The news: USA Today announced it will be shifting to a subscription model for many of its stories, the last major national news outlet to make the change. According to the publisher, exclusive investigations, visual explainers, some news analysis, and “immersive storytelling” will go behind the paywall, while the rest will remain free to read.

What this means: It’s a necessary survival move on USA Today’s part.

• Ad-supported news has become less and less viable over the years: Total newspaper ad spending has been in decline for years, and though digital newspaper ad spending has managed to grow, we predict it will barely scrape by with single-percentage growth over the next few years.
• With Chrome set to deprecate its third-party cookies by 2023, publishers’ digital ad revenues will likely suffer even more.
• But it’s not all bad for the publisher: USA Today’s subscription offering enters the market at a time when readers are willing to pay for news.

Key stat: While ad revenues drop, we forecast US digital newspaper subscription revenues will cross the $1 billion mark this year, hitting $1.12 billion. By 2024, we expect that to grow to $1.53 billion, split among 25.7 million total subscriptions.

What’s next?

• Subscriptions are just one of many revenue diversification strategies that USA Today’s parent company Gannett is employing. For example, the company has been investing heavily in its product review website “Reviewed” in recent months, hoping to tap into ecommerce dollars and affiliate revenues.
• That narrative holds true for publishers as a whole. Subscriptions ranked as the No. 1 most important revenue stream among news publishers worldwide, with 76% of respondents saying it was important, according to a December 2020 Reuters survey. Display ads (66%) and native ads (61%) were cited next, followed by alternative revenue sources like events (40%) and ecommerce (29%).
• Marketers will likely have seen this shift coming for years, but USA Today’s move marks the end of an era. Marketers will have to learn how to work with these new formats, some of which, like virtual events, are likely here to stay due to the pandemic.