Paywalls and subscription content may date back to the 1990s, but it’s fair to say that paid-for digital content has something of a chequered history. While publishers have explored subscription-based models, e-commerce and paid-for information services for many years, progress in the development of these revenues has been slow. It is clear that publishers need to reset their digital payment services if they wish to engage audiences and generate significant revenue from digital initiatives.
Against this backdrop, our recent research report, Digital Payments and Diversification: Where Next for European Publishers?, published with MTM, a strategy and research consultancy, provides an industry perspective on the current state and potential evolution of the paid-for digital content market in Europe. Our study, which focused across four markets – the UK, Germany, the Netherlands and Sweden – set out to reveal what the industry has learned from its experiences to date, how publishers can diversify digital payments to maximize opportunities, and what it takes to succeed with paid-for digital services. Indeed, publishing industry executives feel a new optimism around the potential success of new digital strategies.
In this, the first in a series of blogs examining its findings, we consider why publishers’ digital priorities need to be re-examined. Subsequent blogs will examine new digital monetization models, the barriers and challenges publishers face when pursuing paid-for digital content options, and the way ahead for the industry.
62% of publishers: “Developing digital paid-for services is a top priority”
The abundance of free news and information available online has hit the profitability of publishers and brings into sharp focus the importance of launching initiatives that will generate new revenues. Most publishers today already recognize the need for new strategies and that these strategies must do more than just making print content available online. They must reinvent their companies as multichannel, multimedia businesses. 62 percent of surveyed publishers see the development of new paid-for services as a top strategic priority.
Adapting to the rise of digital, mobile and social
Consumption of digital content has moved from print to online to social and mobile, driven by smart phones, tablets, app stores and social media. Some strong brands in some markets have made the transition and are seeing success in subscriptions and other services in new media. However, others have struggled to gain traction. Many publishers have therefore focused on digital advertising. While this continues to be an important revenue stream, it can be, in the words of one UK newspaper publisher, “hard work.” Reasons include the shift to mobile, the rise of ad blocking and strong competition from huge brands like Facebook and Google that account for approximately 50% of all global and 60% of all US online ad spending.
Which digital paid-for services to adopt?
Publishers recognize that they don’t have all the answers yet. They need to invest and experiment with new digital alternatives. Publishers can adopt:
- Paid-for digital content strategies such as various types of paywall solutions, but also micropayment models, and partnering with media content aggregators
- Digital diversification strategies such as membership clubs, events, ecommerce, information services, gaming and more.
The question that this blog series addresses is which strategies should different types of publishers adopt?
The next blog in this series will detail what publishers have done and need to do to prepare themselves for the change. You can find out all about it by reading our research report Digital Payments and Diversification: Where Next for European Publishers? or watch as I present the interim results at the FIPP Digital Innovator’s Summit in Berlin.