Could publishers be facing peak subscription?

peak subscription
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A column in the Atlantic magazine has stated that we have reached peak subscription. The author, Amanda Mull, highlights the overwhelming choice people face in consumer subscriptions and questions how satisfied they are with what they have signed up for. Could publishers focused on developing reader revenue come to face the same difficult consumer questions?

The subscription problem
  • Forced to undertake the arduous task of re-authorising her entertainment subscriptions on a new television, Atlantic staff writer Amanda Mull found herself asking ‘Why am I paying for these things?’. She believes millions of oversubscribed Americans are asking themselves the same questions, not just about entertainment services, but also for groceries, clothing and cleaning products.
  • She says the argument also holds for newspapers, magazines, newsletters and Patreon funded podcasts. And the problem for publishers is, no one knows how many subscriptions are too many subscriptions. She writes:

No one is sure how many subscriptions the average household will bear before it snaps and starts canceling things, but we might be about to find out.

Subscription saturation
  • The maturity of the subscription market varies by industry. Mull points to slowing growth rates for streaming services like Netflix in America as evidence that we may be approaching peak subscription, at least in some consumer segments. Dips in Viacom/CBS’s share price on announcing its Paramount Plus streaming strategy support that theory.
  • The subscription business model has grown steadily over the last decade as consumers became increasingly familiar with online payments and subscription tech became more available. According to Robbie Kellman Baxter, author of the Membership Economy and The Forever Transaction, good subscription businesses make customers more loyal and provide steady, predictable revenue.
  • The problems come when companies jump on the bandwagon with poor subscription strategies that offer no clear benefit for the customer. Baxter describes three big contributors growing dissatisfaction with the subscription model:
    • Guilt at unused subscription products or services
    • Frustration at prompts to subscribe for products or services you’d rather pay for as use
    • Companies making it difficult to cancel subscriptions.
Subscription shakeout
  • Mull describes the phase of the subscriber economy that we are in as a subscription shakeout. She writes that as markets become over-saturated with subscription services, more consumers will get bored of the concept and investors will eventually get tired of waiting for a return, leading to closures or acquisitions.
  • There’s no question that commodity news is a competitive subscription space. With international publishers like the New York Times, The Guardian and the FT chalking up millions of paying subscribers, scale is important.
  • However, specialist publishers might still have some way to go before they reach the subscription peak. Writing on Twitter, ex-Dow Jones and Digiday subscription exec Jack Marshall said:

I’d argue the market for unique and differentiated products might actually be larger than many publishers expect, provided they’re capable of producing them.

Of course the caveat there lies in publishers’ ability to produce content that will engage audiences enough to get them to sign up and then keep paying.

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