The drop in revenue that some publishers saw last spring was somewhat inevitable, as waves of Covid-19 cases led to economic uncertainty around the world. But as we finish out 2020, publishers say they are feeling confident about 2021. There’s good reason for that optimism.
Subscription revenue for digital publishers grew strongly in the second half of 2020, and according to a new report by the Association of Online Publishers (AOP) and Deloitte, 33% of publishers now say they are planning to grow their businesses in the coming year. How do they plan to do it? The main driver seems to be subscription sales.
A gradual increase in subscription rates over the past 12 months has given many digital publishers reason to feel confident about 2021.
The drop in revenue that some digital publishers saw in early 2020 was not the result of people being less interested in online news. It wasn’t due to declining display advertising rates, either. Rather, the drop was entirely temporary and it wasn’t as steep as some had feared when the outbreak first began. As the Covid-19 pandemic heated up, people did immediately pull back on spending and digital subscriptions were among the first luxury items to cut. Local business advertisers pulled back on advertising spending, as well, leading to a drop in advertising revenue for some hyperlocal news publishers. However, those losses were largely recouped in the second half of 2020.
Facing an uphill battle to bring in shoppers during a pandemic, businesses have relied heavily on online advertising. Most digital publishers today say their advertising programs are stronger than they were before the pandemic. They feel confident about 2021, as advertising sales continue to rise.
Outside of advertising, digital publishers say they are seeing exceptional growth in subscription sales. According to Deloitte, subscription revenue grew strongest between April and June 2020. During that time, subscriptions rose 44%. Revenue from other categories, including sponsored content and online video, reduced or stayed stagnant compared to 2019. However, that will likely turn around in the coming months and publishers who are accustomed to generating revenue through sponsored content and native advertising say they are confident about 2021.
More than one-in-three consumers say they read more news online in 2020 than year’s prior, particularly when shelter-in-place orders first went into effect this past spring. However, Deloitte’s researchers found that 42% of consumers said they expect to continue reading more news online, even once lockdown orders are lifted, painting an optimistic picture of the year ahead.
Growing subscription sales should hopefully give digital publishers the cushion they need to withstand any future drops in advertising rates or other declines in ancillary revenue streams. Now is also the time when publishers are looking at how they can diversify their revenue, and we are seeing more publishers launching online directories and sponsored content programs. Additionally, a growing number of niche publishers are following in the lead of The New York Times, and other larger media outlets, and launching product review and recommendation websites as a way to generate more affiliate referral revenue.
As always, the one-size-fits-all approach doesn’t apply in the world of digital publishing. While publishers are largely optimistic and confident about 2021, there is still plenty of work to be done.
Ensuring the coming year is financially successful means putting in the work today. It means adding new revenue streams and strengthening existing subscription and membership programs, so they provide as much value to readers as possible.
To learn more about the top revenue strategies used by digital publishers today, read this article from Web Publisher PRO.