Digital subscriptions raised via platforms To what extent they empower news companies and their revenue?
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1 Digital subscriptions raised via platforms To what extent they empower news companies and their revenue?
2 Dr Merja Myllylahti AUT January 24, 2019 Gothenburg, Sweden
3 Critical platform dependency Author Matthew Hindman: Digital newspapers depend critically on the industrial plants of Google, Facebook, or Apple in order to attract an audience. Facebook s and Apple s subscription services are particularly damaging to the autonomy of news outlets because they only work within their platforms, making monetising outside problematic.
4 Multiple researchers have warned about platform power (Bell & Owen, 2017; Pickard, 2017; Nielsen & Ganter, 2018). Dependency on traffic and audience attention News companies dangerously dependent on platform attention & traffic (Cornia et al., 2018; Myllylahti, 2018). ACCC s digital platform inquiry ruled that Facebook and Google have too much market power.
5 Money from attention? My study Attention economy trap? of 4 news companies revenue from Facebook traffic and social shares shows that revenue from both was under 1% of the news companies total revenue Study did not include potential revenue from subscriptions
6 Still, news companies continue to invest in social media distribution Cornia et al. (2018) found that despite platform risks news companies continue to invest in social media distribution, especially on Facebook. Companies believe that platforms are generating a short-term return on their investment. What about long-term benefits?
7 While facing regulatory pressures, platforms launch new subscription services for newspapers. Apple to relaunch Texture next Spring.
8 To which extent platform subscriptions increase/decrease news companies platform dependency. Aim of the paper to explore To scope different platform subscription models and revenues their may offer. To explore benefits and pitfalls of platform subscriptions.
9 What was researched? Subscription services offered by platforms Platform subscription services of Apple, Amazon, Facebook and Google Statements made by companies including The Baltimore Sun, Bild, FT, Gazeta Wyborcza, McClatchy, The Economist Benefits of platform subscriptions Pitfalls of platform subscriptions
10 Google Facebook Publishers involved Model Revenue share for publishers The NYT, Le Figaro, Fairfax Media, McClatchy, Les Echos, FT, Gatehouse Media, Grupo Globo, The Telegraph, The Washington Post, USA TODAY Bild, The Boston Globe, The Economist, The Houston Chronicle, The San Francisco Chronicle, La Repubblica, Le Parisien, Spiegel, The Telegraph, Tronc, The Washington Post Subscribe with Google -users can pay digital subscription while on Google platform Facebook subscription/instant Articlesusers can subscribe directly to news services within Facebook platform 85-95% of revenue 100% of revenue & user data Apple In talks with The NYT, WSJ, The Washington Post Apple Texture/Apple News in development Not known - 30%? Amazon News Corp, The Washington Post, Chicago Tribune, The New Yorker Subscribe with Amazon publishers can sell digital subscriptions directly inside Amazon s site 70-85% of revenue
11 Company Benefits Problems The Baltimore Sun Facebook subscriptions increased conversion 50% Bild Financial Times Gazeta Wyborcza McClatchy The Economist Facebook drives more people in conversion tunnel Facebook biggest driver of new subscribers, 40% of all new subscribers from Facebook Google subscriptions simplifies subscription process Converting through Facebook is costeffective and scalable has halved acquisitions costs No substantial uplift through Facebook Instant Articles Lower conversions Boosted by paid campaigns acquisitions become costly
12 What do we know about the revenue? Not much. Facebook says that with its paywall, news publishers own the process, they own the relationship with their audience and can build their audience out from there. Facebook does not take a cut. k-is-committing-300-million-to-support-newswith-an-emphasis-on-local/
13 But we have an idea about the cost of acquisition To exemplify, in 2018 the NYT announced that its third quarter marketing expenses increased to $40.4 from $26.6 million in the same period in Increase in marketing expenses was largely due a spike in subscription acquisition and brand marketing costs.
14 To summarise potential pitfalls and benefits? In some cases platform subscriptions drive conversion contested In some cases platform acquisition lowers costs contested Google subscriptions simplify subscription process Facebook drives new subscriptions contested Revenue from platform subscriptions and services - unknown
15 Digital news project 2019 Nic Newman s survey of 200 editors, CEOs, and digital leaders: Publishers are looking to diversify away from Facebook and towards other platforms this year. Google remains the key priority for most, with more than eight in ten (87%) saying it will be very or extremely important, but publishers are also looking again at YouTube, Instagram and Twitter as they look to reach new audiences. Apple News (43%) is considered as important as Facebook, with some publishers reporting sharp increases in traffic.
16 Becoming even more dependent? Newspaper executive about platform subscriptions: I d be careful if I were a newspaper because I d really want to have a feel for how much revenue I might be giving up.
17 How and what to research next? Two separate issues: News companies own subscription acquisitions via social media and from aggregation services Specific platform services offered by Google, Facebook, Apple and Amazon Concrete empirical evidence needed about benefits and pitfalls Suitable theoretical/conceptual frameworks?
18 Myllylahti, M. (2018). An attention economy trap? An empirical investigation into four news companies Facebook traffic and social media revenue. Journal of Media Business Studies.
19 Myllylahti, M. (2018). Paywalls and payment systems. Oxford Research Encyclopedia of Communication. Oxford University Press. on/view/ /acrefore/ /acrefore e-855
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