It’s starting to feel like the bad old days for the news industry. Inflation is rising, the cost of living is biting and the stock market has taken a hit. It could be 2008 all over again, but at least one major thing has changed since then.
Flexible monthly subscription services have become normalised for consumers, allowing publishers to diversify away from the pure advertising-anchored revenue model the industry has relied on for decades.
British national and national publisher Reach (formerly known as Trinity Mirror) provides a major case study to drive this point home. The London Stock Exchange listed business hit a 15-year high of 406p in September last year as the pandemic and UK government restrictions made the news even more important.
Russia’s invasion of Ukraine has had a similar effect, driving up readership across many news media outlets. Understandably, however, not many businesses want their brands appearing against the regularly upsetting and sometimes gory stories coming out of the conflict.
The result, to put it into Reach’s words, is that the level of “brand safe content” has reduced, negatively impacting advertising sales in the process. The company’s share price is now trading around 118p, down almost 71% when compared to 15-year high of last September.
The UK has always been a tough news market, with Reach’s Mirror titles competing with the likes of The Sun, Express, Telegraph, Times, The Independent and digital upstarts like Politico on a national level. Now the dire macroeconomic situation makes it even tougher.
But that hasn’t stopped Bloomberg from making the somewhat brave, somewhat ballsy decision to launch its own UK-focused venture, Bloomberg UK. The outlet has hired the BBC’s Emma Barnett, Philip Aldrick, formerly of the Times, Olivia Solon, ex-NBC News, and Alex Wickham, editor of Politico’s London Playbook newsletter, and Bloomberg UK’s content will include:
A standalone website
A weekly Bloomberg Quicktake video series
A podcast about the City of London
An event on the future of British business
The goal is to generate $100m (£81.9m) in annual revenues. When from, however, is unclear and the publication hasn’t publicly given a subscription acquisition target. M. Scott Havens, the chief executive of Bloomberg Media, did tell The New York Times that the target demographic will be in the “professional, affluent space,” stiffing Bloomberg’s competition with the FT in the UK and no doubt putting other outlets, including The Times, Telegraph, Spectator, The New Statesman and The Economist, on notice.
London has become a testing bed for the type of international expansion plans Bloomberg is now enacting. FN has previously reported on The New York Times’ and The Washington Post’s own manoeuvres in the UK capital city. They’re relative newbies in town, while Bloomberg has a well-established newsroom in London with hundreds of journalists to draw from and 2,700 across the globe.
Since Bloomberg relies on subscriptions and with the current macroeconomic environment back in focus, it’s natural to revisit an essential question for the future of the news media industry: why do people really pay for the news?
VU Amsterdam University’s Tim Groot Kormelink has inverted the question in a new study published in Journalism, asking ‘why people don’t pay for news?’. He took 68 participants and gave them a free three-week newspaper trial subscription, interviewing them in-depth afterwards.
The qualitative research identified four main reasons as to why people did not want to pay for digital news:
Price (by far the most cited reason not to pay for news)
Sufficient freely available news, creating a ‘free mentality’
Not wanting to commit oneself or fear of missing out (FOMO) on other publications
Delivery and technical issues, including registration and login difficulties
Groot Kormelink also highlighted the link between general attitudes toward paying for digital entertainment and paying for news, with younger consumers subscribing to Netflix, Spotify and other services and therefore being used to paying for media.
However, these respondents also raised concerns about so-called ‘subscription saturation’. “It wasn’t so much paying in itself that was emphasised here, but more so adding another monthly expense to the list,” Groot Kormelink explained.
There were some positives to come from the research, with respondents acknowledging that a lower price point could get them into the habit of paying for their news and some participants realised that the quality of the news was better than the news they consumed for free. “While this didn’t necessarily convince them (yet) to pay for a subscription, they did point to this quality as having added value,” Groot Kormelink said.
For its part, Bloomberg is used to offering discounted monthly subscriptions to attract consumers through its digital front door and Bloomberg UK will be free to access until 18 May. They will hope, much like Groot Kormelink’s participants, that the quality of the content convinces readers to stay. Another advantage is that high-quality business news often isn’t free – Bloomberg’s peers and competitors, including the FT and Wall Street Journal, all have paywalls.
However, political news and general current affairs content, to a lesser extent, is often free. Wickham’s current gig at Politico’s London Playbook is a good example of this. Then there is the FOMO consideration. As long as Bloomberg maintains its competitive entry offers – a current one sees consumers only initially paying £0.50 ($0.61) per month – the aforementioned “professional, affluent” target reader is more likely to add Bloomberg UK to his or her’s stack of subscriptions and feel that they don’t have to cut back elsewhere.
With everything in consideration, it looks like Bloomberg has a good answer to each of Groot Kormelink’s four main challenges of getting people to pay for news. But either way, it still ain’t going to be easy. Many outlets have tried to take on the incumbent giants of the British press, and many have spectacularly failed, wasting fortunes whilst doing so.
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