Soccer, North America, Europe

At Large: However it fares, the Athletic will give a timely lesson in the value of paid content

With monthly subscription fees proliferating for consumers as the battle for digital revenues continues, the much-discussed UK launch of The Athletic could be worth following some way beyond news media.

by Eoin Connolly
At Large: However it fares, the Athletic will give a timely lesson in the value of paid content

What makes something worth paying for? And what makes it worth paying for over and over again?

The answers to those questions are the basis to, you know, pretty much every economic system in human history. But in the digital era, finding them has been a treacherous exercise. 

Right now, two chunks of the sports media are reassessing what they are worth to fans. Premium pay-TV’s attempts to rebalancing its way through the decline of the big bundle deal are well documented. At the same time, a shift from free, ad-supported media back to direct transactions is creating a new set of case studies. It may look like a numbers game, where a large, engaged and hungry fanbase will produce enough punters to cover your costs from their own pockets. In reality, there is a leap to be made in convincing people to pay any more than their attention. 

Last week, soccer video startup Otro – launched amid starry, clamorous intrigue in November 2018 – announced its switch from subscription platform to free digital content studio, having failed to properly explain what users would get for a small monthly fee. That won’t slow attempts to restore subscription-based media. Monday brought the Premier League-focused UK arrival of the Athletic, a digital sports title which recently hit 500,000 subscribers after three years active in North America. It is also selling something – sports journalism and commentary – that is available elsewhere for free, but its pitch to readers and the industry has been different.  

The Athletic has landed in the context of a news media business that, outside of some B2B sectors and specialist titles, has struggled to replace income from print advertising and the cover price. Those pressures have been brought to bear on job stability, pay, and creative ambition. Quality work has been abundant but so too has mandatory digital filler. Supporters of direct payment models are making their case louder and clearer all the time.

A lot of British sports journalists, then, have been most willing to hear the Athletic out. Around UK£10 million has been spent on its transatlantic transplant, with co-founder Adam Handsmann telling SportsPro that the “majority” of that had gone on the editorial operation. There is a scene in Citizen Kane where Orson Welles’ putative titan of publishing sees a framed photo of a rival newspaper’s staff and sets about poaching them all. The Athletic may not have pulled that off, but it has certainly tried.  

Writers and staff were courted at a Marriott hotel in central London with the promise of equity and comfortable salaries. “We’re paying folks well,” Handsmann said. “They deserve to be paid well.” They have also been sold a vision of a working life uncoupled from the demands of an always-on news cycle, with ample resources and a remit to cover stories on a local or granular level. That, in turn, is the vision they are selling on to fans who might pay for their work. Every new signing released a short essay on Monday that outlined their motivations for joining the Athletic; many gave some version of the story that took them into sportswriting in the first place. 

That’s a neat exercise in marketing and identity creation, but will not in itself convince readers to follow them. According to the 2019 edition of the Reuters Institute Digital News Report, the proportion of those paying for online news media has risen sharply in the past couple of years. Yet it remains just 13 per cent in the US, while the UK figure of seven per cent is fairly typical across Europe. 

The Athletic has targeted an initial 100,000 subscribers from its British offering, producing an annual turnover of UK£6 million at rates of around UK£60 per user per year. So there has also been a concentrated early burst of free trials and steep discounts, ensuring that in its first year that income will be a lot less. Being able to present a new product, rather than moving an existing one behind a paywall, is another rhetorical advantage. 

Nonetheless, building scale in digital subscriptions has generally required two things: patience and capital. Netflix won its lead in user numbers and original content investment through VC backing, while the US$12.99 bundle price announced this week for Disney+, Hulu and ESPN+ will no doubt be funded by a raid on Mickey’s savings. The Athletic, for its part, has raised US$89.5 million from the likes of Founders Fund, Bedrock Capital Partners, Y Combinator and Precursor Ventures. Speaking on the Football Media Podcast, meanwhile, UK managing director Ed Malyon referenced a ten-year plan for the project.  

However it fares – whether it fails, succeeds, or stimulates wider competition from new and established publications – The Athletic follows a pattern of expectations for paid services. One is of the paywall as a a barrier from advertising. Netflix, alongside its other features, is basically ad-free TV. The freemium model helped Spotify’s rise and the whole app market has subsisted on it for years. Users of Amazon’s Kindle e-reader can pay a small levy to block screens directing them to new releases in its bookstore. That approach is attractive to consumers, but only increases the pressure to get the maths right. 

Behavioural change is also acting in both directions. More and more of life is on lease – smartphones and headphones, entertainment and software – and analysts point to a future for the likes of Apple based on service provision rather than unit sales. Proponents of a low-waste ‘circular economy’ argue that consumer goods like household appliances should all be provided cyclically through long-term deals, rather than as one-off purchases. Rent the Runway, an American startup which hit a US$1 billion valuation in March, has fronted an emerging market for shared clothing.

People are growing used to paying monthly fees in more contexts but subscription fatigue is the season’s hot industry term for a reason. There is a material comparison between a small monthly outgoing and the price, say, of a pint or a cup of coffee. Yet a fiver can feel lighter at the bar than on a contract, and we don’t tend to commit to all of our frivolous buys on the first of the month.   

When it comes to it, people will pay for the things they value. Selling something once takes as much care as buying it once. You can do the sums from there.