4 numbers that jumped out in the latest Innovation Index report on digital subscriptions

In an effort to provide the industry with insights into emerging trends and new business models, the Local Media Innovation Index has been established. The Local Media Association has assembled a panel of 85 senior-level executives that are charged with growing digital revenue and/or audience at their local media company, who will take part in this effort.

The panel represents a diverse mix of large and medium-size local media companies including many of the top 25 in North America.

Our first report focused on the opportunity in audio and our second report looked at the future of digital marketing services.

Third topic: Digital Subscriptions & Consumer Revenue Models

The July survey focused on digital subscriptions for newspapers and consumer revenue models for broadcasters. Since the business models between broadcasters and newspapers are very unique, the survey was split and individual questions were asked for both of these groups.

Here are four statistics that jumped out to us in our latest Innovation Index report which included responses from more than 50 of the Index’s 80 members participated. The survey took place between July 16-31.

89

Of newspapers that took part in the survey, 89 percent of them said they are actively promoting and selling digital subscriptions. And for those who were not offering digital subscriptions, 69 percent of those plan on launch them in the next year.

5

When it comes to how many articles are metered, five was the magic number which made up 43 percent of the group. Others ranged from anywhere between 1 and 15 in terms of the number of stories that were metered.

32

There were a host of concerns raised around digital subscriptions. A few of them:

• 32 percent said: “I am concerned that many newspapers have cut their newsrooms too deep, and therefore don’t have ample unique content to support a subscription model.”

• 32 percent said: “I feel strongly that it costs a lot of money to produce quality journalism and that we should not hesitate to charge; giving it away for free is not good business.”

• 25 percent said: “I am concerned that only a small percent of the population will pay, making us more of a niche brand than a true local voice for the community.”

• 18 percent said: “They are great for national papers and large metro dailies; not sure if they are sustainable for smaller local newspapers.”

• 14 percent said: “I worry that digital subscriptions will be too expensive for lower income families to afford and we will only reach the more affluent consumers in our markets”.

• 7 percent said: “I do not believe this represents a sustainable business model for the newspaper industry, outside of a few exceptions.”

45

45 percent of broadcast companies said developing consumer revenue strategies was not relevant or too early to tell, if they will pay off for them. But 55 percent said it was moderately or very important to their businesses future success.

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