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Digiday+ Research: Publishers likely to depend on subscriptions less as they explore alternative revenue streams in 2024

January 5, 2024
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Digiday+ Research: Publishers likely to depend on subscriptions less as they explore alternative revenue streams in 2024
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By Julia Tabisz  •  January 5, 2024  •  3 min read  •

Ivy Liu

It’s safe to say that publishers’ traditional ad revenue isn’t going anywhere — programmatic might not have lived completely up to expectations in 2023, but it remains a bright spot — but publishers are starting to place their bets on alternative revenue sources heading into the new year. Think everything from events to commerce and non-traditional platform partnerships.

When it comes to subscriptions though, the jury is still out.

In other words, it will be an interesting year for publishers’ subscriptions revenue, with more publishers making money from subscriptions but with this particular revenue source accounting for a smaller portion of revenues overall heading into 2024, according to Digiday+ Research surveys of 355 publisher professionals.

Digiday’s survey found that, overall, more publishers were making money from subscriptions heading into the new year. Nearly three-quarters of publisher pros (74%) said in the second half of 2023 that they got at least a very small portion of their revenue from subscriptions, compared with 62% in the first half of the year.

But, while more publishers said they made money from subscriptions last year, a closer look at the data reveals that more publishers were making only a little money from subscriptions, as opposed to a lot. Specifically, the percentage of publisher pros who told Digiday they made a very small or small portion of their revenue from subscriptions saw a big jump between the first half of last year and the second half: 29% of publisher pros said at the beginning of 2023 that subscriptions accounted for a very small or small portion of their revenue, compared with 44% in Q3.

Meanwhile, Digiday’s survey found that the percentage of publishers who said they make a lot of money from subscriptions has been trending downward. In the back half of 2022, 28% of publisher pros told Digiday that subscriptions accounted for a large or very large portion of their revenue. By the first half of 2023, that percentage fell to 21%, before falling even further to 11% in the second half of 2023. What’s more, not one respondent to Digiday’s Q3 2023 survey said they got a very large portion of their revenue from subscriptions.

Following the trend of publishers bringing in less money from subscriptions than they have in the past, Digiday’s survey also found that publishers’ focus on the subscriptions part of their business is showing signs of waning. The first sign is the number of publishers who said building their subscriptions business isn’t a focus at all for them heading into 2024.

One-third of publisher pros (33%) told Digiday in Q3 2023 that they weren’t focused at all on building subscriptions in the next six months. This percentage isn’t necessarily a big jump from the beginning of last year (when 27% said they wouldn’t focus at all on subscriptions). But that 33% is a significant chunk of respondents who said building their subscriptions business isn’t a focus heading into this new year.

Another major indicator is the fact that the percentage of publisher pros who said building their subscriptions business will be a large or very large focus has been steadily trending downward over the last two years. At the beginning of 2022, 44% of publisher pros told Digiday that building their subscriptions business in the next six months would be a large or very large focus for them. By Q3 of that year, that percentage fell just slightly to 43% before falling again to 39% in Q1 2023 and falling once again, albeit slightly, to 37% in Q3 of last year.

https://digiday.com/?p=530686

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