Subscription brings ‘green shoots of growth’ to flat digital publishing market

Subscription brings ‘green shoots of growth’ to flat digital publishing market

Digital publisher revenues in the last quarter grew by 0.3%, an indication of “wider contraction” in adspend, with drops in display (-4.2%), video (-14.3%) and sponsorships (-25.9%).

However, these were offset by consistent growth in subscription revenues (11.7%) which have been “performing well” for more than a year, according to the latest Digital Publishers’ Revenue Index (DPRI) from the Association of Online Publishers (AOP) and Deloitte.

The DPRI found that found digital audio revenues, described as a “relatively minor revenue stream”, hit £3m in Q3 2023, a fourfold growth fourfold (500%).

‘Green shoots of growth’

Richard Reeves, managing director at the AOP, commented: “Subscription revenues now account for almost a third of total publisher revenues, and by current trends, it could hit this milestone within a couple of quarters.

“Decoupling revenues from the ups and downs of advertising spend can provide a greater degree of financial security, though this cannot be a solution for all properties.”

Total digital revenues were slightly down from Q3 2022 to Q3 2023 at £153m (-0.5%).

Andy Cowen, lead partner for telecommunications, media and entertainment at Deloitte, called this “green shoots of growth” within “a more subdued quarter for digital publishers”.

He added: “This is a sign of ongoing diversification of revenue across the publishing industry and demonstrates consumer appetite for content across various platforms.”

Multi-platform revenues grew 10.5% year-on-year for the quarter, while platform-specific revenues like mobile and desktop decreased by 30% and 16.7% respectively.

New products and services ‘a priority’

The “miscellaneous” category, including data monetisation, more than doubled between Q3 2022 and Q3 2023 to £8.9m.

All of those surveyed said new products and services were a future business priority for the next 12 months, increased cashflow by three-quarters of respondents, non-advertising revenue by two-thirds, cost reductions by half, and acquisitions by one-third.

Advertising revenue growth was the only one to diminish compared to Q2 2023 to Q3 2023 from 75% to 50%.

The AOP and Deloitte surveyed 13 UK digital publishers; nine B2C and four B2B, for this quarterly report.

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