It’s no secret that the digital era has made it difficult for newspapers to stay profitable. Smaller publications have gone out of business and it took considerable outside investment for a giant like the Washington Post to keep its doors open. Newspapers have had to get creative - forging partnerships, expanding their offerings outside of traditional news - in order to maintain production.
With that said, the biggest step towards increased profitability has been newspapers investment in digital subscription models. Long-standing brands like the New York Times (NYT) and Canada’s Torstar have seen a significant increase in revenue due solely to subscriptions.
As of November of 2018, the NYT counted 3 million digital-only subscribers with its total number of subscribers sitting at 4 million. Operating profits rose to $41.4 million, a 30% increase from the previous year. That’s coming off a second-quarter profit of just over $24 million and subscription revenue of $99 million. During that period, NYT added 109,000 digital-only subscribers and another 203,000 the following quarter.
Torstar is a bit more new to the game. They’ve only recently launched digital subscriptions and have accrued about 10,000 subscribers over the first three months. Exclusive partnerships with the Wall Street Journal and the acquisition of Ottawa based digital subscription provider iPolitics is helping TorStar with its offerings. While Torstar did post a net loss for 2018, they hope to replicate the relative success of brands like the NYT. What’s helping to shape Torstar’s positive outlook is the fact they have $68 million in unrestricted cash with zero bank indebtedness, meaning they don’t owe the bank anything short term. That $68 million represents a 19% year-over-year increase.
You’ve probably noticed that many brands are now offering subscriptions. Don’t expect this trend to go away any time soon. Quite the opposite, as industries will look to increase subscription offerings as a way to drive revenue. Car subscriptions, food box subscriptions, clothing subscriptions will all continue to pile on top of some of the gym memberships and TV subscriptions you’re already using.
Managing these subscriptions will be key and that’s what Butter is here to accomplish.