European publishers look to digital subscriptions to reduce platform dependency

Publishers are looking increasingly to reader-revenue models, not just to secure a sustainable business model but also to reduce their dependency on the duopoly, according to a report from Axel Springer. The report is the first of its kind from the publisher and was released to coincide with its first international paid-content summit last week.

The Guardian, Financial Times, Le Figaro, Schibsted, Axel Springer’s Bild and Business Insider, along with U.S. titles including The New York Times, were among the 33 publishers that participated in the survey, whose purpose was to discuss the future of subscriptions models.

Publishers are feeling more buoyant about the future of subscription models, with most respondents (70 percent) saying they have evidence that readers’ willingness to pay for content has increased in the past year, according to the report.

A flurry of publishers in Germany, France, Spain and Scandinavia, including Spiegel Online and Die Zeit, have recently launched new paid content models, said Stefan Betzold, managing director of Bild Digital.

“Unlike ad revenue, where the big platforms like Facebook and Google take such a large proportion, digital readership revenues and the relationships we can develop with readers provide another revenue stream that helps us reduce dependency on platforms,” Betzold said.

Betzold also acknowledged that Google and Facebook have made efforts to support publisher subscriptions. Last October, Google ended its first-click-free policy for subscription publishers’ content that required subscription-based publishers to let readers see at least three free articles in order to have the publishers’ content surfaced in search.

Facebook has also been testing subscription sales with publishers including Axel Springer, The Economist and The Washington Post through its platform. However, these tests are running just on Android devices and Betzold said Bild has seen little to no data on what impact the test has had.

“It took us two years of discussions with Facebook to get them to understand the future of news and journalism and what’s needed, and that resulted in these [subscription] trials,” Betzold said. “But we still need them to show more commitment to it, to bring product people together and help us work on it and analyze it together.”

He added that Facebook’s plans to purge its news feed of publishers and brand content do not directly address publisher attempts to monetize digital subscriptions via Facebook, though he said if news is dramatically reduced in the feed, promoting content that’s paid for on the platform will be harder.

Publishers surveyed in the report noted Google as the platform that’s made the most effort to work closely with them, whether via the Digital News Initiative or by ending first click free. In contrast, Amazon wasn’t rated as an important partner, while they deemed Apple News less important than Google and Facebook.

Source: Axel Springer

For Bild, Apple is the best performing when it comes to the platforms, not so much for Apple News but as a distribution platform for its own news apps, Betzold said. “Apple is an important partner for paid content distribution, despite it taking a revenue share, it’s an ecosystem that works well for us, much better than Google Play,” he said. “I’d put Apple ahead of Google and Facebook for driving subscriptions.”

Ensuring the continued health of paid content models depends on a number of factors, including optimization of user flow, investment in editorial content, a better understanding of data in the newsroom and churn prevention — all things the publishers surveyed in the report plan to invest in.

Source: Axel Springer

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