The Subscribd dilemma: Premium news bundles a ways off

Late last month, the service, which offered customers the ability to read up to 50 stories per month from premium news publishers including The New York Times, The Financial Times and the Wall Street Journal for $35 per month or $300 per year, began advertising through a classified ad network run by Study Hall, a popular listserv among media freelancers: Users who used the code Study Hall could save 20% on an annual subscription if they paid by May 15.

There was one problem. Subscribd does not have business relationships with any of the publications listed in its bundle, so after receiving emails from the legal representatives from those publications, Study Hall terminated its ad deal, LastPass, the password sharing service that Subscribd had been using to share passwords, suspended Subscribd’s account, and Subscribd changed its website, replacing its homepage with a screen asking visitors to join a private beta. (Users who navigate to Subscribd’s website through the ads can still sign up and enter their credit cards).

Subscribd’s founder, Stafford Palmieri, insists Subscribd was testing the waters and weighing market interest. “What we were testing is whether anybody would buy something like that on an individual basis,” Palmieri said. 

Testing the waters or not, Subscribd was offering content it was not legally licensed to offer, and its strange debut speaks to some curious features of the subscription media landscape. Digital news and entertainment subscriptions continue to proliferate, but bundles, at least so far, have not kept up, and so unauthorized attempts at sharing, or reselling, subscriptions continue to evolve.

At the moment, the longed-for celestial jukebox — sometimes called a Spotify for news, or a Netflix for news — doesn’t exist. A bundle like Apple News+ might offer subscribers access to lots of publications, but it often restricts subscribers to the licensed publications’ current issues — accessing content a publisher produced even a few months ago is difficult, if not impossible.

Most bundles today are also missing at least some of the most popular news sources, which are busy pursuing ambitious subscriber targets they’ve set for themselves. The New York Times and Gannett, for example, each expect to reach a mark of 10 million subscribers in the next few years.

And until they hit those marks, each seems unlikely to join any venture whose success might get in the way of their goals. “I cannot imagine any of these publications, knowing their strategies, cooperating with this type of play,” said Richard Kreisman, the principal of Kreisman Information Consulting, a consultancy focused on publisher content licensing.

“Premium news publishers are all about building their own subscriber bases,” Kreisman added. “Most of them have pulled back from doing any kind of licensing at all, except to non-core markets.”

And once those publications hit those milestones, they could simply set new ones. Even though subscriptions have been part of their business models for a while, the most premium publishers can think on a large scale about their total addressable markets, said Neal Zuckerman, managing director and leader of the global media practice at Boston Consulting Group.  

“I think we still have a long way to go in seeing penetration,” Zuckerman said. 

And as those publishers continue to hunt for subscribers, they also have to keep their eyes peeled for bad actors looking to resell or repackage access to their content. Though they are difficult to scale, subscription reselling operations regularly burble up thanks to the proliferation of password-sharing services.

A site called First American News, for example, has blanketed eBay with offers of discounted access to sites including Bloomberg, The Economist and the Wall Street Journal — it sells five years of access to the Journal, which normally costs $39 per month, for just $54.

“It’s not uncommon,” a source at one of the publications offered in Subscribd’s bundle said of reselling efforts.