research report | Iris Chyi

From Analog Dollars to Digital Dimes: Newly Published Study Unveils Critical Insights into U.S. Newspapers’ Subscription Dynamics before and during Covid

FOR IMMEDIATE RELEASE

December 15, 2023 – A new study, “Unraveling US Newspapers’ Digital and Print Subscriptions in the Context of Price, 2016–2022,” has just been released, shedding light on short-term and long-term trends impacting the circulation of U.S. newspapers in both digital and print formats, particularly in relation to pricing—a factor often overlooked in discussions about newspaper demand.

This study systematically analyzed the circulation and pricing data of 18 prominent newspapers, focusing on periods preceding and during the pandemic. The findings underscore a dynamic landscape, highlighting notable shifts and critical insights into subscribership behavior.

Key findings from the study include:

Digital Circulation Surge and Subsequent Decline: Following the onset of the Covid-19 pandemic, digital circulation experienced a rapid surge, only to subsequently decline after reaching its peak in Q3 2021.
Print Circulation Decline Amidst Dramatic Price Hikes: The study revealed a continued decline in print circulation, significantly impacted by dramatic price hikes—an almost doubling of prices between 2016 and 2019.
Print Edition Resilience Despite Decline: Despite circulation declines, the print edition remains the core product, serving more subscribers who are willing to pay substantially higher prices compared to digital subscribers.

The study highlights a glaring price gap of 6 to 1 between print and digital subscriptions. Although the increase in digital subscriptions during the Covid-19 period seemed promising, it failed to generate revenue at par with the loss on the print side. Consequently, digital transformation means a substantial loss in total subscription revenue.

This study presents a sobering perspective on the intricate dynamics of newspaper subscriptions and urges a deeper exploration into the industry’s evolving challenges and opportunities.

The comprehensive findings, presented through 37 charts and 5 tables, are detailed in the article, which is publicly accessible. Download the full report here: https://www.cogitatiopress.com/mediaandcommunication/article/view/7482/3561

For further information, please contact lead author Iris Chyi, Professor of Journalism and Media at the University of Texas at Austin, at chyi@mail.utexas.edu

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research report — 2 Comments
26
Apr 21

The Impact of Covid-19 on 20 U.S. Newspapers’ Print and Digital Circulation

What happens When Digital Transformation Finally Works

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Executive summary

A persistent problem facing U.S. newspapers is users’ lukewarm response to their digital offerings. Has Covid-19 changed this? To answer this question, we analyzed 20 metro newspapers’ circulation data. Most reported substantial growth in digital subscriptions during the pandemic. Overall, the number of digital subscriptions went up by 64% between 2019 and Q3 2020.

We also analyzed pricing data. The price of print subscriptions has reached an all-time high—seven-day home delivery now costs nearly $1,000/year. It takes nearly six new digital subscriptions to make up for the revenue loss of one print subscriber.

Despite the growth of digital subscriptions, the quickened declines in print circulation (21%) and the gigantic print-digital price gap suggest a decrease in overall subscription revenue.

Has Covid-19 narrowed the print-digital gap?

Despite continuous declines in print circulation, most U.S. newspapers’ legacy product still outperforms the same newspaper’s digital offerings in terms of engagement, circulation, pricing, advertising, and subscription revenue—all by a wide margin. Our previous study based on 50 newspapers’ 2017 data estimated that digital accounted for about 3% of total subscription revenue.

But Covid-19 has created an unprecedented scenario where the need for instant, local news updates and the fear of physically contacting anything tangible may change consumer behavior. Economic stress could also drive print subscribers to cheaper alternatives—such as the same newspaper’s digital product.

In this report we examine the impact of Covid-19 on digital and print circulation. The extent to which the pandemic has narrowed the print-digital gap carries managerial implications.

Sample of 20 Metro Dailies

Drawing from a list of 50 publications in Pew’s 2016 State of the News Media Report, this analysis focused on 20 U.S. metro daily newspapers that filed digital nonreplica circulation data (e.g., web, mobile/smartphone, tablet, eReaders without advertising) and with no missing data preventing comparisons between 2019 and 2020.

Each newspaper’s weekday paid digital nonreplica and print circulation data were retrieved from the reports filed for the Alliance for Audited Media in 2019, Q1 2020, and Q3 2020. Digital pricing data were collected from these newspapers’ websites.

How has digital circulation changed during Covid-19?

Among the 20 newspapers under study, the majority (n=16) have seen a growth in digital circulation. Overall, these newspapers have gained 321,738 digital (nonreplica) subscribers since 2019—a 64% increase.

How has print circulation changed during Covid-19?

All the 20 newspapers reported a decrease in print circulation. Overall, these newspapers have lost 347,241 print subscribers since 2019—a 21% decrease.

How much does a digital/print subscription cost?

The median price for all digital access is $181 a year, with introductory digital offers as low as $.25 a week, while 7-day print subscription prices reached a whopping $1,052 (median) or $987 (mean) a year. The shocking price gap suggests that it takes nearly six new digital subscribers to make up for the loss of one print subscriber.

Digital Transformation and Revenue implications

During the pandemic, the circulation gap between print and digital has narrowed significantly, yet the print edition remains the core product, with a lot more subscribers paying so much more than digital subscribers.

Because of the gigantic price gap between print and digital editions, the impact of Covid-19 on total subscription revenue is negative.

This pandemic has made it clear that when digital transformation finally happens, the net result is unfortunately “exchanging analog dollars for digital dimes.” The industry must reassess its pricing, product, and revenue strategy. Otherwise, as John Garrett, publisher of Community Impact Newspaper, suggests, “This digital reader revenue push will leave news organizations with the worst left-at-the-altar story of all time.”

Related studies (available upon request)

Chyi, H. I. & Ng, Y. M. M. (2020). Still unwilling to pay: An empirical analysis of 50 U.S. newspapers’ digital subscription results. Digital Journalism, 8(4), 526-547.

Chyi, H. I. & Tenenboim, O. (2019). Charging more and wondering why readership declined? A longitudinal study of U.S. newspapers’ price hikes, 2008-2016. Journalism Studies, 20 (14), 2113-2129.

Chyi, H. I. & Tenenboim, O. (2017). Reality check: Multiplatform newspaper readership in the U.S., 2007-2015. Journalism Practice, 11(7), 798-819. Ellen A. Wartella Distinguished Research Award.

Chyi, H. I. (2017). Reality and irrationality: U.S. metropolitan newspapers between print and digital (pp. 12-22), in Print-online performance gap: A U.S.-only study raises debate. World Printers Forum Report, published by WAN-IFRA (World Association of News Publishers), Frankfurt, Germany.

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10
Mar 20

(Perhaps) the Final Verdict on U.S. Newspapers’ Paywall Experiment

I’m sharing the summary of our latest paywall study, Still Unwilling to Pay: An Empirical Analysis of 50 U.S. Newspapers’ Digital Subscription Results (published in Digital Journalism). We looked at 50 major U.S. newspapers’ circulation and pricing data and revealed that, even after the Trump Bump, digital subscriptions remained insignificant as a revenue source.

Executive Summary

While U.S. newspapers have been trying to reduce their reliance on advertising and increase reader revenue, research on consumers’ response to digital news products provides little support for such a strategy. As a reality check, this study examines 50 U.S. newspapers’ digital subscription results through analyzing their circulation and pricing data. Results revealed that they charged digital subscribers a fraction of the print subscription price, but digital subscribership remained small, contributing only 3% of total reader revenue.

Key findings:

Even after the “Trump Bump, these newspapers’ digital subscribership was, in most cases, underwhelming. On average, only 5,556 subscribers paid for these newspapers’ digital nonreplica (Web and app) edition, which was only 6% of their print circulation. Even with digital replica subscribers (5,696), total digital circulation was only 12% of print circulation. (Note that print circulation has been declining for decades.)

Table 1 presents each newspaper’s paid circulation and pricing data.

Digital nonreplica subscriptions were sold at 23% of the price for a print subscription. Deep discounts for new digital subscribers were common practice at 25 cents per week.

With a price so low and a subscribership so small, it is estimated that digital subscriptions generated only 3% of total subscription revenue.

Digital performance as weak as such indicates a consistent lack of paying intent, raising serious concerns about the viability of the subscription model as a revenue source for digital journalism.

To access the full article (free download by the end of May): Chyi, Hsiang Iris, and Yee Man Margaret Ng. 2020. “Still Unwilling to Pay: An Empirical Analysis of 50 U.S. Newspapers’ Digital Subscription Results.” Digital Journalism.

Questions: Contact Iris Chyi at chyi@mail.utexas.edu or on Twitter @irischyi

Professor & New Media Researcher at The University of Texas at Austin