Digital subscriptions appear to be the fastest-growing source of revenue for online publishers, a survey has indicated.
But in their quarterly Digital Publishers’ Revenue Index for the first quarter of 2023, the Association of Online Publishers (AOP) and Deloitte warned that publishers “cannot be complacent” about their subscription growth amid the cost of living crisis.
The survey of nine consumer publications and four B2B publishers found the group’s total digital revenue grew 0.1% year-on-year from the first quarter of 2022, to £151.8m.
Digital subscription revenues were the fastest-growing single income stream for the second quarter in a row, rising 18.3% year-on-year from the first quarter of 2022.
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Dan Ison, the lead partner for telecommunications, media and entertainment at Deloitte, said that while subscription growth remains steady, “publishers cannot be complacent. Consumers continue to adapt their shopping behaviours to maintain overall living standards as a result of high inflation.”
Having each remained static in Q4 2022, revenues from display ads at the group of publishers declined by 11.7% in the first quarter of 2023 while those from video fell 10%.
Revenues from desktop computers fell 11.5% year-on-year - alongside revenues from mobiles, which fell 17.5%, contradicting a general trend in recent years.
The platform which saw the biggest relative gain was digital audio, which grew from £600,000 to £2.3m.
An “off-platform” category, which includes Facebook instant articles and Apple News, generated £4m for the publishers, but the authors said that because the segment is a new feature of the survey “figures are not yet steady enough to reveal trends”.
Multi-platform revenue drawn from campaigns that run across more than one format grew 7.2% year-on-year, which the authors said brought the category’s total revenue to £109.6m.
Some 75% of survey respondents said they had “strong confidence in advertising revenue growth”, up from 50% in the first quarter of 2022. Confidence in “non-advertising revenues” including subscriptions was higher, rising from 66% in Q1 2022 to 100% in Q1 2023.
However, the proportion of respondents who said they were “prioritising cost reduction in the next 12 months” also rose, from 50% to 75%.
Richard Reeves, managing director at AOP, said: “The growth of the multi-platform category shows that publishers are pursuing more complex and ambitious revenue streams and moving away from risky eggs-in-one-basket approaches. This talks to the fact publishers are having more big brand conversations and more direct dialogue with advertisers and agencies."
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