The Global Media Weekly for executives and entrepreneurs

Why trust matters so much to news brands

For a decade, the Reuters Institute in Oxford, UK, has been compiling one of the most detailed surveys of how people around the world get their news. Though not only focused on the business side of news, this year’s Reuters Digital News Report offers some key insights into how consumer attitudes are affecting business models, and how trends indicate where news organizations are likely to find success. Here are some key takeaways for everyone in the business of news. 

The pool of paying readers isn’t getting any bigger

To start with one of the more alarming findings from the report, Reuters found that – in most of the countries it surveyed – the numbers of people paying for a news subscription appears to be plateauing: “Across a basket of 20 countries where payment is widespread, 17% paid for any online news – the same figure as last year.” 

There were rises in the number of people saying they pay for news in countries including Germany and Australia. But there were small falls in the US and Norway, the latter being the country with the highest number of respondents (41%) saying they were paying. 

The overall takeaway is that, while there is still room for growth, particularly in slightly slower moving markets, market maturity is likely not far over the horizon. 

Obviously, this isn’t good for the industry as a whole, and in particular for those news brands hoping ‘a rising tide would lift all boats’. The news subscriptions business has – in many markets – turned into a ‘winner takes most’ game, and while the New York Times and other similarly dominant brands may be happy with their position in a mature market, time is running out for anyone still trying to stake a claim. 

This all suggests a couple of things about the future. 

First and foremost, in a mature market, subscriber growth on core products is likely (for newspapers certainly) to come from winning subscribers from your rivals. That will require a change in acquisition tactics. Secondly, because pulling readers away from the newspaper of their choice is never going to be easy, add-ons, such as games or recipes, are likely to become increasingly important growth drivers. 

To zoom out for a second, I think it’s useful to look at these hints of an approaching upper limit to the news subscriber pool as the flipside of one of the report’s other findings: that many consumers are actively avoiding news all together. Some may see this as a huge number of people remaining completely uninformed. I doubt that is quite the case: news is no longer the only way of taking in what is happening around the world. But it does mean that many people simply don’t want to keep up with events in the ways that the media industry is built to deliver. That, I think, leads to an important truth in the digital age: no matter how much we try to reach those not currently consuming news, we’ll never be able to capture as large a proportion of the population as we did before the internet began offering so many more distractions. 

Second subscribers

While the above numbers suggest newspapers – “core news providers” – will soon be competing for a mostly fixed group of subscribers, the report does offer some more encouraging findings for other news-based media. 

It says: “In almost all of the listed countries, the majority of subscribers pay for one publication. But, in the United States and Australia, around half (56% and 51% respectively) now pay for two or more – often a national and local paper combination.”

Two countries do not necessarily represent a locked-in trend, but when one of them is the US you certainly pay attention, particularly when the rest of the data suggests there are some people who will pay for news, and some who simply won’t. 

The opportunity here looks to be mostly on offer for those offering something deeper, or publications focused on different geographies. 

For the first category, the report notes that – in the US – second subscriptions were often to brands such as The Atlantic or New Yorker, or to more partisan outlets such as The Blaze. In the latter category, along with local newspapers, the report notes that Australian second subscriptions were often to US outlets, presumably to get a more international view.  

This all looks like pretty good news for both categories – just because someone is paying for the biggest beast in town, doesn’t mean they might not pay up for a deeper or different view. At the very least, it suggests that the addressable market for many of these titles isn’t quite as close to maturity. 

But aiming to be the second subscription does raise some conundrums. For example, some news-focused magazines have embarked on digital strategies geared primarily at driving traffic, not just to attract advertising revenue but also because you do have to pull in readers in order to convert them. If you are just going after any old eyeballs, then your competitors are indeed newspapers, and there is an incentive – at least some of the time – to compete on the same ground of breaking news. But being the ‘second subscription’ means thinking really hard about being complementary, rather than competitive. It’s a shift in mindset, and a balancing act, that will involve a lot of thought. 

Start thinking about a recession

Back to the doom and gloom. Reuters has had to caveat its report with the fact that most of the research was done before the current cost of living crisis and the war in Ukraine. The latter may have provided an at least temporary bump in attention, but the former is clearly likely to apply downward pressure on paid subscriptions and, indeed on advertising, the effects of which might prove to be quite long-term. “Uncertainty remains about how far and fast the market can grow, especially in more troubled economic times.”

Looking at media subscriptions, including TV streaming services, Reuters found more people saying that they would increase the number of subscriptions rather than decrease, though this was not the case in Portugal, with 17% saying they would reduce subs (13% increasing), and even in the UK and the US it was roughly 50/50. 

And, as Reuters points out, this was all before consumer costs really ratcheted up. The report asks whether news might be more resilient than, say, Netflix, both because some may see it as a necessity rather than a luxury; and paying news consumers are older and richer.

These are all fair points, but I’ll throw in another leaning the other way: the economy is almost certainly going to get worse before it gets better. That will put further pressure on those news subscribers who are thinking of cutting back, and will inevitably have an impact on their willingness to pay. I think this is going to be key, particularly with a view to retaining readers who might face a tough time for the next few years, but who hopefully will have more capacity to pay in better economic conditions. 

Being trusted with user data

The report goes into some detail about falling trust in news providers more generally, but it also looks at how many people trust them with their email addresses: “Across countries we find that only around a quarter (28%) have registered for one or more news websites in the last year.”

There was a fair bit of variation, with 44% of those in Portugal having handed their contact details over in the last year, compared to below 20% in Germany, the UK and Japan.

The kicker, though, is that only 32% of those surveyed said they trusted news sites to use their data responsibly, just slightly less than the one-third who said they trusted retailers. Not a great statistic for an industry that is meant, at least to some extent, to be built on trust. 

The reason this is important is clear. Emails are, of course, super useful for marketing subscriptions, but having that data, and in particular having users logged in when on a site, particularly non-paying ones, is about to get all the more important as we head towards some sort of cookie-less future.  

Given everything else, getting consumers to trust news providers enough to hand over their data, therefore, remains a surprisingly big challenge. We have, for the most part, been thinking about it in a fairly straightforward ‘carrot and stick’ way – “give us your details and you can have a few extra articles to read for free”. Perhaps, however, more thought needs to go into the process of getting people to provide their data and login, both in terms of what’s on offer, and in how the trade-off is presented. 

At the very least, we need to think more carefully about how we make those reading news content feel comfortable handing over their details. As a first step towards a subscription – and it will soon be an imperative when it comes to effective advertising – it deserves more careful attention than most of us have been giving it. 

PDF: Reuters Institute Digital News Report 2022