Does the rise of the subscription media model signal the end of ad-supported journalism?
But big-name news outlets like Bloomberg are finding subscriptions offer a more stable revenue source than advertising, said Bloomberg Chief Digital Officer Julia Beizer.
“We owe it to the sustainability of our businesses to come up with multiple revenue streams,” she said. Advertising is one line of revenue. “But being on the more premium end, subscriptions is a more durable business for us at Bloomberg Media.”
Since Bloomberg introduced a paywall three and a half years ago, the company has seen its subscriber base grow to about 370,000 – almost 100,000 of whom signed up in 2021 alone, Beizer said.
That was good enough to grow the publisher’s subscription revenue by 58% in 2021 compared to 2020. Revenue from subscriptions is now a nine-figure business for Bloomberg, according to Beizer.
The subscription model also dovetails with priorities driven by the focus on journalism, Beizer said.
“The subscriptions business is about connecting with your consumers and knowing who you serve, and that is easy to wrap your head around, no matter where you sit in the organization,” she said.
In other words, the people businesses know best are subscribers or loyalty members. Marketers will trust that a news company understands its subscribers and can reach them with the right messages.
Bloomberg uses a metered paywall model, so users get to read a few free articles per month before being forced to sign up for a subscription.
About two years ago, Bloomberg introduced dynamic tech that adjusts the paywall parameters, like how many free articles a user can read per month, according to an individual user’s behavior. It uses a first-party cookie to track on-site behavior against 20 different behavioral attributes, then groups users into lookalike audiences and adjusts the paywall experience accordingly.
“The wall changes for each user based on how long we think that specific user may want to sample content before ultimately converting,” Beizer said.
Bloomberg does not wall off content on a content-type basis. It currently doesn’t fully paywall any of its video-on-demand content and is unlikely to do so moving forward, Beizer said. Bloomberg also operates free newsletters and free news streaming services on social media platforms. All of the free content is key to Bloomberg’s strategy of growing its subscription prospecting pool while preserving a tempting-enough offer on the other side of the paywall.
Pandemic-driven subscription growth
Recent years have been a boom period for news subscription businesses. Donald Trump’s presidency, the 2020 election and the COVID-19 pandemic sent subscription numbers soaring.
And according to Zuora’s latest Subscription Economy Index (SEI), subscription-based media businesses that participated in the report saw revenue grow 11.7% on average in 2021. That narrowly outpaced the subscription-based media sector’s four-year compound annual growth rate (CAGR) of 10.9%.
“People went and found premium news in a time when they really needed it, and they’re sticking with it,” Beizer said.
It remains to be seen whether these trends will further play out in news publishers’ favor. And overall, the proportion of people who pay for news subscriptions is still low. In Reuters’ 2021 Digital News Report, only 21% of US-based respondents reported paying for a subscription to at least one news source. That either represents room for growth or a low ceiling, depending on your perspective.
But Bloomberg seems convinced that subscriptions are a good bet for long-term stability.
“When you start a subscription business, it’s not about short-term gains but about building a deep and sustainable relationship with your audience, and that takes time,” Beizer said. “This is a significant, yearslong investment that we’re committed to.”
Correction: This article has been updated to reflect that Bloomberg’s current subscriber count is about 370,000.