Printed newspapers once dominated the subscription realm, but now! Their revenues are under heavy fire by online news and digital subscriptions. As the presses are making huge bets on digital subscriptions, what strategies have been acquired by the big guns of the past to stay in the race?
This month, the reading tax was abolished for digital content in the UK’s Budget. The announcement was quite low-key, and 20% VAT was removed from any online text content like journals, audiobooks, e-mags, ebooks, and online newspapers.
Print publications have been dodging the VAT since 1973 by tossing “tax on knowledge”; however, November of 2018 came with an announcement of a reduction in their respective taxes. Many countries in the EU opted to tone down the tax percentage to a single digit, but Britain has slashed away all the taxes – that means about 210 million pounds a year have been lifted off as VAT charges.
The timing of this waiver is such when online subscriptions are being considered by the newspapers to be the solution to the dropping print circulation. Their estimated worth has halved since 2010, and paywalls have been approached by many leading broadsheets to compensate for the loss. Still, publishers stay behind on taking up the idea, which declared the industry to be the least revenue from usage-based pricing.
Subscription for online newspapers goes way back. USA Today was the first entity to charge readers for the blossoming online publication at 12.95 dollars per month with three hours of access. For additional usage, $2.5 was charged per hour; this was the first pricing model based on usage. It dropped the paywall because it was at 1000 subscribers after four months. The Wall Street Journal, on the other hand, came into this field after a year, and it sustains its paywall to date. It targeted the business elite of America whose subscriptions were mostly sponsored by companies. With little or no profit at times, the Journal is still operating on the same model, but it had a good run when the internet was new.
In 2011, the New York Times set up a new type of paywall. It was a metered subscription where people could read 20 articles without any subscription every month. Previously, it launched and wrapped up its subscription services as well. With able technologies for handling online payments and a wide variety of multimedia content, the New York Times revived the trend.
In the UK, the Independent was the pioneer to go for an online newspaper nationwide in March of 2016. Retrospectively speaking, the Independent had about tens of thousands of daily readers in the UK, and now, millions of views are recorded every day on its pages. It offers an introductory subscription of 3 pounds per month for the first three months. Then the subscription is upped to 8.99 pounds a month with an ad-free premium experience. Users also get ebooks and access to events free of any extra charges, which are quite an attractive feature.
The Times was reported to have crossed its print subscriptions by three quarters as it had more than 300,000 subscribers to its digital copy of the newspaper. This happened in August of 2019, almost ten years after it adopted the paywall concept. It charges £26 per month, and users enjoy online content with full access. Their introductory subscription charges are £1 for a week – an eight-week plan. Apart from these two, they are also offering a student package with a 50p fee for a week summing up to £26 a year. It even has a registered-access program that allows the users to have access to any two articles of their choice without any charges once a week. Estimates show that The Times might boost its revenues by £20 million with the new tax cuts, provided the fees for subscriptions are not changed.
The Telegraph disclosed its numbers at the end of 2019. Their digital edition’s subscribers stood at 420,000, which was far more than their print subscribers. Their print subscription comes at £11.50 a week, whereas subscribers can enjoy the digital copy at just £2 a week. An additional pound allows them to access the sports section as well, which is also very affordable.
The Financial Times has 800,000 online subscriptions, which are equal to about 70% of its entire reader pool. After it improved its international readership, now the international readers make up about 65% of its readers.
The Guardian has a different model and has opted to stay out of the paywall structure. It offers free content with ads, and if someone wants the ad-free experience, he can get it by paying 5.99 pounds a month. For a combined subscription to the print and online copy, the price is set at £21.99 a month. It stands out from the lot as it also accepts donations from users, and since March of 2016, it has engaged about a million users. Amazingly, the print circulation for The Guardian is the lowest, and it tops the list of the most read website having a sizeable weekly readership of 5.2 million.
Publications from around the world also follow replicated strategies for growth as online subscriptions are increasing. Bild from Germany, Aftonbladet from Sweden, and Le Monde from France have been seen following such growth models. However, it’s America, where the more than 5 million online subscriptions have been clocked by The Washington Post, The Wall Street Journal, and The New York Times altogether.
The lifestyles and interests are reflected by newspapers more than many other products. It is high time that media publishers understand this vital aspect and incorporate prices based on usage. This will give their readers a sense of freedom in their subscription, and they will not feel roiled up in a messy and unsatisfying subscription.
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