriptions remains in the region of 85% to 15%, in favour of print.
“There’s a big and growing revenue stream, but clearly not big enough to be sustainable for a news organisation on its own at this point,” he says.
Print still accounts for the bulk of subscription revenue
Print and digital subscription revenue
While the biggest successes are unsurprisingly titles in larger metropolitan areas such as Boston, Seattle and Los Angeles, where publishers can tap into a larger pool of potential paying subscribers, even publishers in smaller metros are making significant strides, says Doucette.
Earlier this year Press Gazette reported on a number of successful local news startups. Among them was the Shawnee Mission Post, a subscriber-funded news site in Johnson County, Kansas, which is on track to make $650,000-$700,000 in revenue this year. Around two-thirds of that income will come from its 6,000 digital subscribers.
What are the keys to building a successful reader-supported business in local news?
It might be a truism, but while getting right the mechanics such as SEO and page speeds is important, the content, says Doucette, is critical.
“The most important thing is to have quality news and then you have to have some level of what I would call exclusivity, where you are the only one covering an issue, an event or a sports team for example. There is no magic formula.”
Matt Broad, VP of strategic services at revenue analytics company Piano.io, says that even though the overall audience might be smaller in local news, the smaller number of providers is an advantage.
“If [a customer] hits a wall on a national site, they can go somewhere else and maybe have [a] few articles there to read and so forth. But for local news, if there’s only one or two outlets that they can get that information from that’s what these outlets need to be promoting and pushing. We’re finding that more regional publishers are providing more local relevant content to to build that relationship with their users and push it that way.”
Broad says that Piano.io, whose many local customers include the Baltimore Banner, The Colorado Sun and The Salt Lake Tribune, is signing up increasing numbers of local publishers keen to understand how technology can help them better understand their audiences and user journeys.
Having good content is also where independent businesses, while lacking centralised resources, have an advantage according to Doucette.
“They typically have better content, which is probably the most important thing. The trade-off though is some tend to have less sophistication in terms of their technology and their marketing capabilities. But the independent metro publishers at least are much better off in terms of their strategic opportunities because they are playing the long game, building the capabilities and investing in the newsroom.”
While there’s more than one way to success in local digital subscriptions, setting out your strategy and defining what your business will look like down the road is, as one of the sector’s more successful names the Boston Globe has done, Doucette’s key piece of advice.
“The Boston Globe is by far out in front because they’ve invested in the newsroom for a long time and they’ve been committed to digital subscriptions,” says Doucette who previously spent over a decade at The Globe. “They built up their capabilities and their technology and picked a strategy and a path very early on and were very committed to it.”
For the past decade, the title’s publisher Boston Globe Media has run two websites – Boston.com, a free site that is ad-supported, and a premium, subscriber-only site BostonGlobe.com that supports its core mission of growing reader revenue.
“What [the two sites] allowed them to do is really focus on growing digital subscriptions and not get caught in the trap that many publishers do, of ‘we want to grow subscriptions, but we’re worried about page views and ad revenue’…They picked the path early on and they didn’t get sidetracked with a lot of what I’ll call the noise that a lot of publishers do.
“It all starts with what you’re solving for and what is your vision. I see a lot of publishers skip that step and they go into execution.”
This focus, says Doucette, has allowed the Globe to raise enough digital subscription revenue to fund their newsroom twice over, which he says is a “kind rule of thumb” for a sustainable business. Additional advertising revenue drives margins on top for the Globe.
Although it is some years behind the Globe in its transformation, the Philadelphia Inquirer, from where Doucette joined Mather this summer, is he says largely “in the same boat”.
Non-profit-owned, The Inquirer is currently at 70,000 digital subscribers, which a company spokesperson told Press Gazette is “tracking ahead of [its] goal for the year”.
“Without the two websites, in a lot of ways, those same principles apply as the Globe,” says Doucette.
Both the Inquirer and Globe, however, hardly serve what could be thought of as news deserts or impoverished communities. As Mission Post’s co-founder Jay Senter told Press Gazette, part of the publisher’s success can be accounted for by the fact that the local community it serves is one of the country’s more affluent areas. Many publishers need to charge enough to run a sustainable reader-supported business. Deep discounting can raise subscriber numbers, but of course it’s ultimately the revenue that counts.
Retaining subscribers, many of whom flocked to local (and national) news sites during the pandemic, has also been challenging for some publishers.
Joana Santiago Vazquez, director of audience growth and digital strategy at GFR Media which owns Puerto Rico’s Nuevo Dia, told Press Gazette that retention at the title which currently counts 22,000 subscribers has been difficult. As a result, Nuevo Dia, she says, is looking at new technologies as well as partnerships with local businesses such as insurance companies who can bundle digital subscriptions to the title into their customer offers.
Doucette remains bullish however that there is a sustainable business model to be found in local news. Maintaining the newsroom and the sales locally while outsourcing parts of the business such as technology, finance, and human resources elsewhere could be one way forward, he posits.
“A local publisher can build a sustainable business if you go all the way to the end state of a digital-only business,” he says.
“Local publishers need to be as aggressive in digital as they can. Digital growth, they need to prioritise that investment. I like to say, put print on autopilot, which means put as few resources there as possible. All the mindshare, thinking, energy is around digital growth.
“You have to maintain print because you need the cash to fund the transformation, but they have just got to be more aggressive and most are not aggressive enough. Most will just dip their toe in, they’ll try a little bit, they’ll buy a tool and they’ll say it doesn’t work, but it’s because I would argue they’re not fully committed to growth.”