Rise of Subscriptions and the Fall of Advertising

So, you’ve got a business that is starting to reach saturation on the subscription product, but since everything has to grow forever, it needs to find new revenue sources. And thus, the pivot to advertising has begun.

Subscriptions or advertising. The pivot to paid is overall a healthy trend for many publishers, but subscriptions aren’t a savior. Ads still have a role, sometimes as the main plank of media business models. The success of Axios, Morning Brew and Dotdash prove that. And ads can work with subscriptions -- look at the success Bloomberg is having in t... See more

Advertising captures the same value from everyone and fails to unlock incremental value from the deepest layers of fans. Subscription + à la carte models better monetize superfans.

Stepping back, though we should probably ask where all these ad budgets are coming from, and, more importantly, where the growth for internet advertising will come from next. The obvious answer is television: print is mostly already gone, but ‘TV’ viewing is now finally unlocking, with US pay TV subscriptions now down by over a third 

Advertising spend is down, non-essential affiliate marketing is on life support, subscription strategies are nascent, and direct-to-consumer commerce is a rarity. Media is being forced to evolve, once more. And so are brands.

The pivot to paid is, in most ways, a positive development in the search for sustainable media models. That’s not to say ad-dependent media is dead, not by a long shot. But too often in the excitement around subs the attention goes to acquisition vs retention. And the latter is where the true health of a subscriptions business is gauged.