One of the consequences of the development of cloud services such as Amazon Web Services, Microsoft Azure and Google Cloud is that highly reliable, global, scaleable and affordable computing solutions are available to relatively small outfits. These developments make it very practical to provide new specialised services and solutions to existing players. Frederic Filloux has been one of the steadiest commentators on digital news developments since the launch of the iPhone. In his latest posts he maintains that it continues to be very difficult for newspapers to establish and grow substantial and sustainable subscription businesses. See Mapping the Brutal Subscription Battlefield.
Filloux’s thesis is that “Subscription is the model of the moment for news. But the field is taken over by large players who will spare no expenses to erect the most robust barriers to entry.” He cites the examples of Netflix, Spotify, Amazon Prime Video and the latest and powerful entrant in the news and magazine space: Apple News+. Filloux has a rather negative view of the potential for Apple News+, but I am not going to follow him there. I suspect that we need to give Apple at least year in which to establish the level of potential for its new service (the coverage of the service has not yet gotten to the UK or Europe). The point we need to focus on, is that newspaper and magazines have already shown that subscriptions do work, and to some extent the success of the Apple News+ service will be measured against the benchmarks of existing players. Will the Wall Street Journal, which is “in” the Apple service be seen to have stolen a march on the Washington Post that has stayed “out”? Comparisons will be drawn since the biggest (and the most upmarket) national newspapers have begun to establish a level of subscription revenues that strongly suggest that they will have an independent and substantial support from digital subscribers (the New York Times the Financial Times and Frankfurter Allgemeine Zeitung being some of the obvious examples).
Newspapers and magazines — partly because they are already in their print form subscription services — find it relatively possible to build a direct digital relationship with their core audience of readers. Most large newspapers and magazines have at least tried to build direct digital audiences, and some of them have had considerable success. The position is radically different from the movie or music businesses. In those media markets, no publisher or star has sufficient prominence or loyalty to build a direct-to-consumer digital solution. For this reason an innovator such as Netflix or Spotify found it possible (though extremely expensive) to stealthily build a massive aggregation of content that could be monetized, through advertising and/or then through subscriptions. The music publishers and the Hollywood studios really didn’t have an alternative digital solution that they could grow for themselves (although belated attempts were made by the studios with Hulu).
Should magazines be doing better with their digital subscriptions? Undoubtedly they should be, Filloux is right to suggest that they should be doing better, but the plain fact is that there are plenty of examples of digital subscriptions working for the publisher and for the audience. and some of the most encouraging developments now for digital media are coming from innovative new players who are bringing more tools to the party. There are brilliant companies developing solutions for video and podcasting — increasingly seen as part of the content portfolio by magazine brands. When it comes to building digital subscriptions commercial solutions can be plugged in from Paypal, Shopify or Stripe. Audiences can be attracted through Instagram, Twitter and other forms of social media. In the testing matter of launching a new title, magazines in recent years have been founded with Kickstarter and Patreon. All in all, it has never been easier to launch a digital magazine subscription service if the publisher has good content and good design to offer.
Perhaps the most questionable aspect of Filloux’s grim outlook for digital news is the suggestion that only one “news” subscription will be taken. While many media categories have a ‘winner takes all’ trajectory, it is unlikely that digital news, with or without magazines, will fall into this category. If it becomes easier and more tempting to take out subscriptions to digital services, the chances are that more will be taken out. Furthermore a digital subscriber to an opera/football/wine magazine, may be more concerned with the relative cost of opera tickets, football games or good bottles of wine, than with the absolute cost of Apple News+ or Netflix. My advice to the publisher of a good magazine on Opera is to keep the annual digital sub well below the level of ticket prices in the orchestra stalls (£117 and upwards), and for a quarterly subscription to the highest quality magazine on Fine Wine, it would be judicious to keep within spitting distance of a bottle or two of Chablis Grand Cru.
While some prognosticate that winner-takes-all economics mean that only one newspaper/magazine(s) service may be needed, I suspect that in a world of cloud-based services we may see a wealth of choice leading to highly selective and discretionary subscriptions from digitally savvy customers. Once they get the habit, digital subscribers, will enjoy picking and choosing and they may see their cloud services as more cirrus than cumulus