In what was expected to be a bleak year for publishers, just over half of UK publishers saw some revenue growth in Q1, the same proportion as Q4 2019, according to the Digital Publishers Revenue Index (DPRI) from the Association of Online Publishers (AOP) and Deloitte – mostly, it was because of diversification effort years in the making.
In short, the picture is gloomy, but not as gloomy as expected. Digital publishing revenues fell less than expected to £117.1m in Q1 2020, a 2.3% decline against Q1 2019, the report, based on a survey of 21 UK digital publishers comprising 15 B2C publishers and six B2B publishers, finds.
There are bright spots too: 29% of publishers citied rises in excess of 25% year-on-year, up from 24% that reported this level of growth in the previous quarter.
“Ten years ago, display advertising made up 58% of digital publisher revenue and subscriptions only 7%”, explained Richard Reeves, Managing Director of the AOP.
“Subscriptions now account for 22% of total revenue; with display advertising having shrunk to 42%. As income from display continues to decline, the shift towards subscriptions and other diverse revenue sources is only set to grow, accelerated in part by the pandemic.
Sadly, it affirms a picture of a media ecosystem in which advertising is vacating its role as the financial backbone of a healthy media. Display advertising formats were down 17.1% year-on-year, a decrease of £41.2m. Digital revenue overall fell by 4%.
On a 12-month rolling basis, subscriptions and miscellaneous revenues performed strongly, growing by 18.8% and 25.9% respectively, while online video revenue grew by 10.7% and sponsorship experienced a slight increase of 3.2%.
Noting the strong diversification of revenue streams over the past decade, Dan Ison, Lead Partner for Telecommunications, Media and Entertainment at Deloitte looked forward, adding: “To withstand pressures of the pandemic, this diversification should provide publishers with the flexibility to launch new methods for content creation and delivery, enabling them to reach new audiences and stay ahead of the competition.
“Purse strings may be tight, but sustained growth in subscriptions, up by 19% year-on-year, demonstrates that consumers are ready and willing to invest in quality content.”
Sourced from the AOP, Deloitte