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July 14, 2021updated 20 Apr 2023 9:28am

Subscriptions, Substack and Sisyphus… most publishers will miss out on digital subscriptions revenue

By Dominic Young

Founder of micropayments platform Axate Dominic Young argues that chasing digital subscriptions could be futile for many publishers

You know the story, of course. Poor old Sisyphus, doomed for eternity to push a great boulder up a hill, only for it to roll back down as he reached the top.

For Sisyphus read 99% of news publishers – and the effort (equally futile) is to build a sustainable business on subscriptions.

Press Gazette’s 100k club research made this abundantly clear.

Only twenty-eight English language news sites in the world have managed to get over 100,000 subscribers. Twenty-one of them are in the USA. Three of them account for more than half the total number of subscribers.

In other words, nearly everyone launching a subscription model now will be at the other end of that very long tail. The numbers have always been disheartening. Even successful subscription products only convert a small single-digit percentage of their audience to subscription. If the audience is 100m people that’s a pretty good business – but it’s a lot harder if you’re smaller.

The recent rush to subscription has highlighted something else, though. Once a user is subscribing to one thing, it’s a lot harder to get them to add another subscription as well. As subscriptions grow overall, the available market gets smaller and smaller for anyone entering the fray.

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The same goes even for the big players. After the early rush of sign-ups, all subscription products hit a plateau. Persuading new people to join requires steeper and longer-lasting discounts, other expensive inducements. There comes a point when the real lifetime value of a new subscriber is dangerously close to nothing at all. Pushing that boulder for no result seems increasingly irrational.

The rise of Substack highlights a similar trend. Although there are a significant number of stand-out successes on that platform, the long tail makes for much more meagre pickings for writers further down the, er, stack.

The truth is, and people who know me will have heard this before, that subscription is a poor model for news media. It locks most people out, readers don’t like it and it can’t generate large enough revenues to sustain any but an exceptional few news organisations.

The media needs to completely re-think its model and it needs to establish a new way of working which opens up both revenues and the market overall. It needs to take advantage of the extraordinarily broad network of readers it has collectively, and turn it into a marketplace.

Interestingly, the rise of Substack has added new urgency and momentum. Publishers are thinking about how to create their own newsletter/microsite business. Their motivation is partly talent-retention, opening a new source of income for talent which might otherwise be tempted away by the open chequebook of new and well-funded platforms like Substack.

It’s also motivated by the need for innovation, opening a completely new revenue line to supplement and expand their existing but slowing subscription income.

[Read more: Substack: The newsletter platform that’s convinced Glenn Greenwald and other high-profile journalists to fly solo]

Existing publishers can create a formidably better offer both for their readers and their contributors. Keeping the concept of reader payment, but ditching the barrier of monthly subscription, and adding newsletters which offer content from across their main product and their new contributor microsites, they can drive significantly greater take-up and revenue, much more quickly. Having a single, sector-wide, payment mechanic takes away the friction and repeated sign-ups for users. Having empowered, motivated and invested contributors will drive new energy as well as revenue.

While nearly everyone knows the punishment Sisyphus endured, very few people remember why.  He was sentenced to a lifetime’s toil for cheating death not once but twice – the third time Zeus lost his rag. The publishing industry has only barely survived its delusion that advertising would provide a sustainable business model. Subscriptions are equally chimerical. Will Zeus be any more forgiving if the industry wilfully ignores the massive network that is its chance to thrive?

Image Kaspars Grinvalds/Shutterstock

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