Subscriptions: So. What Do These Numbers Really Mean?

Matt Locke

1 year ago

When we were discussing this series at Storythings, I thought it would be nice to summarise my deeply nerdy interest in the cultural history of metrics into a neat little series. But almost as soon as I started writing it, I realised that it wasn’t really a guide or toolkit, but an epitaph. The metrics we’ve been exploring over this series – views, likes, shares and followers – are inextricably linked with an era that was dominated by the major web 2.0 platforms – Twitter, Instagram, Facebook and YouTube. Although these platforms (with the addition of TikTok) still overwhelmingly dominate social media usage, it feels like their era of cultural dominance is waning. This means digital publishers will need to develop a new playbook, with a new set of metrics. But what will these look like?

Why should I care?

In the last few months, there have been a couple of events that seem to mark the end of the web 2.0 era. As social platforms dominated our experience of the web, digital first publishers like Vice and Buzzfeed took advantage of social traffic from these platforms to capture audiences and drive eye-watering valuations. But in the last few months, Vice filed for Chapter 11, Buzzfeed News was shuttered, and Vox Media laid off 7% of their staff. With perfect timing, Ben Smith, the Founding Editor of Buzzfeed News, published his book Traffic, a riveting account of how these companies seemed to promise a new business model for digital journalism, but were ultimately destroyed by the same platforms they relied on.

What’s the big picture?

The era that Ben Smith covers in Traffic was defined by the idea that online publications could grow by exploiting the algorithms of third-party social media platforms to send them the views, likes and shares, and use this to drive income from programmatic advertising. Jonah Perretti, founder of HuffPo and Buzzfeed, used his understanding of how viral culture works to create content that was optimised for social engagement.

Whereas traditional media brands focused on driving users to their own website and paywalls, Peretti embraced a distributed platform model for Buzzfeed, building audiences as much on the social platforms themselves as their own websites. The problem with this strategy is that it made these publications ever more reliant on the capricious algorithms and product development strategies of the major social platforms. Many publishers ended up wasting millions shifting strategies to meet the platforms’ needs, most notoriously with Facebook’s ‘pivot to video’ in 2016, when they encouraged publishers and advertisers to move from text articles to video. The move was a disaster, leading to newsroom lay-offs and Facebook paying damages to advertisers after admitting to juicing their video metrics.

So what does this all mean?

If we are at the end of the Traffic era, then what kinds of metrics should we be using to understand our audiences? There are a couple of interesting trends emerging that share one thing in common – a focus on measurable transactions and value for your audiences, rather than the huge, but not always valuable, social media metrics. If the Traffic era was about going for the biggest reach and engagement possible, then the post-Traffic era is about smaller, but more valuable, relationships.

One of the biggest trends of the last few years has been the rise in direct subscription models, whether on major news sites like the New York Times, VOD platforms, newsletters platforms like Substack or fan platforms like Patreon, Twitch or Bandcamp. The key metrics for subscription models are Acquisition (what content or value proposition gets users to sign up and pay for your content), Retention (the percentage of subscribers who keep paying when their subscription renews) and Churn (the percentage of subscribers who don’t renew). Traditional reach metrics are still valuable for ‘top of funnel’ growth of your subscriber base, but the core business model lies in understanding what it is that will convert users to paid subscribers, and what will get them to stick around.

Tell me something I don’t know

Not everyone believes we’re at the end of the Traffic era. Just a few days after the publication of Ben Smith’s book, a new digital news site called The Messenger launched, with a playbook that looks very similar to the 2010s strategies of Buzzfeed and Vice. With $50m funding from media entrepreneur Jimmy Finklestein, the publication hired 150 journalists and aimed to reach 100m monthly uniques within its first year, a wildly ambitious target that would put it up with the New York Times (NYT) as one of the biggest online publications.

The launch hasn’t gone to plan so far, with journalists and editors leaving in protest at the ‘traffic at all costs’ growth strategy. At the heart of this strategy is Neetzan Zimmerman, a player from the Traffic era of viral growth, whose site The Daily What? was acquired by Ben Huh’s I Can Has Cheezburger site. Zimmerman seems to believe that the same playbook can work today, a viewpoint not shared by Ben Smith, who also launched a newsletter and subscription-based project called Semafor in late 2022. As Smith puts it in his newsletter covering Zimmerman and The Messenger – “Welcome to Semafor Media, where newsletter signups are the new traffic”. Amen to that.

Give me some numbers

A good example of using content in a subscription strategy is the NYT’s acquisition of the viral hit Wordle – they estimate this drove tens of millions of new users to the NYT, many converting to a subscription to play their other word games.

At least five Substacks bring in over $1m a year in subscription revenue, with the most – Letters From An American – earning over $5m. However, like all platforms, Substack income shows a Pareto Distribution, so the drop off between these high earners and the vast majority of Substack publishers will be very steep indeed.

Ok, I want to know more

I’ve mentioned it a few times already, but you should read Ben Smith’s Traffic – it’s such a good account of the last decade or so, and the impact the social media platforms’ dominance had on digital publishing.

If you want to know more about newsletters and subscription strategies, we love Dan Oshinsky’s This Is Not A Newsletter, which is a newsletter-Google Doc hybrid full of brilliant insights and advice on growing your newsletter audience.

And a final shout-out to our friends at The Content Technologist – their guides and courses on how to use data in your content strategy are absolutely essential. They are the best source of clear-eyed, practical and just damn useful advice out there. If you want to start building a content metric model for the post-Traffic era, this week’s newsletter is a great place to start, with a call to widen your data sources from the usual ones you get from web stats and social platforms. Any post that includes a 4×4 matrix with ‘weird insights’ in one quadrant gets the seal of approval from the team at Storythings!