How Paid Access & Subscriptions Will Replace Publishers’ Advertising Revenues By 2022

How Paid Access & Subscriptions Will Replace Publishers’ Advertising Revenues By 2022
Advertising

A new survey predicts the growth of paywall, paid-memberships and subscriptions and how these strategies will replace advertising as the key revenue generator for digital media publishers

Piers Fawkes, PSFK
  • 27 november 2018

While the publishing market is expected to achieve over $45 billion in annual revenue in 2018, the sector continues to disrupted by a small number of technology players. We all know that companies like Facebook, Google and YouTube have changed the way we consume content and media owners have had to make radical shifts in their strategies for not only content form and distribution. What’s also important to understand is that media companies need to find new ways to generate revenue.

Compounding the challenges is the duopoly growing its control of the market. An estimate by Salesforce suggests that Facebook and Google will receive 75% of all advertising revenue in 2019—that’s up from 61% in 2017.

That doesn’t leave a lot of $ for the tens of thousands of publishers across the world. Through a survey with senior executives at digital publishers and content owners, researchers at Wallkit tried to understand how the market was reacting to the ongoing pressures. The research found that businesses in the sector expected a radical shift in the way it makes money: from ad-supported to paid-content.

Current Distribution Landscape
The three key mechanisms for distribution of content today are websites, newsletters and social media. The survey, which ran in September and October 2018, found that podcasts followed up these main content categories and video was a little further behind.

The survey by Wallkit researchers also showed that the majority of media executives (46%) believe that paid content will be a critical strategy for their business in the next 3 years.

Exploring The Paid-Content Trend
When asked to compare top revenue generators between 2018 and 2022, the researchers noted radical shifts in the media executives’ responses. Today, publishers expect to make revenue through advertising and branded (or sponsored) content, but tomorrow, sales opportunities are expected to radically shift to paid subscriptions. In addition, the executives surveyed expected a continued importance in the role of events as a business strategy.

The survey also showed a rise in expected share of revenues from subscriptions and paid memberships. Digital media executives said that 20% of sales came from this type of activity in 2018 but expected this to rise to 43% by 2022.

Content Control
While written content is the format that most media executives (95%) wanted to control through membership and subscription systems, they were also very interested in controlling multimedia formats like podcasts, video and PDFs.

It will be very interesting to see how the media market develops in the next few years. The challenge the sector could face is whether the audience is ready to pay for subscriptions from multiple publishers using subscription software suppliers like MemberfulPiano and Scroll.

An alternative is required. That’s why I have taken my knowledge from developing a membership system for PSFK and have been working with a startup team to develop Wallkit to provide a network approach that satisfies the media business and consumer’s appetite to pay for content.

If you’d like to understand the survey results more—or if you would like to discuss how a networked subscription system like Wallkit could help your media business—drop me or the team at Wallkit a line: pf@wallkit.net.

While the publishing market is expected to achieve over $45 billion in annual revenue in 2018, the sector continues to disrupted by a small number of technology players. We all know that companies like Facebook, Google and YouTube have changed the way we consume content and media owners have had to make radical shifts in their strategies for not only content form and distribution. What’s also important to understand is that media companies need to find new ways to generate revenue.

+advertising
+analysis
+Delivery & Logistics
+Features
+loyalty & membership
+op-ed
+paid access
+Public
+publishing
+retail
+Shopper Marketing & Promotion
+subscription

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