In the latest twist in the war between big tech and traditional media, social media platforms are now going after subscriptions, threatening the revenues that traditional media have spent the past decade so carefully aggregating.
To add insult to injury, it comes off the back of a four-year bragathon from tech about how much it’s helped media transition to “reader revenues” and away from its historic reliance on the advertising that big tech now dominates.
In more bad news for traditional media, US data this week shows younger audiences (you know, the future) are increasingly pushing their subscription dollars to independent and start-up media. Both millennials and gen Z are twice as willing to pay for news from independent creators than they are from traditional print and digital outlets.
Subscriptions were supposed to save old media. Fairfax led the pivot with the launch of its paywall in 2012. Now, the publishing arms of both News Corp and Nine are dependent on the money their readers give them to make up for the continuing advertising slide.
Nine’s latest mid-year report shows that, for the first time, subscriptions, licencing fees and retail sales of the print product make up more than half of the revenues of its mastheads. (“Licensing” here is mainly the news media bargaining code payments from Meta and Google.) Nine also felt confident enough to begin reporting its mastheads’ “active subscriber” numbers — about 450,000.
News Corp’s end-of-year figures suggest its successful subscriptions push has started to flatline, with the total numbers for its mastheads — The Australian and the city tabloids — at 924,000, down from the previous quarter.
Have we reached subscription fatigue? Is the market saturated, particularly in the aging demographic that both News Corp and Facebook are chasing? Will Meta’s subscriptions come at the expense of media subscriptions?
Australia (with New Zealand) will be the first to find out with Meta’s “stealthy” Sunday announcement just a couple of weeks ago that it was launching a local trial of a Meta Verified subscription priced at either $240 or $300 a year (less on the web, more through the app stores).
Under the Meta offering, the payment gets you a verification badge on either Facebook or Instagram, and access to a live person to handle any issues you may have. Useful. But $240? Looks like Meta is trying to kill two birds with one stone: turn otherwise costly complaints into a way to make money (the cost-centre to profit-centre play) while testing the appetite for a broader subscription pivot.
It follows on from Twitter’s largely failed attempt to use blue-tick verification to better monetise its Twitter Blue membership. Latest figures show the result is just 300,000 paying subscribers. Twitter has responded with feature-creep — such as promised prioritisation in users’ news feeds or comment rights — to make it more attractive. Expect similar from Meta if its product stalls.
Back when it was under attack after the Cambridge Analytica data scandal, Meta (and Google) went big on support for news. In 2019, Meta promised to spend about $500 million, much of it through subscription accelerators (Crikey participated in the Australian accelerator).
Now it seems to be turning its lessons back into its own offerings.
Meanwhile, the platforms are pushing back against legislated demands that they better support traditional media — particularly in their North American home. In the United States, after most bills lapsed last year, tech regulation advocate-in-chief Senator Amy Klobuchar acknowledged in January that bills with “strong, bipartisan support” could fall apart “within 24 hours” once the tech lobby intervenes.
In Canada, Google is apparently experimenting with ways to block searches for news to avoid similar legislation. Seems a reprise of the tech threats in Australia’s debate over our own code.
Australia’s licensing fees, too, could be under threat. Last year, Meta told US publishers it was ending its News Tab experiment and would not be renewing the agreements it reached in 2019 to pay US publishers (including News Corp’s US mastheads) for news content in the tab.
It’s these licensing fees that have made Australia’s major publishers profitable over the past couple of years. It was supposed to have settled the media-tech war. Now, it’s sparking up on two fronts, leaving the publishers at risk of losing the fees while watching the subscribers they rely on leach over to the big platforms.
