Digital subscriptions: The good, the bad and the ugly


In 2018, several media companies including Times Internet, The Hindu, HT Mint and TV18 introduced subscription plans for their digital products. Following the success of publications like The Ken and The Information, more publications are shifting their focus towards growing digital subscription.

The subscription-based business model is based on the idea of receiving recurring revenue (monthly or annually) for providing exclusive and prolonged access to a product or service. Publications hope to reinvent their business models by adopting a subscription-based revenue model.

Subscription-based business model rising in popularity
Subscription-based business model rising in popularityChart Source: Statista

The Good

One of the biggest reasons why subscription models are attractive to publishers, is the promise of guaranteed revenue. With subscriptions, your business is protected from market uncertainties. Once your publication gains a substantial number of subscribers, you can predict revenue for months in advance. After achieving financial stability, publications can focus resources and time on expanding and delivering quality content to their readers.

Usually, when publishers first implement a paywall, a dip in traffic is seen. This trend of readers bouncing after hitting a paywall can be discouraging. According to Hitwise, in the 12 days after the paywall was erected, total page views for fell between 11% and 30% per day.

This is a long term strategy. In the short term perspective, going to something new in this transition time, there may be a slight dip in traffic. But from the perspective of the way we've constructed the bundles and will remain part of the digital ecosystem, we believe we have protected our traffic and consequently protected our advertising inventory and advertising revenue.

Janet Robinson, President, Times Co. (2011)

Publishers need to remember that the ones who end up subscribing, are their most engaged and loyal audience. They are the ones with whom the publishers should focus on building a relationship. The long-term nature of subscription plans aids publishers in this matter.

Whether it is about what they like in your publication or about what they would want to see change, readers’ involvement and feedback help you improve.

The strong bonds of trust you build with your audience also makes it easier for you to market new services and products. If the consumer feels that the content they currently pay for adds value to their life, they will invest in upgrades and other new offerings from your brand.

Word-of-mouth is also an important way to increase your reach in this social media driven age. 60% of customers will tell friends and family about a brand they’re loyal to.

“The sharers act as unofficial ambassadors for the brand, and the sharers’ credibility can influence readers’ opinions about the reporting source.”

Media Insights Project

A dedicated subscriber base could help sell people on the value of the brand. It is easier to convince advertisers that they are gaining an engaged audience when that audience is paying for access.

The Bad

Churn or cancellation, is one of the biggest risks of subscription-based business models. While it assures a steady stream of revenue, the subscribers may cancel their subscriptions when they decide it’s not worth their money.

To avoid churn, publications will need to constantly create fresh, quality content, remain up-to-date with latest technology and offer great customer experience. This requires a huge amount of resources in terms of human labor and money.

Despite their best efforts, subscription models will have to compete with free alternatives. People have gotten used to accessing news for free and are now reluctant to pay for it.

In a worldwide research conducted on news consumption habits, it was observed that growth in the number of people paying for news is restricted to the Nordic region (Norway 34%, Sweden 27%). Everywhere else, the number of people paying for news is negligible.

Even in countries with higher number of people paying for news, the vast majority only have one online subscription. While major media houses have been dominating the market, regional newspapers are struggling to introduce subscriptions.

Subscription fatigue in consumers is also another barrier to the effective implementation of subscription-based business models. With the market teeming with subscription-based services (music, video, gaming, dating) majority of the population prefers to spend their limited budget on entertainment (Netflix/Spotify) rather than news.

The Ugly

Since, audiences do not want to blow their whole budget on just one publication, bundling and aggregation are gaining popularity. The Times of London offers free access to the Wall Street Journal while the Washington Post bundles cheaper access via Amazon Prime. Aggregators like Apple’s News+ are offering a single priced subscription for multiple premium titles.

But some publications are hesitant about such a partnership. They believe that bundles dilute the brand and takes away the opportunity for publishers to bond with their audience. Aggregators take a major chunk of the subscription fees for themselves which further harm the publications.

Apple is reported to be taking 50% of the subscription fees for itself and distributing the remainder to publications fractionally, based on the attention their individual articles receive.

“We’re going back to a scale play where publishers will chase eyeballs and traffic to be No. 1,” one publisher source said. “We’re welcoming an era of metrics that are a bit murky. It’s awful for publishers. It’s a different type of a race to the bottom.”

Major publications on Apple News+
Major publications on Apple News+Apple


Publications worldwide agree that subscription-based models are crucial to the future of independent journalism. While a handful of sites have cracked the subscription model, others are still working towards perfecting their revenue models.

But as was the case with legacy media, offering engaging content and winning audience trust is the only way publishers can hope to monetize.

To create and manage subscriptions with ease, we have built AccessType, a paywall and subscription management platform for digital publishers.

Related Stories

No stories found.