The great subscription rush is on. It seems like every day another traditional subscription-based business reports big numbers or there’s another big name making new subscription plays. Take, for example, Twitter. It has been the attention-getter in the crowd as the social media giant announced its acquisition of the Revue newsletter platform in January.
“Revue will accelerate our work to help people stay informed about their interests while giving all types of writers a way to monetize their audience,” Twitter product executives Kayvon Beykpour and Mike Park wrote in a statement. “Whether it’s through the one they built at a publication, their website, on Twitter, or elsewhere.”
Newsletters can be free or paid subscriptions, of which Revue takes a 5 percent cut. According to reports, the move comes as Twitter is also looking into adding more subscription services to its platform during the coming year — including things like paid profile customizations or subscription-based access to Twitter’s Tweetdeck app.
Twitter’s expansion into the subscription service realm comes as it looks for ways to hold on to its revenue gains. The firm just enjoyed its second $1 billion quarter in revenue ever and increasingly facing pressure as to whether it can keep it up, particularly with a new political administration.
And subscriptions, by all indications, are where the smart players will not only convert consumers but keep them tied in over the long term. The New York Times made headlines when it announced it has signed on 7 million subscribers in Q3 2020. And added almost 400,000 digital subscribers during the quarter. In Q4, the Times reported total revenue of $509.4 million. Of that total, $315.8 million, or about 62 percent, came from subscriptions; $139.3 million, or 27.3 percent, came from advertising revenue, and $54.3 million, or 10.7 percent, came from other revenue, including affiliate revenue from The Wirecutter, demonstrating how thoroughly digital subscription revenue has displaced advertising as the paper’s main revenue stream. And the time is betting that digital news has more growing up ahead of it — with goals to reach 10 million subscribers by 2025.
The New York Times competitor, the Washington Post, is also keyed in on building up its digital subscriber numbers — hiring an Instagram editor for the first time this year to reach potential readers via a previously unexplored channel, reports Digiday.
“What’s become apparent in the last year and a half is that Instagram is the fastest growing platform by far” for the Post, in terms of followers and engagement,” said Mark Smith, director of social and operations at The Washington Post.
And lest one assume the subscription boom is limited to the world of data and content access, Amazon’s subscription juggernauts’ sustained growth says otherwise. Amazon Prime has over a 98 percent renewal rate for members who are using the service for over two years and Amazon’s subscription revenue grew 30 percent to $25 billion in 2020. Some estimate Amazon’s Subscription segment could expand to a valuation of a trillion dollars by 2024.
Not every subscription works for consumers, as PYMNTS’ latest Subscription Conversion Tracker highlights. The number of Americans who subscribe to pay television continues to decline — replaced by subscription to streaming services. One recent survey revealed that cable and satellite TV is now in less than 66 percent of the nation’s homes, for example. Researchers said the number of households that receive any live TV service fell to 74 percent in 2020, down from 85 percent five years ago.
In subscription, not just any service will do, Recurly Senior Vice President Danielle Gotkis told PYMNTS, but the one that actually fills a need for consumers. And one that can continually meet those needs as the consumer’s context changes over time.
“Subscribers must gain value from their subscriptions in order to stay engaged and loyal. It’s also paramount to give subscribers the ability to pay with their preferred payment method, no matter where they are located. And if a subscriber hits a bump in the road due to finances or another issue, offering the ability to pause a subscription, instead of canceling it, can reduce churn.”
There are a lot of subscription consumers out there, 182 million according to PYMNTS data, 15 million of which have signed on since the pandemic began. Subscriptions that two-thirds of consumers say they play to stick with, even when the pandemic has passed. The opportunity is wide for those who have a value worth subscribing to — but the field is getting crowded, meaning the challenge going forward might not bein providing the service. But in standing out the crowded field.